Gena Pty Ltd v The Proprietors-Units Plan No. 139

CATCHWORDS

REAL PROPERTY

- Subdivision into unlts and common property of

land held under Crown lease

- Application to Supreme Court

Australlan Capital Territory for order cancelling units plan

Cancellation part

of scheme to substitute

new unlts plan

embracing additional parcel

of land - Scheme opposed by some unit

holders - Court required to

have regard to rights and

interests

of those having estates or interests in leases

of units -

Provisional order made for cancellation

of units plan subject

certain conditions

- Extent of Court’s power to impose conditlons

- Meaning of “rights and interests“

of unit holders

- Whether

just and equitable to order cancellation

- Principles applicable.

Unlt Titles Ordinance	1970 (A.C.T.), ss.11, 25, 2 6 , 97, 98, 99
ACT G 34 of 1986

Sheppard, Xelly and Neaves	JJ.
20 February 1987
Canberra

IN THE FEDERAL COURT OF AUSTRALIA

)

AUSTRALIAN CAPITAL TERRITORY

)

)	No. ACT G 34 of 1986

REGISTRY	DISTRICT	)
)
GENERAL DIVISION	)

ON APPEAL FROM THE SUPREME COURT

OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN: GENA PTY. LIMITED

First Appellant

ARGOS PTY. LIMITED

Second Appellant

AND:	THE PROPRIETORS - UNITS PLAN N0.139

First Respondent

NICK KARVOUNARIS

Second Respondent

KOULA KARVOUNARIS

Third Respondent

STAN KOKOULIS

Fourth Respondent

IRENE KQKOULIS

Fifth Respondent

MINUTE OF ORDER

JUDGES MAKING ORDER :

Sheppard, Kelly and Neaves

JJ.

DATE OF ORDER	: 20 February 1986
WHERE MADE	: Canberra

THE COURT ORDERS THAT:

1. The appeal be dismissed.

2 .

The cross-appeal

of the

second, third, fourth and

fifth respondents be allowed.

3 . The order made by the Supreme Court of the

Australian Capltal Territory on

20 May 1986 be set

aside and in lieu thereof it be ordered that the

application to that Court be dlsmissed.

4. The appellants pay the second, third, fourth and

fifth respondents'

costs

the

appeal

and

cross-appeal.

5. The first respondent be at liberty to apply on 14

days' notice for such order

as to the costs

of the

appeal and the cross-appeal

as it may be advised.

All parties

be at liberty to apply on

14 days'

notice for such order

to the costs

of the

proceedings in the Supreme Court

of the Australian

Capital Terrltory

as they may be advised.

Note:

Settlement and entry of orders is dealt with in Order

of the Federal Court Rules.

. -

IN THE FEDERAL COURT OF AUSTRALIA	\
>

AUSTRALIAN

CAPITAL

TERRITORY

REGISTRY	DISTRICT	I	No. A.C.T. G34 of 1986
I

DIVISION

ON APPEAL F R O M THE SUPREME COURT OF THE

ausmALIm CAPITAL TERRITORY

GENA PTY LIMITD and ANOR.

Appellants

THE PROPRIETORS - UNITS PLAN NO. 139 and ORS.

Respondents

CORAM:	Sheppard, Kelly and Neaves	JJ.
DATE :	20 February 1987

REASONS FOR

JUDGMENT

SHEPPARD J.:

In this matter

I have had the advantaue of reading

the judgment

to be delivered by Neaves

I am thus saved the

necessity of setting out the relevant legislation and much of the

detail of the evidence.

The essential problem in the case is

that

the

second.

third,

fourth

and

fifth

respondents

("the

respondents"). who

are

the proprietors of the butcher's shop

carried on redevelopment unless the enlaraed supermarket to be carried

unit

7 ,

will

not

consent

to the

proposed

on in

the	new premises is prohibited from selling meat other than

packaged meat which has been packaqed off

the premises. In other

words they wish

preserve the existing position in order to

reduce the adverse effect on

their carried on a

business which they expect

would

result if the supermarket

conventional

butcher's business. It should be clear

t,hat the respondents are

not entitled to the benefit of any covenant

or agreement which

prevents the supermarket sellinu unpackaged meat or meat which

has been packaged on the premises. It is

only

because the

supermarket

has not presently the room to cut up meat

on its

premises that the respondents enjoy their advantage.

the

learned primary Judqe's

view, justice and equity required the

imposition of condition

3	which would operate to preserve the

status quo.

The submissions of

the parties thus centred upon condition

3 .

In the primary submission

counsel for the appellants it was

not within power and should be excised from

his Honour's order

leaving the balance of his order in force. In the submission of counsel for the respondents it was not within power, but the consequence of that conclusion was not that contended for by

counsel for the appellants. Rather it was that the inability of

the Court to impose the condition turned the order into one which

was not just and equitable with the result that the application

should have been dismissed. These submissions raise f o r

consideration the question of the true construction of S. 97 of

the Unit Titles Ordinance 1970. particularly sub-secs. ( 4 ) and

( 5 ) thereof.

I am clearly of opinion that the arondition was not authorized

by suh-sec.

97(5) of the Ordinance. Relevantlv

the sub-section

provides that the Court shall

make

provisional order (rather

than a final order) for the cancellation of the units plan

if it

considers

that it is

necessary

impose

conditions

complied

with

before

the

making

final

order

for

the

cancellation of the plan for the purpose

of adjusting, as between

all persons having registered estates

or interests in the leases

of the

units, the respective rights and duties of those persons

so far as they may be affected by the cancellation of the plan.

The respondents presently have no right to restrain the carrying

on of

a conventional butcher's shop in the supermarket.

As I

have said. the advantage they have is due solely to the fact that

t.he supermarket is not large enough to enable the operator to cut

up and packase meat on the premises

as they now

exist. If the

proprietor were able to overcome this problem, there would be no

legal reason why it could not carry on a conventional butcher's

shop in the supermarket premises. Sub-section 97(5) empowers

only the imposition of conditions for the purposes of adjusting

the respective rights and duties

persons having registered

estates

interests in the leases of the units. Since the

respondents have no

right

to prevent the carrying

on of

butcher's shop in the supermarket premises and the supermarket

has no duty to the respondents not to do

so. condition 3 cannot

be a condition adjusting the respective rights and interests of

the lessee of the supermarket and the respondents

so far as they

may be affected by the cancellation of the plan.

If it is valid.

its

validity

must

derive

from

other

provisions

the

legislation.

The only other possible source

of power pursuant

to which

condition 3 could

have

been

imposed

sub-sec.

9 7 ( 4 ) .

fundamental question

is whet,her the words of

sub-sec.

9714)

authorize the imposition of any conditions.

The sub-section does

not expressly provide for this

to be done; sub-sec.

9 7 ( 5 ) .

on the

other hand, does authorize the imposition of conditions provided

they are conditions of the kind contemplated by that sub-section.

there

power

conferred

sub-sec.

9 7 ( 4 )

impose

conditions. it must stem from implications to be drawn from the

words of

the sub-section.

The critical words are contained in

the

successive

phrases.

"having

regard

the

rights

and

interests of

all persons havinu estates or interests ... in the

leases of the units" and "it

is just and equitable to do so".

ao to the first of these phrases.

The "interests" where it firstly appears in the sub-section.

essential question concerns the meaning of the word

It is

secondly used as

part of the expression.

"all

persons having

estates or interests . . . ' I .

In the context of thit expression it

is plainly used in the sense

a legal or

equitable interest

capable of enforcement in a court. It was submitted by counsel

for the appellants that it had the same meaning when used as part

of the expression, "having regard to the rights and interests of

all persons ... ' I.

In his submission its use in conjunction with

the word

"rights", coupled with the consideration that

it was

unlikelv to have been used in a sense different from that in

which it is used where it secondlv appears in the sub-section,

led to the conclusion that this was its meaninu.

The contrary view

is that the word "interests",

where firstly

used. should be given a far wider and less precise meaninq. In

the context in which

appears it should be construed to

encompass, not only legal and equitable interests. but also such

interests as

derive from the legitimate business or commercial

concerns

of a unit

holder

likely

affected

the

cancellation of a units plan.

Havinq

reflected

the

matter,

I have

reached

the

conclusion that the word is used in the same sense each time it

appears and thus has the restricted meaning contended for by

counsel for the appellants. In other words, the section is not

dealing with interests which are not legal

equitable in

character. My conclusion

in this regard stems from a number of

considerations.

Firstly, a word in a section should

not, prima

facie. be given a different meaning from that which it plainly has when used in another place in the section. That rule of

construction

may

displaced

the

context

or by

other

considerations which indicate that the leqislatore intended a

different meaning. But the rule is

a starting point.

Then the

word

"interests".

where

firstlv

appears.

used

conjunction with the word "rights".

word which clearly refers

to legal

or equitable rights capable of enforcement by

a court.

Next the section is designed

enable changes in legal and

equitable estates and interests to be brought about provided its

procedures are followed and the instant case is

an appropriate

one.

That

is the subject matter with which the section is

dealing.

not

a general

provision

dealing

with

the

clrcumstances in which changes in the user of land or buildinqs

may be authorized

or permitted; cf. City Area Leases Ordinance

1936. S. 11A. Finally.

the construction which crives to the word

the

restricted

meanins

contended

for

counsel

for the

appellants gives the section, in

opinion, a more cohesive

operation because such a construction

fits well with the words of

sub-sec.

9 7 ( 5 ) .

For all these reasons I am of opinion that the interests to which the Court may

have regard in determinim whether it is just

and equitable to make an

order for the cancellation of a units

plan

are

lesal or equitable

ones

and

others.

The

only

difference between them and those provided for in sub-sec. 9 7 ( 5 )

is that those dealt with in that provision must be registered;

there such no is requirement sub-sec. in 9 7 i 4 ) . The

advantageous position which the respondents have because of the

inability of the supermarket to carry on a conventional butcher's

business

is not, therefore. an interest within the meaning

sub-sec. 9 7 ( 4 )

any more than it is

a right within the meaning

either of that sub-section or of sub-sec. 9 7 ( 5 ) .

It follows that

the words. "havinq regard to the rights and interests

all

persons having estates or interests

...

in the leases of the

units". cannot be a source	of	power for the imposition of
condition 3 .

I turn to the second of the phrases in question

which is

really the gist of the sub-section. In essence it is.

"The Court

shall not make an order

for the cancellation

of a units plan

unless it is satisfied that

. . .

it is just and equitable

so to

do".

A first question

is whether the Court.

m determining

whether it is just and equitable to make the order. may have regard only to the rights and interests of all persons having

estates

or interests in

the

leases or to the entirety of the

circumstances of the case

as well. In mv opinion the better view

is that circumstances of the case.

is bound to have regard to the entirety of the

The

Court

is required to bear the

rights and interests of all affected persons in mind in reaching

its conclusion; but otherwise it is required to take account of

the whole of the circumstances of the case which is before it.

My reason for that conclusion derives from the use of the phrase

" just and equitable". That is

expression of wide import

usually qiving to a court empowered to act in accordance with

such a mandate a very wide discretion to take account of all

matters and circumstances touching the matter before it and

giving such weight to each

it thinks appropriate. It is this

exercise upon which

must embark in order to determine whether

it is just and equitable	to	make the order which the statute has
empowered it to make.

I have now expressed

my view of the meaning

of the two

essential phrases in the sub-section. The critical question is

whether, by

implication.

the

Court

empowered

impose

conditions or whether its only power, subject

to the operation of

sub-sec. 9 7 ( 5 ) ,

is either to grant

or refuse to make the order

for cancellation. Really the question is whether the

Court, in

order to see that justice and equity are done. may impose

conditions in the absence of which its order would not be just

and equitable.

If there is a

power to impose conditions independent of that

conferred by sub-sec.

97(5). its exlstence can only derive from

the use of the words "just and equitable" and the wide meaning

and effect which those words should be given. But the section

must be read

as a whole. Particular account must be taken of the

express power to impose conditions of a particular kind conferred

by sub-sec.

9 7 1 5 ) .

Furthermore. sub-sec.

9 7 ( 3 )

indicates that

the

Court

may

take

one

three

courses.

may

make

provisional order

or a final order for the cancellation of the

plan.

it may dismiss the application.

The circumstances in

which it may make a provisional order are provided for expressly

in sub-sec. 97(5).

It is necessary that the order be provisional

because conditions will need to be complied with and the order ought not to become final until they have been. This is a

further pointer to the construction of sub-sec. 97(4).

The only

cases in which

it will be appropriate to make provisional orders

will be those in which the Court imposes conditions of the kind

contemplated

sub-sec.

97(5). If no

such

conditions

are

imposed.

the

section

does

not

contemplate

the

making

of a

provisional order. That in turn leads to the conclusion that the

leqislature did not intend the Court to have power

impose

conditions pursuant to sub-sec.

97(4).

It is accordingly

opinion that the Court did not have power to impose condition

pursuant either to sub-sec.

97(4) or sub-sec. 97(5).

During

the argument there were submissions concerning the

remaining conditions. Farticular reference was made by counsel €or the respondents to condition 4 which provides that the

appellant,

Arqos Fty Limited, at its

own

expense complete the

erection of the bulldinq on Block 25 and complete the alteration

of the building

on Block

as shown in plans

which were in

3 .

evidence. In

my opinion condition 4 is not a condition fallinu

withln sub-sec. 97(5) and was therefore also beyond power.

I do

not express any view on the validity of the remaining conditions. It may be that some or all of these were authorized by sub-sec.

97(5).

It is unnecessary to decide.

What then follows from these conclusions? Should the order

be left to operate without condition

3 (and condition

4 )

a s part

it?

His

Honour’s conclusion was that it was not just and

equitable to make the order unless those conditions were imposed.

A course open to this Court would be to send the matter back to

the Supreme Court to be heard and determined aoain. I

do not

think it is necessary to take that course.

As I have said. the

section

one which authorizes interference with legal and

equitable estates and interests and also with rights, but only

the case falls within the provisions

the section and it is

just and equitable that such interference be authbrized. At the moment the respondents have a lease of unit 7 which is one of the units in the shoppinq centre. They object to any change in thelr

legal entitlement which will have the effect of taking away the

practical advantage which they presently enjoy.

The purpose of

the application is to enable the supermarket to have much laruer

premises and thus change the nature of the shopping centre of

which the respondents

are

part.

The respondents

have

interest (usins that expression broadly) in that matter unless the proposed changes may adversely affect their business. But.

the evidence discloses and the learned

prjmarp

Judge has

found. that would be the likely consequence of the makins of an order whlch omitted condition 3 . In those circumstances I am

10.

unable to conclude that it is just and equitable that an order which does not preserve the advantage the respondents presently

have

just

and

equitable.

one

takes

into

account

the

invalidity

condition

4 .

the

problem

exacerbated.

follows that the application should have been dismissed.

Before concluding I should say a little of the course of the

hearing before his Honour and before this Court. The matters

argued before this Court were not the subject of argument before

his Honour and he did not consider them. The order sought in the

notice of appeal in the form in which it was when the appeal was

called on for hearing sought, not the excision of condition

3 ,

but a variation of it to enable the supermarket to sell packaged

meat which had been packaqed on the premises. It was only after

counsel for the appellants began to develop his arcrument that it

was perceived. both by the respondents and this Court. that his

argument had wider implications. It was then that more detailed

consideration was given to the matter by all parties. We gave

leave to the appellants to amend their notice

of appeal and leave

to the respondents to bring their cross appeal. Although the

parties had to prepare

part

of their argument, so

to speak, on

the

run.

no application

for

an adjournment was made and no

submlssion was made that there should be some limited

or special

order as to costs.

Nor was there any discussion concerning the

costs of the proceedings in the Supreme Court in respect of which

the learned primary Judge does not appear to have made any order.

In the circumstances

I would propose the

followmu orders:-

(1)	The appeal be dismissed.

11.

( 2 )

The cross appeal be allowed.

( 3 )

The order made

by the fjupreme

Court of the Australian

Capital Territory

on 20 May 1986 be set arjide and in lieu

thereof it

be ordered that the application made to that

Court be dismissed.

( 4 )

The

appellants pay the

second, third, fourth and fifth

respondents' costs of the appeal and cross appeal.

(5)

The first respondent be

liberty to apply

on 14 days'

notice for such order as

to the costs of the appeal and

crossd-appeal as it may be advised.

( 6 )

All parties be at liberty

to applv on 14 days' notice for

such

order as

the costs

of the proceedings in the

Supreme

Court

as they may be advised.

t ceriify that this and the I 0 prow%nng

pages are a true copy of the rsasone fry

lUdg!-nent herein of The Honourable

IN THE FEDERAL COURT OF

AUSTRALIA )

AUSTRALIAN CAPITAL TERRITORY

)

)	No. ACT G34 of 1986

DISTRICT REGISTRY

1 1

GENERAL DIVISION

)

ON APPEAL FROM

THE SUPREME COURT

OF THE

AUSTRALIAN CAPITAL TERRITORY

BETWEEN: GENA PTY. LIMITED

Firstnamed Appellant

ARGOS PTY. LIMITED

Secondnamed Appellant

AND :

THE PROPRIETORS OF UNIT PLAN 1 3 9

Firstnamed Respondent

NICK KARVOUNARIS

Secondnamed Respondent

KOULA KARVOUNARIS

Thlrdnamed Respondent

STAN KOKOULIS

Fourthnamed Respondent

IRENE KOKOULIS

Flfthnamed Respondent

CORAM:

Sheppard, Kelly and Neaves JJ

DATE:

February

1 9 8 7

REASONS FOR JUDGMENT

KELLY J:

I have had the advantage of readlng the draft

reasons for judgment prepared by Sheppard and Neaves JJ. I agree with them that the appeal should be dlsmlssed and the cross-appeal allowed and wlth the other orders they propose.

I respectfully

adopt their discussion of the

evldence before the Supreme Court of the Australlan Capital

Territory.

-2-

I set out those parts of the Unit Titles Ordlnance

1970 (the Ordinance) which seem to me to assist in resolution of the problem posed, namely, whether either of s . 9 7 ( 4 ) or (5) of the Ordlnance can support the condltions

which

are the sub~ect of

challenge

the appeal and

cross-appeal hereln.

" 9 7 . ( 1 ) A corporatlon, the administrator of a

corporation or all or any of the members of a corporation may apply to the Court for an order for the cancellatlon of the unlts plan.

( 2 ) A copy of an applicatlon under this

sectlon shall be served on the Reglstrar.

( 3 ) On an appllcation made

under

the

last

preceding sub-section, the Court may make a provisional order, or a final order, for the

cancellatlon of the units plan or	may make an
order dlsmlssing the appllcation.

( 4 ) The Court shall not make an order for the

cancellatlon of a units

plan

unless

it is

satlsfxed that, having regard to the rights and Interests of all persons having estates or interests (whether reglstered or not) in

the leases

of the units, it is lust and

equltable to do so.

(5) If the Court conslders, on an appllcation

for an order under thls sectlon, that it 1s necessary to Impose conditlons, and give dlrections, to be complled wlth before the maklng of a final order for the cancellation of the unlts plan for the purpose of protectlng the interests of the Commonwealth or for the purpose of adjustlng, as between a l l persons having reglstered estates or lnterests In the leases of the unlts, the respective rights and-dutles of those persons

so far as they may be affected by the

cancellation of the units plan, the Court shall make a provlsional order for the cancellatlon of the units plan speclfylng the condltlons and dlrectlons to be complled with before the maklng of a flnal order.

( 7 ) A flnal order may include directlons

be complied wlth after the cancellatlon of

the units plan and, In such a case, the order

may be enforced as if it were a judgment of

-3-

the Court

obtalned

a person for whose

beneflt the directions were glven agalnst the person required to comply with the directions.

9 8 . ( 1 )

On the registration of an order for

the cancellation of a units plan - (a) the corporatlon is dlssolved;

(b)

the lease of the common property and the

lease

each

of the unlts

are

determined;

(c)

the land comprlsed In those leases forms one parcel of land; and

(d)

the persons who were, immedlately before the registratlon of the order, the proprietors of the unlts become possessed of an estate of leasehold In the parcel of land as tenants In common In undlvided shares proportlonal to the unlt entltlement of thelr respective unlts, or, ~f a person was, immediately before the reglstratlon of the order,

the

proprletor

all the unlts, that

person becomes possessed of an estate of leasehold in the parcel of land, for the term commenclng on the registratlon of the order and explring on the date on which the lease that was, by section 25 of this Ordinance, determined on the reglstratlon of the unlts plan would have expired I f it had not been so determined and sublect to the provisions, covenants and condltions to which that lease was subject on the date

immedlately before the reglstratlon of the units plan, as ~f a lease of the parcel of land had been granted to them or to h m , as the case may be, by the Commonwealth under the City Area Leases Ordinance for that term and subject to those provlslons, covenants and conditlons.

9 9 . ( 1 )

On the

dissolutlon of a corporatlon

under the last preceding sectlon -

(a)

all rights, whether at law or In equity,

vested ln the corporatlon

immedlately

before the dissolutlon

are

vested

jolntly In the persons

who

were,

lmmedlately before the dissolutlon, the

members of the corporatlon;

-4-

subject

the

next succeeding

sub-section,

the

persons

who,

immediately before the dlssolution, were

the members

the corporation

are

~ointly

and severally liable for all

the

liabilities of the

corporation

subsisting

immedlately

before

the

dissolution; and

for the purposes of the last two preceding paragraphs, a reference in an Instrument to the corporation shall be read as a reference to those persons.

On an application made to the Court before the order for the cancellation of the unlts plan is made, the Court may, If it conslders, in the circumstances of the case, that It 1s just and equitable to do so, by order vary the operation of paragraph (a) or (b) of the last preceding sub-section In such manner as the Court thinks fit.

1 0 0 . ( 1 )

Where

(a)	after the reglstration of a unlts plan, a building or other improvement on the parcel 1 s damaged or destroyed;

(b) an

order

for the cancellation of the

units plan has not been made under thls

Part; and

(c)	an application for such an order 1s not pending,

an appllcation may be made to the Court for

an order approving a scheme that makes

provision for the reinstatement of the

building or other improvement, or, In a case

where a unit has been damaged or destroyed,

for the elimination of that unit and for any

consequential alteration of the units

plan.

103. Each of the fo-llowing persons has the right to appear and to be heard in support of, or in oppositlon to, an applicatlon made under section 97 or 100 of this Ordlnance:

(a)	the corporation or, if an administrator has been appolnted, the administrator;

(b) a member of the Corporation;

(c)	a person clalmlng to have an estate or interest in a unit;

-5-

(d) an

a buildlng or other improvement on the

parcel; and

insurer who has effected insurance of

(e) the Mlnister ."

I respectfully agree, for

the reasons given

Sheppard and Neaves JJ, that s .97(5)

provides no support for

either of the

third and fourth "terms

and conditions" set

out In the order of the Supreme Court.

Nor do I think that

s .97(4)

provides such support.

As a matter of construction it seems to me

that on

an applicatlon for the cancellation of a units plan the only provision whlch permits of the imposition of conditlons

to be complied with before the making of a final order for

the cancellation of the units plan 1 s s . 9 7 ( 5 ) . The sub-section 1s in marked contrast to s .97(4) the terms of which are directed, not to the imposition of conditlons, but

to the preservatlon of rights and interests. It seems to me

that those

rlghts and Interests

are

those

which

flow

directly from and as a result of the nature of the estates or interests (whether reglstered or not) which any person may have in a lease of one of the units of a units plan. Clearly such persons would Include at least the lessee of a unit and any legal or equitable mortgagee of it.

Significantly enough, s.97 makes no provision for servlce

a copy of an application on the persons referred to in sub-s.(4) although a copy of an applicatlon is to be served

on the Reglstrar. One

notes, of course, the rights

appearance given by

s .103 .

An application may be made, Inter alla, as in the

Instant case, as a result of a vote by a ma~orlty of the

-6-

corporation or, in an extreme case, by

one member only of

the corporation. Clearly the duty cast upon the Court

to be

satisfied under

s . 9 7 ( 4 )

that it

just and equitable to

order cancellation of a units plan can hardly be satlsfied

unless the Court is aware, at the least, of all persons who

have estates or interests whether registered

or not in the

leases

the units concerned and the nature of those

estates and interests.

No doubt the Court might order that

service of a notice of an application under

s.97 be effected

all

the

persons

referred

s . 9 7 ( 4 )

and

appropriate case might well be requlred, as a matter of

justice,

Insist upon servlce of such notlces. It seems

me,

however,

that,

under

any

circumstances,

necessary

that

the

Court

consider

all

the

rlghts

and

Interests of the persons havlng estates or Interests In the leases of the units, no doubt after considering appropriate evidence as to what those rights and Interests and who those

persons are.

Under

s . 9 8 ,

reglstratlon

order

for

the

cancellation of a units plan effects a radical change in the

nature of the reglstered Interest in a unlt of the unlts

plan. What was before a single certificate

title in

respect

a defined unlt plus the share in the common

property which practically the lessee has by virtue	of
membership of the corporation becomes slmply a tenancy in

common of a fractlon proportional

to the unit entltlement

his unit. An estate

as tenant in common of a fraction of

land is obviously less deslrable in the eyes of mortgagees

-7-

and sublessees and has many attendant difficulties.

It is

because of those attendant difficulties, one

would think,

that the Ordinance

was made.

It seems to me, therefore,

that

s . 9 7 ( 4 )

has its

work to do simply in relation to ensuring

that it 1s just

and equitable to cancel the plan

having regard to the

results attendant upon cancellation. Thls, in a given set of circumstances, may not be an easy task but It gives to the sub-section adequate meanlng without the necessity for flnding an lmplication that it permits of the mposition of

conditlons

other

than those

referred

s . 9 7 ( 5 ) .

But there is another reason why It seems to me that terms

and conditlons such as those sought to be imposed, which

effectively amount to redevelopment conditions, ought not to

be the subject

of an

order on an application under s . 9 7 .

The Ordinance provides by s.100 for the situatlon which

occurs when a bullding 1s damaged or destroyed.

It makes no

such provlsion

in respect of redevelopment

and I do not

think the lacuna can

be fllled by attributing to s . 9 7 ( 4 ) a

meaning

which,

my respectful oplnlon, it does not

properly bear.

It follows, I thlnk, that no such conditlon as 1s

to be found In the thlrd and fourth terms and conditions 1s

permltted

s . 9 7 ( 4 ) .

In my opinion,

therefore, the

appeal

should be

dismissed and the cross-appeal allowed.

I c e f 2 , f;;

:hrrt

th:s a d

t:le

pret.ed::,g

p>Lp

e s are a true COPY of t h e

~c:t:.nns f o r Judgment herein of hls H m o u r

Mr. Jusi.1oc KgL-L’f

hac->\<.>,. P-r-.b\!Cl”..

Aeaociate

Dated* =v‘-”

F-&\-<-- - V\%7

IN THE FEDERAL COURT

OF AUSTRALIA

) )

AUSTRALIAN CAPITAL TERRITORY	)
) No. ACT G 34 of 1986
DISTRICT REGISTRY	) )
GENERAL DIVISION	)

ON APPEAL FROM

THE SUPREME COURT

OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN: GENA PTY. LIMITED

First Appellant

ARGOS PTY. LIMITED

Second Appellant

AND:

THE PROPRIETORS - UNITS PLAN N0.139

First Respondent

NICK KARVOUNARIS

Second Respondent

KOULA KARVOUNARIS

Third Respondent

STAN KOKOULIS

Fourth Respondent

IRENE KOKOULIS

Fifth Respondent

CORAM: Sheppard, Kelly and Neaves JJ.

m:	20 February 1987

REASONS FOR JUDGMENT

NEAVES J.

This is an appeal and cross-appeal from

a judgment of

the Supreme Court

the Australian Capital Territory (Miles

2 .

C.J.) given on 20 May 1986 upon an application made to that Court under s.97 of the Unit Titles Ordinance 1970 (A.C.T.).

The

application sought

order for the cancellatlon of a

certain

units

plan

- identified as Units Plan No.139 -

registered under the Real Property

(Unit Titles)

Ordinance 1970

( A . C . T . ) .

the Court made

a provisional order for cancellation

of the units plan and imposed conditions,

and gave directions,

to be complied with before the making

a final order. It

will be necessary to refer to these conditions and directions

but, before doing

s o , it

may be convenient

to refer to the

relevant legislative provisions and	to identify the parties and
their respective interests.

The Unit Titles Ordinance

1970 (A.C.T.)

("the Unit

Tltles

Ordinance")

described

its

long

title

as an

Ordinance relating

t o the sub-division of land into units, unit

subsidlaries and common property.

Part I11 of the Ordinance

(comprising ss.10-23) makes provision whereby the lessee under

lease of

a parcel of land granted under, or continued in

force by, the City Area Leases Ordinance

1936

(A.C.T.)

("the

Clty Area Leases Ordinance")

may obtain the approval of the

Mlnlster of proposals for the sub-division of the parcel under

the Ordinance. Sub-section

11(1)

entitles the lessee under

such a lease to put forward proposals which provide for the sub-division of the parcel into not less than four units and

common property and which may provide

for one or more than one

unit

subsidiary

appurtenant

a unlt

(sub-s.ll(2)).

The

proposals are to include specified dlaqrams

a.nd other documents

including a

schedule specifying a

whole number in respect of

each unit being the

unit entitlement proposed for that unit,

whole number being the aggregrate unit entitlement proposed for

all the units, the rent proposed to be reserved under the lease

of each unit and, where the proposals provide for the erection

or alteration of, or

an additlon to, a building, a copy of the

plans

and

specifications

for

the

erection,

alteration

addition (55.12, 13).

Sub-section 16(1) prescribes

certain

conditions

precedent to the approval of the proposals. One of the matters

so prescribed is that each unit must be suitable for separate

occupation and for use in

a manner not inconsistent with the

covenants in the lease of the parcel. Another is that the

schedule of

unit entitlement is reasonable, having regard

the respective values of the unlts. The

Minister may, in his

discretion, approve or refuse to approve the proposals

if the

lessee of the parcel is

in breach of a

covenant contained in

the lease of the parcel or in breach of

a provision of the City

Area

Leases

Ordinance

or a requirement

made

under

that

Ordinance (sub-s.16(3)).

Where the Minister has approved the proposals, the

appropriate steps may be taken to have the necessary diagrams

and schedules prepared for registration under the Real Propertv

(Unit Titles) Ordinance 1970

(A.C.T.)

( 5 . 2 2 ) .

On and after

registration of the units plan, the parcel is sub-divided in

the manner specified in the diagrams in the units plan	( s . 2 4 ) .
Sections 25 and 26 provide:

“25.

(1) On the registration

the units

plan -

(a) the lease of the parcel is determined;

(b)

the person who was, immediately before

the registration of

the units plan, the

lessee of the parcel becomes possessed

of an estate of leasehold In each unit

for

the

term

fixed

under

the

succeeding sub-section and subject

the provisions, covenants and conditions

set out in the units plan in relation to

that unit as if a separate lease of that

unit for that term and subject

to those

provisions, covenants and condltions had been granted to him by the Commonwealth under the City Area Leases Ordinance;

and

(c)

the corporation becomes possessed of an

estate

leasehold

the

common

property for the term fixed under the

next succeeding sub-section and subject

the

provisions,

covenants

and

conditions set out in the units plan in

relation to the common property

as if a

lease

the common property for that

term and subject to those provislons,

covenants

and

condltions

had

been

granted

the

corporation

the

Commonwealth under the City Area Leases

Ordinance.

( 2 ) The term

of the lease of a unit and of

the lease of the common property commences on the

registration of the units plan and expires on the

date specified in the unlts plan, being the date

on which, but for the operation of this section,

the term	of the lease of the parcel would have
explred.

( 3 ) The estate of which

a person or

the

corporation, as the

case

may

be, becomes

possessed under this section

(a)

is subject to any mortgage referred to

in section

10 of the Real Propertv (Unlt

Titles) Ordinance

1970; and

(b)

1 s

subject to, and has appurtenant to

it, the easements created by sectlon

this

Ordinance

and

any

easement

referred

section

10 of

that

Ordinance.

26 (1) The corporation shall

hold the common

property in trust for the persons

who are for

the

time

being the members of the corporation

tenants

common

undivided

proportional to the unit entitlements of their

respective units, and shall afford those persons

opportunity for the reasonable use	and enjoyment
of the common property.

( 2 ) The

estate in the lease

the common

property held by the corporation is not capable,

either at law or in equity,

of being transferred,

assigned, sub-let

or mortgaged."

On and after the registration

of the units plan, certain

easements are created by virtue

of the Ordinance

( s . 2 7 ) .

Another consequence

of the

registration

the

units plan is that there is thereupon constituted

a body

corporate under the name "The Proprletors

Units Plan

No.

' I ,

the number to be included

the name being the

number allotted to the units plan by the Registrar upon its

registration

( s . 2 9 ) .

Such

corporation

charged,

inter

U,	with the enforcement of its articles and the control,

management and administration of the common property (s.36).

It is convenient to interrupt the reference to the

relevant legislation

this point to mention that Units

Plan No.139 effected the sub-division of the parcel

of land

known as Block 6, Section 120.

Division of Kaleen in the

Australian

Capital

Territory.

Immediately

prior

the

registration of the units plan that parcel of land was the

subject of a lease under the City Area Leases Ordinance but

that lease determined upon such registration.

The

units

plan effected a sub-division of the parcel into eight units

and

common

property.

Separate

retall

businesses

are

conducted in

the eight units, the whole being known as the

Kaleen Shopping Centre.

The

lease

Unit No.8

is held by Argos Pty.

Limited, the second appellant, while Gena Pty. Limited, the

first appellant, occupies the premises

as a sub-lessee under

a	monthly tenancy. From the premises the latter company

operates a supermarket

business

under

the

name

"Kaleen

Shop-Rite". Amongst the goods in which the supermarket

deals is meat which has been pre-packaged elsewhere and is

bought on to the premises for the purposes of sale.

There

is nothing in the lease or sub-lease of the unit or in any

contractual

arrangement

between

the

first

second

appellant and the other unit holders which would preclude

the

first

second

appellant

from

selling

the

supermarket meat pre-packaged on the premises or, indeed,

from operating a retail butchery section	as part of the
supermarket business.

A	retail butchery business is operated from Unit

No.? by Kaleen

Market

Butchery

Pty.

Limited

under

sub-lease from Nick Karvounaris, Koula Karvounaris, Stan fifth respondents.

The

busmesses

operated

from the remalning six

units are a hairdresser,

a dentist, a newsagency, a Chinese

restaurant, a chemist and a take-away food shop.

The

lease of the common property is held by

the

corporation known as The Proprietors - Units Plan No.139,

the first respondent. That corporation was the applicant in

the proceedings before the Supreme Court.

The lease of each of the units is for a term which

commenced on

22 June 1983 and will expire on 21 June 2027.

The lessee

each

lease

has

covenanted

with

the

Commonwealth of Australia to use the unit "only for

the

purposes

retail

trading

personal

services

agencies

trading offices cafes and restaurants".

Argos Pty. Limlted is also the lessee from the

Commonwealth of Australia of

a parcel of land

known as Block

25, Section 120, Division

Kaleen

the Australian

Capital

Territory.

That

parcel

land

has

a boundary

which, for part

its length, forms

a common boundary with

the land upon which Unit

No.8 in Units Plan

No.139

situate. The lease

Block

25 is

for

a term

which

commenced on

29 March

1984 and will terminate on 21 June

2076.

The land may be used only

"for the purpose of the

handling and storage of goods excluding retail sales and

the

provision of staff amenities for the contiguous

shop". The

reference to

"the contiguous shop" is an obvious reference

to Unit

No.8.

29 September

1985 a

meeting was held of the

members of

The Proprietors - Units Plan No.139, that is to

say,

of those

who were the registered proprietors of the

leases of each of the units. The purpose of the meeting was

to discuss

a proposal under which the existing units plan

would be cancelled, the parcels

of land comprising Blocks

and 25, Section 120, Division of Xaleen would be amalgamated

into a slngle parcel, a new lease would be granted under	the
City Area Leases Ordinance in respect of the composite

parcel, existing leases being surrendered

for the purpose,

and a

new units plan would be registered in respect

of the

enlarged parcel. Under the proposal the additional land

would, in effect, be added to Unit No.8.

Resolutions

were

passed

the

meeting

majority

the

members present

person or by proxy

favouring the carrying out of the proposal.

The proprietors

Unlt No.?,

however, were opposed to the proposal and

voted against the resolutions.

Thereafter, application was made to the Supreme

Court

The

Proprietors

Units Plan No.139 for the

cancellation

Units

Plan

No.139

subject

certain

conditions and directlons set out in the applicatlon. It is

unnecessary

refer

detail

the condltions

and

directions proposed by the applicant but It is deslrable at this stage to refer to the terms of the order made by the Supreme Court. That Court ordered that Units Plan No.139 be

cancelled upon the following terms and conditions:

“1. That untll further order

the Court

the

order for

cancellation

provisional only.

2 . That no final order for cancellation be made until -

the

Minister

has

approved

the

proposals for the subdivision of

that parcel of land being the

aggregate of Block

6 and Block 25

Section 120 Division of Kaleen as set out in the draft units plan being annexure I to the affidavit

of Barry Hayward sworn	6 March
1986 and filed herein,

the

Minister

has made an

endorsement

his approval of

the said proposed subdivlsion in accordance with Section 2 2 ( 4 ) of

the Unit Titles Ordinance

1970,

and

the Registrar has signified that

the

documents

referred

Section 9(1)

of the Real Property

(Unit

Titles)

Ordlnance

1930

CSlC3

relating

the

said

proposed

subdlvision

have

been

sighted by him or on

his behalf

and that there

is, subject to the

cancellation of

Units

Plan

No.139,

objection

the

lodgment

those documents and

the proposed units plan.

That any lease of the premises or of

unlt now partly constituted by Unit

No.8

of Units Plan

No.139 include a provision

that or to the effect that the premises

unit

shall

not

used

for the

purpose of a

retail butchery other than

the sale	of meats pre-packed off	the
premlses.

4 .

That

Argos

Pty.

Limited

its

own

expense complete the erection of the

building on Block

25 and complete the

alteration of the building on Block 6 as shown in the plans being Annexure I and

Annexure

to the said affidavit of

Barry Hayward and Exhibit

D herein.

5. That the costs and expenses arising from

the cancellation of Units

Plan No.139

and the registration of a units plan in

substitution therefor be borne by the

proprietors of the units in Units Plan

No.139

proportion

the

units

entitlements shown on

the

substituted

units plan, such costs

include the

10.

party and party costs

and reasonable

disbursements incurred by the parties

who appeared in the proceedings.

6. That the office copy of any final order

for cancellation of Units

Plan No.139

not be lodged for registration unless

there be lodged at the same time the

necessary documents for registration

the said substituted units plan.

7. That

the registration

of the

said

substituted plan be effected immediately

after

the registration

of the

final

order for cancellation of Units Plan

No. 139.

8 .

That the

parties be granted liberty

apply.

Gena	Pty. Limited and Argos Pty. Limited have

appealed against so much of the order

purports to make

the order of cancellation of Units

Plan No.139 conditional

upon there being

a restriction on the sale of meat from the

premises constituting the proposed enlarged Unit No.8.	The
proprietors of Unit No.7, being the second, third, fourth

and

fifth

respondents,

have,

leave

the

Court,

cross-appealed on the following ground:

"There is no power in the Unit Titles Ordinance 1970 to grant an order for cancellation of a units plan for the purposes of redeveloping the

lmprovements the subject of the

units plan with

directions or conditions not adjusting the rights

and duties

of persons having registered estates

in the leases of the units."

It is

now

necessary to

refer to certain further

provisions

the

Unit

Titles

Ordinance.

Part

VI11

(comprising ss.97-105) 1s headed

"Cancellatlon

and

Alteration of Units Plans". Sections 97, 98 and 99 should be set out in full. Sectlon 97 provldes:

11.

"97. ( 1 ) A corporation, the administrator

a corporation or all or any of the members of a

corporation may apply to the Court for an order

for the cancellation of the units plan.

( 2 ) A

copy of

an applicatlon under this

section shall be served on the Registrar.

( 3 ) On

an application made under the last

precedlng

sub-section,

the

Court

may

make

provisional order, or

final order, for the

cancellation of the units plan or may make	an
order dismissing the application.

( 4 ) The

Court shall not make

order for

the cancellation

a units plan unless it is

satisfied that, having regard to

the rights and

interests

all

persons

having

estates

interests

(whether

reglstered

not)

the

leases of the units, it is just and equitable to

do so.

( 5 ) If

the

Court

considers,

appllcation for an order under this section, that

it is necessary

impose conditions, and give

directions, to be complied with before the making

a final order for the cancellation

of the

units plan for the purpose of protecting the

interests of the Commonwealth or for the purpose

of adjusting, as between

all

persons

having

reglstered estates or Interests in the leases of

the unlts, the respective rights and dutles of

those persons so far as they may be affected by

the cancellation of the units plan, the Court

shall

make

a provisional

order

for

the

cancellation of the units plan specifying the

condltions and directions to be complied with

before the making of

a final order.

( 6 ) The

Court

may, if satisfied,

on an

application

made

for

the

purpose,

that

the

conditions

and

dlrectlons

specified

the

provisional order have been complied wlth, make

final order for the cancellation of the units

plan.

( 7 ) A final order may include directions to

be complied

with after the cancellation of the

units plan and,

such a case, the order may be

enforced as

If it were

a judgment of the Court

obtained

person

for

whose

benefit

the

dlrections were given against the person required

to comply wlth the directions."

12.

The references to "the Court" are references to the Supreme

Court of the Australian Capital Territory.

It may also be

noted that the reference in sub-s.(3) to

"the last preceding

sub-section'' is obviously a reference to sub-s.(l). Section

98 provides:

"98.

(1) On the registration of

an order for

the cancellation of

a units plan

(a)

the corporation is dissolved;

(b)

the lease of the common property and the

lease

each

the

units

are

determined;

(c)

the land comprised In those leases forms one parcel of land; and

(d)

the persons who were, immediately before

the

registration

the

order,

the

proprietors

the

units

become

possessed of

an estate of leasehold in

the parcel of land as tenants in common in undivided shares proportional to the

unit

entitlement

their

respective

units, or if a person was, immediatley before the registration of the order,

the proprietor of all

the units, that

person becomes possessed of

an estate of

leasehold in the parcel of land, for the

term commencing on the registration of

the order and expiring on the date on

which the lease that was, by section

of this Ordinance, determined on the

registration of the units plan would

have expired if it had not been

determined

subject

and

the

provlsions, covenants and conditions to

which that lease was subject on the date

immediately before the registration of

the units plan, as if a lease of the

parcel of land had ben granted to them

or to him, as the case may be, by the

Commonwealth under the City Area Leases

Ordinance for that term and subject to

those

provisions,

covenants

and

conditions.

( 2 ) For the purposes of paragraph

(d) of the

last

preceding

sub-section,

if,

immediately

before the registration of the order, two or more persons were proprietors, as joint tenants or as

tenants in common, of a unit, two or more units

or all the units, then, the share in the estate,

or the whole estate, as the case may be, vested

by that paragraph in those persons is vested in

them jolntly if they

were joint tenants or, if

they were tenants in common, is vested in them

tenants in common

In the same shares

as they held

in the unit

or units.

( 4 ) The

reference

paragraph

(d) of

sub-section (1) of

this

section

the

provisions, covenants and conditions

to which the

lease of the parcel was subject shall be read

including a reference

to a provision, covenant or

condition of that lease

varied under section

11A of the City Area Leases Ordinance on an applicatlon made before the registration of the

unlts

plan

an application

made

contemplatlon

of the

application for the order

for the cancellation

of the units plan.

( 5 ) The share in the estate, or the estate,

as the case may

be, of which a person becomes

possessed under paragraph

(d) of sub-section (1)

of this section is subject

to any mortgage and

any easement referred to in section

of the

Real Property (Unit Titles) Ordinance

1970."

Section 99 provides:

" 9 9 . (1) On the dissolution

of a corporation

under the last preceding section

all rights, whether

at law or in equity,

vested in the corporation immediately

before

the

dissolution

are

vested

~ointly in

the

persons

who

were,

immediately before the dissolution, the

members of the corporation;

subject to the

succeeding

sub-section,

persons

the

who,

immediately before the dissolution, were

the

members

the

corporation

are

jointly and severally liable for all the

llabillties of the

corporation

subsisting

immediately

before

the

dissolution; and

for

the

purposes

the

last

two

preceding paragraphs, a reference in an

instrument to the corporation shall be

read as a reference to those persons.

14.

( 2 )

an application made to the Court

before

the

order for the cancellation

the

unlts

plan

made,

the

Court

may,

considers, in the clrcumstances of the case, that

it is just and equitable to do so, by order vary

the operation of paragraph (a) or (b) of the last

preceding sub-section In such manner as

the Court

thinks fit.

It may be

noted, in passing, that ss.100-102 make

provision for the case where, after

the registration of

units plan, a building or other improvement on the parcel of

land the subject of the units plan is damaged or destroyed.

In such a case, the Supreme Court may, by order, approve a

scheme that makes provision for the reinstatement

the

building or other improvement

or, m a case where a unit has

been damaged or destroyed, for the elimination of that unit

and for any consequential alteration

the units plan.

Apart from those provisions

the Ordinance makes no provision

for alterations being made to a units plan either by

altering the boundaries of the parcel of land to which	it
relates or otherwise.

The provisions made by

s s . 9 7 - 9 9

of the Unit Titles

Ordinance are apt to deal with

situatlon where the

cancellation of a units plan is

an end in itself

or is to be

followed by

a simple transaction such as the sale

of the

sub~ect

parcel of land.

It is, perhaps, not so clear that

the

provisions are adequate where the cancellation of

existlng

units

plan

but

a means

towards

the

implementatlon of a

broader plan involving

a new units plan

providing

for a

re-arrangement

inter

the

respective

rights and obligatlons of

the unit proprietors or embracing,

15.

as here, an additional parcel of land. The legislature, as

has already been noted, has made special provision in the

case of damage to

or destruction of

a building

or other

improvement on the parcel of land the subject of

a units

plan but no special provision 1 s made in any other case.

But, it must be remembered

that, in the case of the

proposed cancellation of

a units plan which is intended to

be followed by the registration of a new units plan, the role of the Supreme Court is strictly limited. Its role is

to determine whether

or not an order for the cancellation of

the existing unlts plan, provisional or

final,

should or

should not be made and it may not make

order for

cancellation unless it is satisfied that it is just and

equitable to do so.

It is given no general power to approve

a new units plan or a scheme for such a plan, the absence of such a power in s.97 being in marked contrast to the power

which the Court is expressly given by s.100 where a building

or	other improvement has been damaged or destroyed. But

thls does not mean that the power to order cancellation

of a

units plan is not available in

a case such as this where a

new

units

plan

substitution

for the

old

contemplation.

But, the Ordinance proceeds

on the basis

that, if

a new units plan is to be proposed, approved and

registered, the procedures prescribed in

Part I11

of the

Ordinance will be followed. In other

words,

the proposed

new units plan will be dealt with in

the same way as

if it

were

an original scheme. That this

1 s

the position is

illustrated by the reference in sub-s.ll(1)

of the Ordlnance

16.

to "a lease of a parcel of land referred to in paragraph	(d)
of sub-section (1) of section 98 of this Ordinance".

If the Court is to reach

a state of satisfaction

that it is just and equitable to make

order for the

cancellation of

a units plan, it must do so "having regard

to the rights and interests of all persons having estates

interests (whether registered

or not) in the leases of the

units". The Court must first identify all persons who have

estates

interests

the

leases

the

units.

The

expression "estates

or interests" in this context must,

think, be limited to those having a legal or equitable

estate or

interest in a relevant lease. Having identified

such persons, the Court is required to have regard to "the

rlghts

and

Interests"

of those

persons,

composite

expression which, in its setting, must, I think, be given a

very wide situatlon in which, unless the standard form of articles of

meaning.

The sub-section

dealing

with

association of

the corporation managing the units plan has

been

amended

special

resolution

provide

the

contrary, a resolution for cancellation passed by a simple

majority of the proprietors

the units present at the

meeting will be sufficient to bring the matter before the

Supreme Court.

In these circumstances,

sub-s.97(4) should

not be read In any restricted sense unless there are

compelling reasons to

do so.

I see no warrant for giving

the words "rights and interests" a more limited meaning than

those words are capable of bearing.

17.

Attention was also focussed during argument on the

provisions of sub-s.97(5). It seemed to be assumed that

that sub-section delimited the kinds of condltions and

directions which the Supreme Court might decree when making

an order for cancellation

of a units plan under sub-s.97(3),

that the Court might impose

no condition and give no

directlon other than a condition or direction for the

purposes of protecting the interests of the Commonwealth

for the purpose of adjusting, as between all persons having registered estates or interests in the leases of the units,

the respective rights and duties

of those persons so far as

they might be affected by the cancellation of the units

plan.

In my opinion, sub-s.97(5) is dealing

with specific

situations. Its purpose is clearly to limit the power of

the Supreme

Court

the

situations

with

which

the

sub-section

concerned,

ensuring

that

any

such

situation only a provisional and not a final order is made

until such time as the conditions and directions necessary

to deal with the particular situation have been satisfied.

The sub-section does not,

in my opinion, have the effect of

limiting any power which the Supreme Court otherwise

has to

impose conditions

give directions to be carried out

before a final order for cancellation of

a unlts plan is

made. One source of

such power is, I think, to be found in

sub-s.97(4).

I do not read that sub-section

as requiring

the Supreme Court,

if it concludes on the material put

before it that

it would not be just and equitable to make

18.

order for seems to me that the sub-section is wide enough in its terms

cancellation,

dismiss

the

application.

to permit the Court to mould its order in such

a way that,

by imposing conditions or giving directions to be carried

out prior to the order for cancellation being made

final, a

situation can be achieved in which it can

be satisfied that

it is just and equitable to make the order

for cancellation.

If, of course, the conditions are not fulfilled, the order for cancellation will not come into effect.

But,

construe the sub-section

would, so it seems to

me, reflect a

desirable element of flexibility in the procedures and is

more likely to accord with the legislative intention.

The

power to impose conditions is not, however, unlimited. Its limits are to be found in what is necessary in order that the making of the order for cancellation can be seen by the

Court as being something which it is just and equitable to do having regard to the rights and Interests of all persons having estates or interests in the leases of the units.

I turn, then, to the question whether the Supreme

Court had power to attach to the order for cancellation of the units plan the terms and conditions expressed in its

order. It may be said,

once, that sub-s.97(5) provides

support

for conditions are not directed to either of the purposes

those

conditions.

That

because

the

mentioned in directed to protecting the interests of the Commonwealth

that

sub-section.

They

are clearly

not

and, as

there is no relevant right or duty

o f the holders of

units 7 and 8 which would be affected by the cancellation of

19.

the units plan, the conditions cannot be supported as being

directed to adjusting, as between the holders of those

units, their respective rights or duties.

The	question then is whether the conditions are

supportable by sub-s.97(4) construed in the manner to which

I have already referred. Subject to what is said hereafter

concerning

the

steps

necessary

for

the

approval

and

registration of a new units plan

for the composite parcel of

land comprising Blocks

and

25, Section

120,

I am of

opinion that the condition numbered 2 was within power.

could hardly be considered just and equitable, in the

circumstances of this case, to order cancellation of the

units plan unless

a new

plan was thereupon to come into

existence.

Condition

was

clearly

directed

that

situation. Similarly, conditions numbered

5, 6

and 7

appear to desirable in order that it may be seen to be just and

satisfy

the test of conditions

necessary

equitable that

the existing plan be cancelled. Condition

numbered 3 ,

however, stands in a different situation. Its

purpose is to ensure that if

a new units plan comes into

existence the proprietor of the expanded unit

No.8 will have

restrictions placed upon its freedom to trade additional to those to which it is subject under the existing units plan.

concede power

the Supreme Court to impose such

condition would seem to involve the step that the Supreme

Court may, by the imposition of conditions, in effect impose

2 0 .

its views of what any new units plan

in respect

of the

composite parcel of land should contain. Whatever be the

width of the power conferred by

sub-s.97(4), it cannot, I

think, be held to extend

so far.

In a	case such as the present where the order for

cancellation is sought as part of

scheme to substitute

new units plan for the existing one, no real problem would seem to arise in following out the procedures necessary

under the Unit Titles Ordinance if

all interested parties,

including the Minister, are in full agreement as to what is to occur. But there is clearly a problem where, as in this

case,

the proprletors of one of the existing units are

opposed to the proposed unlts plan or are not prepared to

agree to that plan unless

it is structured in such

a way as

to give them rights additlonal to those

which

they have

under the existing plan. The problem

is illuminated if one

conslders seriatim the steps which must be taken

the

result desired by the majority

the members of the

managing

corporation

achieved,

recognising,

however, that,

in practice, all the steps must be able to

take place in sequence but almost instantaneously.

"he first step is for the existing units plan to

cancelled. Immediately upon registration of the final order

for cancellation, the management corporation is dissolved,

the lease of the common property and the lease of each of

21.

the eight units are determined and the land comprised in

those leases (Block

6 , Section

120)

forms one parcel

land. "he persons who had been the proprietors of the eight

units immediately before the registration of the order for

cancellation become possessed of an estate of leasehold in

Block

6, Section

120

as tenants in common in undivided

proportional

the

unit

entitlement

their

respective units.

The statutory lease so

created is for a

term

expiring on the date on which the lease of Block

would have expired had it not been determined upon the

registration of Units Plan

No.139 and is subject to the same

provisions, covenants and conditions as were contained in

that lease.

It may be noted that there is

no evidence

before

the

Court

as to

the

provisions

that

lease

prescribing the purposes for which Block

6 might be used.

The next step would be for that statutory lease and

the lease held by Argos Pty. Limited over Block

25, Section

120 to be

surrendered, for the two parcels of land to be

amalgamated and for a new

lease over the composite parcel to

granted

under

the

City

Area Presumably, the lessees of that parcel would be identical

Leases

Ordinance.

with

those

who, on

registration

of the

order

for

cancellation, became the lessees

Block

6, Argos Pty.

Limited being one such.

The lease of the composite parcel

would, of course, contain

a purpose clause but it is not

clear what

the terms of that clause would be, particularly

2 2 .

as it seems clear that the purpose clause contained in the

existing lease of Block 25 is different from that which was

contained in the lease of Block

before that lease was

determined and different from the purpose clause which

appeared in the lease of each of the units	in Unit Plan
No. 139.

The lessees under the lease of the composite parcel would then apply to the Minister under sub-s.ll(1) of the

Unit Titles Ordinance for approval of proposals for

the

sub-division of the composite parcel under the Ordinance. bind a minority so that it would seem that any proposal for

a units plan could only be put forward for approval if the

lessees were unanimous. On the evidence as it presently

stands, there is no unanimity amongst those who,on the

hypothesis that the provisional order for cancellation is

made final and registered and

a lease for the composite site

is granted, would

the lessees entitled to apply

for

approval of a new units plan.

In the absence of such unanimity, it seems to me

that it is impossible to be satisfied, having regard to the

rights and interests of all the persons referred to in

sub-s.97(4) of the Ordinance, that it is just and equitable

to make an order for the cancellation of Units Plan No.139.

am,

therefore,

of opinion that the appeal should be

dismissed, the cross-appeal should be allowed and the order

2 3 .

of the Supreme Court should be set aside and

in lieu thereof

ordered

that

the

application

that

Court

dismissed.

I	certify that this and

the preceding

22 pages are

a true copy of the Reasons

for Judgment herein of the

Honourable	Justice	Mr
Neaves .

Associate

Dated:

20 February 1987

Counsel for the appellants

Mr D.M.J. Bennett, Q.C.

and Mr S . L .

Walmsley

Solicitors for the appellants

Gallens

Counsel for the first respondent

Mr T.J . Higgins

Solicitors for the first respondent:	Peter Smyth, Burnett	& Co.
Counsel for the second, third,	Mr B.J. Salmon, P.C.
fourth and fifth respondents	and Mr F.J. Purnell
Solicitors for the second, third,
fourth and fifth respondents	Colquhoun Murphy
Dates of hearing	5, 6 November 1986

[1987] FCA 61

20 Feb 1987