Makris v Strata Corp 14378 INC
[2009] SADC 6
•3 February 2009
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Minor Civil Review)
MAKRIS v STRATA CORP 14378 INC
[2009] SADC 6
Judgment of His Honour Judge Nicholson
3 February 2009
REAL PROPERTY - STRATA TITLE - MANAGEMENT AND CONTROL - OTHER MATTERS
ESTOPPEL - ESTOPPEL IN PAIS - THE REPRESENTATION - INDUCING DETRIMENTAL CHANGE OF POSITION
Applicant is the owner of a penthouse home unit - two dogs and a cat live in the unit with the applicant contrary to the relevant strata corporation articles - respondent strata corporation brought proceedings pursuant to s41A of the Strata Titles Act 1988 for orders, inter alia, that the applicant be directed to observe the article prohibiting animals and to remove the animals from the building. Magistrate found in favour of the respondent strata corporation - at hearing of minor civil review applicant argued that strata corporation was estopped from relying on the relevant article and a subsequent resolution passed affirming the no pets policy - held, on application for review, no grounds for an estoppel made out - decision of Magistrate affirmed.
Magistrates Court Act 1991 ss38(4), (6), (7) ; Strata Titles Act 1988 , referred to.
Fox v Percy (2003) 214 CLR 118; Payne v Parker [1976] 1 NSWLR 191; Jones v Dunkel (1959) 101 CLR 298, considered.
MAKRIS v STRATA CORP 14378 INC
[2009] SADC 6
By application dated 25 September 2008 and filed 8 October 2008, the applicant, Eugenia Makris, sought, pursuant to ss38(6) and (7) of the Magistrates Court Act 1991, a review by this court of a Magistrate’s decision in a minor civil claim.
Ms Makris is the owner of unit number 5, a penthouse, in a residential building in Glenelg North. She and the owners of the other four units in the building are members of the respondent strata corporation (“the Corporation”) which is responsible pursuant to the Strata Titles Act 1988 (“the Act”) for the administration and maintenance of the common property of the building. The Corporation is also entrusted with the responsibility of enforcing its Articles of Association.
Ms Makris owns a dog called Princess Bonny and a cat called Buddy. A second dog, Maverick, belongs to a Mr O’Donohoe, who resides in the penthouse with Ms Makris. All three animals also live in the penthouse. However, the Articles provide that no animals are allowed in the units without the approval of the Corporation. At an extraordinary meeting of the members of the Corporation, on 10 May 2007, a request by Ms Makris to be allowed to keep the animals in the penthouse was considered and refused.
Ms Makris, nevertheless, has retained the animals in the penthouse. The Corporation commenced proceedings in the Magistrates Court, pursuant to s41A of the Act. After a hearing on the merits, the learned Magistrate found that Ms Makris had breached and remained in breach of the Articles. His Honour ordered her to remove all animals from her unit by no later than 31 October 2008.
Section 41A(2) of the Act provides that an action of the type instituted by the Corporation is to be conducted as a minor civil action within the meaning of the Magistrates Court Act. As such, any challenge to the learned Magistrate’s decision lies by way of a review, in this court, of a minor civil action.
Execution of the orders made below was stayed by the learned Magistrate until the earlier of 5pm, Friday, 19 December 2008 or the date of the delivery of judgment on any application for review by this court. I heard Ms Makris’ application for review on 2 December 2008. At the end of the hearing I ordered, by consent, that the learned Magistrate’s orders be stayed until further order.
At the hearing before me (but not at the hearing before the Magistrate) both parties were represented by counsel. Ordinarily, parties to a minor civil action are not entitled to legal representation at either the initial hearing or at the hearing of any application for review.[1] Legal representation will be permitted if all parties consent or if the court is of the view that either or both parties might be at a disadvantage if they were not legally represented. Both parties did consent and I granted leave.
[1] Sub-sections 38(4) and (7) of the Magistrate’s Court Act.
Ms Makris unsuccessfully raised a number of matters by way of defence to the Corporation’s application for orders in the Magistrates Court. Ms Makris also raised a number of grounds of appeal or complaint in her application for review, as filed. However, at the beginning of the hearing before me, counsel for Ms Makris conceded that there was only one basis upon which she sought to challenge the findings and decision below. Ms Makris, in effect, conceded that by keeping the three animals in her unit she was failing to comply with the Articles. However, she maintained that the Corporation, and through it the other unit owner members, is estopped from relying on any lack of express consent and from relying on and enforcing the article prohibiting animals without the consent of the Corporation. To understand the applicant’s argument here some background needs to be set out.
The inaugural meeting of the Corporation was held on 1 June 2000. All five units were represented by their respective owners. Ms Makris was not, at this stage, the owner of unit number 5. At the meeting, the Corporation adopted the standard form of articles provided for by Schedule 3 in the regulations to the Act. Clause 4 of Schedule 3 provides:
Subject to [the Act] a person bound by these articles must not, without the strata corporation’s consent, keep any animal in, or in the vicinity of, a unit.
This then was the default position in the absence of a consent by the Corporation. However, a specific request had been put to the Corporation by the then owners of unit 4 and, in response, the Corporation also passed the following resolution at the inaugural meeting (D14):
POLICIES APPROVALS
ANIMALS:Cats are not permitted, as agreed by all owners present. The owners of unit 4 have a Pembroke Welsh Corgi named Cristal – this is an old dog owned prior to moving into the property and it was agreed that Cristal would be accepted.
Future dogs would only be permitted by unanimous approval from owners, subject to a portfolio of the animal being submitted and that animal being below a weight of 12 kgs.
As a consequence, Mr and Mrs Carey of unit 4 kept the dog, Cristal, in their unit until it died in 2003.
In 2007, Ms Makris purchased unit 5 from its then owners, Mr and Mrs James. The selling agent was a Mr Decelis. In the course of negotiations, according to Ms Makris, Mr Decelis and she had a discussion concerning the keeping of pets. According to Ms Makris, the effect of what Mr Decelis said was that although formal approval to keep dogs was required there would be no problem with getting it. The fact that this discussion occurred and its precise terms are said to be important to Ms Makris’ argument on the review. I will come back to this issue.
At all material times Ms Makris intended to move into unit 5 with Mr O’Donohoe and with their three animals. However, Ms Makris concedes that after this conversation with Mr Decelis and before signing the contract to purchase unit 5, she made no enquiries on the topic of whether or not she could have her dogs in the unit block either from the Corporation or from its then managing agent (Geoff Kurtze Pty Ltd) or from any of the then owners of the other units.
After Ms Makris signed the contract to purchase unit 5 but before settlement, the solicitors she had engaged to do the conveyancing wrote to the Corporation seeking the standard information which a strata corporation is obliged, pursuant to the Act, to provide to a prospective purchaser. The managing agent, on behalf of the Corporation, provided a number of documents in response, including exhibit D12 entitled in bold, block letters and underlined, “Resolutions Affecting Strata Corporation 14378”. Immediately under the title is an underlined, bold, lower case sub-heading, “the following is a summary of policy decisions, special and unanimous resolutions resolved by the Corporation”. The document then purports to provide a summary, in chronological order, of decisions and resolutions made by the Corporation including under the date 1 June 2000[2] “Animals: Cats not permitted”.
[2] That is, the date of the inaugural meeting.
Ms Makris in her evidence said that she took this summary of the resolution to mean that dogs were permitted or, at the least, any necessary approval would be a formality only. Ms Makris made no further enquiries, settled on unit 5 (in about March 2007) and moved in. Subsequently, in April 2007, Mr Makris received first a copy of Schedule 3, which included, of course, clause 4 (above) and second, the full terms of a resolution said to have been passed by the Corporation, to the effect “No dogs without the approval of the Strata Corp or Owners”.[3]
[3] It was agreed by the parties that the form of resolution received by Ms Makris after settlement was not in fact the form of the resolution as passed, that is, D14. Nothing turns on this. It was agreed that both forms of the resolution were to the same effect and that D14 was the “correct” form of the resolution, as passed at the inaugural meeting.
The final factual matter of significance to the proceedings is that, as at February/March 2007 (the time of the alleged infringement) and at all times thereafter, there was no prospect that Ms Makris would obtain approval to keep the two dogs and the cat.
The Applicant’s Argument
Counsel for Ms Makris told the court that two of the matters referred to above were contentious and, in fact, that the learned Magistrate had made findings contrary to Ms Makris’ allegations. He pressed for a reversal of these two findings. The first contested matter concerns the alleged conversation between Ms Makris and Mr Decelis. The learned Magistrate said:[4]
It is my view that it is unlikely that Mr Decelis would have said anything that Ms Makris could have reasonably interpreted as an assurance that approval for Ms Makris to keep pets in her unit would have been forthcoming from the other unit owners. I doubt that Mr Decelis would have said anything beyond informing Ms Makris of the fact that a dog had been kept previously in one of the units for a number of years.
His Honour went on to observe, for a reason I will come to, that, in any event, nothing of significance turns on what Mr Decelis may have said.
[4] Reasons dated 17 September 2008 at [43].
The second contested matter concerns Ms Makris’ assertion as to the way she understood the information in D12, “Animals: Cats not permitted”. The learned Magistrate rejected Ms Makris’ evidence on this topic. His Honour found that it was “based more on distorted reconstruction than accurate recollection”.[5]
[5] Reasons at [55], [57]-[60], [65].
Counsel for Ms Makris acknowledged that without a reversal of these findings (particularly the second one) the application for review must fail. However, it was submitted that if Ms Makris’ evidence were to be accepted on these topics then an estoppel arose on the basis of the following reasoning.
(i)Mr Decelis’ assurance did not bind the Corporation. He was, at all times, the vendor’s agent not the Corporation’s agent. Furthermore, there is no evidence that the Corporation was ever aware of anything he may have said and therefore nothing he said could be the basis for a finding that the Corporation subsequently acted unreasonably oppressively or unjustly.[6] However, Ms Makris maintained that Mr Decelis’ assurance encouraged her to think that there would not be a problem. This assists in explaining her state of mind and in giving credibility to her evidence that she interpreted the summary resolution in D12 in the way she said she did.
(ii)Ms Makris did in fact understand from D12 that whilst cats were not permitted, dogs were or would be.
(iii)The Corporation misrepresented the true position when it supplied, through the managing agent, the materials in D12. Specifically, the Corporation, by telling Ms Makris “Animals: Cats not permitted”, represented that dogs were permitted or that any necessary approval would be a formality.
(iv)Had Ms Makris known the true situation, that is, had she been made aware of the resolution in D14 and that permission to keep her pets would not be forthcoming, she would not have proceeded to settlement of the contract of purchase.
(v)Ms Makris therefore has been induced by the Corporation’s misrepresentation to change her position irretrievably such that it would be unconscionable now to allow the Corporation to depart from the representation in (iii) above.
[6] This was the basis on which the learned Magistrate formed the view that nothing of significance turned on what Mr Decelis may have said.
Consideration and Determination of the Application for Review
I will assume, without deciding, that if the matters outlined in (i) to (v) above were to be established such would give rise, in law, to an estoppel of the type argued for. I also will assume, without deciding, that a strata corporation can, in law, be estopped from enforcing the terms of the Act and the resolutions passed by its members and that the members would be bound by any such estoppel. Nevertheless, Ms Makris’ argument based on estoppel must fail.
Although not expressed in terms of final findings, the learned Magistrate clearly did not accept the evidence of Ms Makris concerning the conversation with Mr Decelis or to the effect that she genuinely believed, following the receipt of D12, that approval to keep her pets would be forthcoming as a matter of course. The learned Magistrate took an unfavourable view of Ms Makris’ reliability and also that of her partner, Mr O’Donohoe.
Ordinarily an appellate court including, in my view, a court of review such as in the present case, will recognise the advantages the tribunal at first instance has in hearing and seeing the witnesses give their evidence. In general, a finding of fact by a trial judge, based on the credibility of a witness, may only be set aside on appeal when incontrovertible facts or uncontested testimony demonstrate that the trial judge’s conclusions are erroneous or where it is concluded that the decision of the trial judge was glaringly improbable or contrary to compelling inferences in the case, see generally Fox v Percy.[7]
[7] (2003) 214 CLR 118.
In this case the learned Magistrate gave reasons for rejecting Ms Makris’ evidence on these issues which included an assessment of her credibility, he having observed and heard her evidence. I have reviewed the transcript of Ms Makris’ and Mr Donohoe’s evidence[8] and counsel’s submissions at the hearing of the review. None of the features identified in the previous paragraph arise on the facts of this case so as to cause me, on review, to come to a different conclusion. As far as the issue concerning Mr Decelis is concerned, it is true that he was not called by either side to give evidence and that if he had given evidence he may have been able to assist with the terms of any conversation he had with Ms Makris. However, I am not persuaded that the circumstances are such that one rather than the other would be expected to have called him.[9] Accordingly, there is no scope for any Jones v Dunkel[10] inference to be drawn against the Corporation.
[8] Including the “evidence” given informally by Ms Makris during the course of the examination of Mr O’Donohoe and at other times during the trial.
[9] See, for example, the discussion of this notion in Payne v Parker [1976] 1 NSWLR 191 at 201-202 per Glass JA.
[10] (1959) 101 CLR 298.
The rejection of Ms Makris’ evidence on these two issues and, in particular, as to her understanding or belief following the receipt of D12, is sufficient to dispose of her application for review in favour of the Corporation. In any event, whatever may have been Ms Makris’ belief after receiving D12, I do not accept that the statement in D12 “Animals: Cats not permitted” clearly and unequivocally conveyed the representation asserted by Ms Makris.
(a)On its face it says something about cats and nothing about other domestic animals including dogs.
(b)It purports to be no more than a “summary” of a resolution passed in June 2000 concerning cats.
(c)The summary, expressly refusing permission for cats, does not by its language necessarily or reasonably imply that other domestic animals, including dogs, are permitted.
I accept that the terms of the summary do not, in fact, accurately represent the actual terms of the resolution passed on 1 June 2000. To this extent there has been a misrepresentation. But it is not this misrepresentation that is, this variation from the original, that Ms Makris says she relied on. Had Ms Makris been advised in D12 of the complete terms of the resolution (D14) she would have been no further advanced; she would have been told that dogs were not permitted. Whilst D12 did not tell her this, neither did it say dogs were permitted. As such she still would have been in a state of uncertainty at best, and should have, acting reasonably, made further enquiries. At all times, Ms Makris was on, at least, constructive notice of the true position through the publicly available articles (Schedule 3, including clause 4). The summary of the resolution in D12 did not expressly or by implication change this state of (constructive) notice.
I agree with the learned Magistrate that she was unwise in not entering into a conditional contract in the first place. She also was unwise and assumed the risk in not making full enquiries about whether her pets would be permitted to stay in the unit block. Even if permission in the past had been a formality – and nothing said or put in writing by or on behalf of the Corporation or its managing agent remotely suggested this – Ms Makris acted quite unreasonably in not obtaining a satisfactory assurance from the Corporation before proceeding to settlement, let alone entering into an unconditional contract to purchase. In other words, even if (contrary to my findings) D12 did comprise a relevant representation and Ms Makris had relied on it, Ms Makris, in my view, would have acted quite unreasonably, in all the circumstances, in doing so. As such it would not be unconscionable to allow the Corporation to depart from the representation.
There is a further reason why the application for review must fail. There is insufficient evidence to persuade me on a balance of probabilities that had Ms Makris been provided with the complete terms of the resolution in D14 she would have refused to complete the purchase of unit 5. Whilst there is little, if any, evidence either way on this issue, given Ms Makris’ behaviour generally throughout, it strikes me as quite unlikely that she would have gone into breach of contract and refused to settle on a very valuable unit had she known the true position. As I have said, there is insufficient evidence to enable any positive finding to be made here. However, it follows that Ms Makris (on whom the onus rests) has failed to establish sufficient detrimental reliance, by way of change of position, on her asserted understanding of D12.
For these reasons the applicant’s submission that the Corporation should be estopped from relying on the resolution in D14 is rejected. This was the only basis on which the learned Magistrate’s determination was challenged on review. Accordingly, the application for review is dismissed and the judgment of the Magistrate below will stand. I will hear the parties on the issue of costs and as to the discharge of my order made on 2 December 2008 staying the orders of the learned Magistrate.
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