Moussa v Owners Corporation of Strata Plan 65404
[2007] NSWLEC 807
•20 December 2007
Land and Environment Court
of New South Wales
CITATION: Moussa v Owners Corporation of Strata Plan 65404 & Ors [2007] NSWLEC 807 PARTIES: APPLICANT
Wasfy MoussaFIRST RESPONDENT
Owners Corporation of Strata Plan 65404SECOND RESPONDENT
Len & Veronica HenwoodTHIRD RESPONDENT
Richard & Annalese NyzFOURTH RESPONDENT
John & Anne TeychenneFIFTH RESPONDENT
SIXTH RESPONDENT
Lorraine & Stephen Jones
Peter & Robyn StockFILE NUMBER(S): 20096 of 2007; 40097 of 2007 CORAM: Jagot J KEY ISSUES: Injunctions and Declarations :- whether strata development contract valid when registered - additional land - development lot - developer not owner of development lot when contract registered - adequacy of concept plans; whether strata development contract enforceable - estoppel, election and waiver; whether time for conclusion of development scheme should be extended; whether strata development contract should be amended - applications dismissed LEGISLATION CITED: Environmental Planning and Assessment Act 1979
Environmental Planning and Assessment Amendment Act 2006
Land and Environment Court Act 1979
Real Property Act 1900
Strata Schemes (Freehold Development) Act 1973
Strata Schemes Legislation Amendment Act 2001
Strata Schemes Management Act 1996
Strata Schemes (Freehold Development) Regulation 1997CASES CITED: Byrne v Australian Airlines Ltd (1995) 185 CLR 410;
Hawkins v Clayton (1988) 164 CLR 539;
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24;
Owners Strata Plan No 50411 v Cameron North Sydney Investments Pty Ltd [2003] NSWCA 5 ;
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355;
Sargent v ASL Developments Ltd (1974) 131 CLR 634;
Smith v Wyong Shire Council (2003) 132 LGERA 148DATES OF HEARING: 5-8 November 2007, leave to reopen granted and further submissions - 19 December 2007
DATE OF JUDGMENT:
20 December 2007LEGAL REPRESENTATIVES: APPLICANT
Mr Justin Doyle
SOLICITORS
Thomson PlayfordRESPONDENTS
Mr Francis G Kalyk
SOLICITORS
Redmond Hale Simpson
JUDGMENT:
THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALESJagot J
20 December 2007
20096 of 2007
40097 of 2007WASFY MOUSSA
ApplicantOWNERS CORPORATION OF STRATA PLAN 65404
First RespondentLEN & VERONICA HENWOOD
Second RespondentRICHARD & ANNALESE NYZ
Third RespondentJOHN & ANNE TEYCHENNE
Fourth RespondentLORRAINE & STEPHEN JONES
Fifth RespondentJUDGMENTPETER & ROBYN STOCK
Sixth Respondent
Jagot J:
A. Introduction
1 These proceedings concern a strata development contract under the Strata Schemes (Freehold Development) Act 1973 (the Strata Schemes Act). The applicant is the developer under the strata development contract. The respondents are the Owners Corporation of Strata Plan 65404 (the owners corporation) and the proprietors of the lots in that strata plan (together, the respondents) who are deemed to be parties to the strata development contract. Strata plan 65404 relates to land at 35 – 37 Solander Street, Monterey. By the proceedings the applicant sought to extend the term of (and if necessary amend) and to enforce the strata development contract to enable certain development on the adjoining land known as 33 Solander Street to be carried out. The Strata Schemes Act identifies such development as a development scheme.
2 The competing cases of the applicant and the respondents raised many issues about the operation of the Strata Schemes Act, the terms of the strata development contract, and the conduct of the parties over the past six or so years. The issues were complicated by a lack of focus on the form of the Strata Schemes Act as in force when the strata development contract was made (at least in the written submissions and partly during the hearing), a changing factual context (including the applicant completing a contract to purchase 33 Solander Street during the hearing and an application for leave to re-open the hearing to tender an order of this Court modifying a development consent), and the discursive nature of the submissions on behalf of both parties. Recognising these matters, I have identified the principal issues for resolution that emerged by the final submissions.
3 The following issues require resolution in proceedings No 20096 of 2007:
(2) Should the Court approve an amendment of the strata development contract to “address inconsistency between the ‘concept plan’ referred to at Clause 8 of that contract, and the plan for which development consent was granted by the Land and Environment Court in proceedings No 10129 of 2006” under s 28K of the Strata Schemes Act? Proceedings No 10129 of 2006 involved an appeal by the applicant’s architect against Rockdale City Council for refusal of development consent to a development application relating to 33 Solander Street. The consent granted by the Court in those proceedings on 3 July 2006 was subsequently modified on 12 December 2007 (resulting in the applicant’s notice of motion for leave to re-open to tender the Court’s order modifying the consent).(1) Should the Court defer the time for conclusion of the development scheme until December 2008, being a date later than that on which the strata development contract would otherwise require the development scheme to be concluded (namely, December 2007) under s 28QA of the Strata Schemes Act?
4 The following issues require resolution in proceedings No 40097 of 2007.
(1) Was the strata development contract invalid and unenforceable at the time it was made by reason of:
· the development scheme relating to 33 Solander Street, but 33 Solander Street not being identified as a development lot in the strata development contract (or being able to be so identified given that the applicant did not own that land when the strata development contract was registered);
· any omission from the strata development contract with respect to the identification of 33 Solander Street as a development lot or common property after the addition of that land to the parcel comprised by 35 – 37 Solander Street; and/or
· any inadequacy in the concept plans annexed to the strata development contract?
(2) If not, did the strata development contract become unenforceable subsequently (including by reason of the doctrines of waiver, election and/or estoppel) having regard to:
· any failure by the applicant to comply with implied terms in the strata development contract asserted by the respondents (and denied by the applicant), namely, that: - (i) the authorised proposals under the strata development contract would be carried out in accordance with a development consent granted in 2000 that the applicant permitted to lapse, (ii) the applicant would complete the authorised proposals with reasonable expedition, and (iii) the applicant would complete the development at 35 – 37 Solander Street in accordance with a development consent granted in 1998; and/or
· the applicant’s conduct in: - (i) allegedly representing when the units developed at 35 – 37 Solander Street were sold that the stage 2 development at 33 Solander Street might not proceed, (ii) permitting the development consent granted in 2000 to lapse, (iii) applying to have the apportionment of strata levies re-allocated on the basis that the development at 33 Solander Street might not proceed, (iv) adopting a position in proceedings No 10129 of 2006 in which no development consent was sought to develop any part of 35 – 37 Solander Street (and thus no such consent was obtained), (v) not proceeding with any authorised proposals under the strata development contract with (what the respondents described as) reasonable expedition, and (vi) allegedly otherwise not dealing fairly and reasonably with the respondents?
(3) If the strata development contract is valid and enforceable, what are the rights and obligations of the parties under the strata development contract, particularly with respect to any right of the applicant to:
· use the common property on 35 – 37 Solander Street for construction access to 33 Solander Street;
· carry out development on the common property on 35 – 37 Solander Street, including by way of different arrangements for visitor car parking, and garage facilities for proposed unit 6 on 33 Solander Street, and landscaping;
· require the respondents to grant owner’s consent to a development application to facilitate these different arrangements; and
· require the respondents to permit registration of such plans as necessary to enable 33 Solander Street to be added to strata plan 65404?
(4) Is this an appropriate case for the making of declarations as sought by the applicant in all the circumstances? The circumstances relied on by the respondents (and denied by the applicant) included:
· the alleged conduct of the applicant referred to above;
· an allegation that the applicant’s capacity to proceed with the development of 33 Solander Street as authorised proposals under the strata development contract depended on numerous unresolved issues (including obtaining development consent for the altered arrangements on 35 – 37 Solander Street, obtaining a construction certificate for the development of 33 Solander Street, adding 33 Solander Street to strata plan 65404 by registration of the required plan, and obtaining the approval of the Council to the amendment of the strata development contract);
· an asserted lack of any justiciable dispute between the applicant and the respondents about any existing and specific matter; and
· the form of the declarations and orders sought that were said to be inadequate and inappropriate to resolve any such dispute.
5 Proceedings No 40097 of 2007 also raised a subsidiary issue whether the applicant, as owner of development lot 6 in strata plan 65404, was bound to pay any contribution to common property expenses unless and until that lot is developed.
6 As explained below, if the time for completion of the development scheme is not extended as sought by the applicant in proceedings No 20096 of 2007 the balance of the issues are hypothetical. It is common ground that the works in accordance with the strata development contract (whatever their scope or the rights and obligations of the parties relating thereto) cannot be completed by the required date of 31 December 2007 (and, in fact, have not yet been commenced).
B. The statutory scheme
7 The strata development contract was registered on 14 May 2001. The Strata Schemes Legislation Amendment Act 2001 (the 2001 amending Act) materially amended the Strata Schemes Act from 1 June 2001. However, cl 4 of Pt 5 to Sch 4 of the Strata Schemes Act provides that the amendments made to that Act by the 2001 amending Act do not apply to a strata development contract registered before the commencement of cl 4 (that is, 1 June 2001). Accordingly, it is necessary to resolve the issues in dispute with respect to the strata development contract by reference to the Strata Schemes Act as in force in May 2001. All references below are to the Strata Schemes Act as in force in May 2001 unless otherwise identified.
8 The Strata Schemes Act is to be read and construed with the Real Property Act 1900 as if it formed part of that Act (s 6(1) of the Strata Schemes Act). The provisions of the Real Property Act apply to lots and common property in the same way as they apply to other land except insofar as any provision of the Real Property Act is inconsistent with the Strata Schemes Act or incapable of applying to lots or common property (s 6(2)).
9 Div 1 of Pt 2 of the Strata Schemes Act concerns land in strata schemes. A strata scheme is a reference to the manner of division of a parcel into lots or lots and common property, the manner of allocation of unit entitlements among the lots under the Strata Schemes Act, and the rights and obligations of proprietors, other persons having proprietary interests in or occupying the lots and the body corporate “as conferred or imposed by this Act or by anything done under the authority of this Act and as in force from time to time” (s 5(1) of the Strata Schemes Act).
10 A “parcel” means: - (a) except as provided in paragraph (b), the land from time to time comprising the lots and common property the subject of a strata scheme, and (b) in relation to a plan lodged for registration as a strata plan, the land comprised in that plan. “Lot” is also defined (by reference to cubic space), as is “common property” (by exclusion, being so much of a parcel as from time to time is not comprised in any lot). A “body corporate” is an owners corporation as constituted under s 11 of the Strata Schemes Management Act 1996.
11 Div 1 of Pt 2 regulates the registration of strata plans (s 8). Under s 8(5) a plan intended to be registered as a strata plan that creates a development lot (subject to immaterial exceptions) must be accompanied by: - (a) a copy of the relevant strata development contract, and (b) the certificate of the consent authority provided under s 28B(2). A “development lot” means a lot in a strata plan (not being a stratum parcel) that is identified by a strata development contract as a lot that is to be the subject of a strata plan of subdivision under the development scheme (s 5(1)). A “strata development contract” means a strata development contract, as in force for the time being, registered under Div 2A of Pt 2. The “development scheme” means the scheme of development provided for, and represented by, a strata development contract.
12 The subdivision of development lots is regulated by s 8A. Under that section a development lot may be subdivided into lots or lots and common property by registration of a strata plan of subdivision in accordance with the requirements of that section. The subdivision of lots and common property not being development lots is regulated by ss 9 to 11. Under s 12 two or more lots may be consolidated into one lot by registration of a plan as a strata plan of consolidation. Under s 16 the Registrar-General shall not register as a strata plan, a strata plan of subdivision or a strata plan of consolidation unless the registered proprietor of the land comprised in the plan and others as nominated sign the plan.
13 Div 2 of Pt 2 concerns common property. Under s 18(1) common property shown on a strata plan vests in the body corporate on registration of the plan. Section 19(2) enables a body corporate by unanimous resolution to accept a transfer of land (not being a lot within a parcel) which is contiguous to the parcel in certain circumstances for the purpose of creating, or creating additional, common property. Upon so doing a body corporate must forthwith register the transaction under the Real Property Act. By s 20 a body corporate holds common property as an agent for the proprietors. Section 21 provides that common property may only be dealt with in accordance with the provisions of the Strata Schemes Act.
14 Div 2A of Pt 2 concerns staged development. Section 28A explains staged development as follows:
(2) The development contemplated consists of:(1) The purpose of this Division is to facilitate the development in stages of a parcel that is subject to a strata scheme.
· the progressive improvement of the parcel by the construction of buildings or the carrying out of works (or both) on a lot or lots reserved for future development (development lots), and
· the subsequent subdivision under this Act of each such lot and the consequential adjustment of unit entitlements within the scheme.(4) The staged development of a parcel will be carried out subject to a strata development contract that describes separately:
(3) Development lots may be situated wholly or partly above, below or alongside the building to which the strata scheme initially relates, but must be identified as such in the strata plan for the scheme when that plan is registered.
(5) This Division is not intended to prevent the development of a parcel otherwise than in accordance with this Division.
Warranted development and authorised proposals are referred to as permitted development because the body corporate for the strata scheme and other persons having estates or interests in lots included in the parcel must allow it to be carried out in accordance with the contract.(a) any proposed development that the developer for the development lot concerned warrants will be carried out and may be compelled to carry out (warranted development), and
(b) any other proposed development that the developer will be authorised but cannot be compelled to carry out (authorised proposals).
15 Section 28B imposes obligations on consent authorities when granting consent to subdivide land by a strata plan at the same time as granting consent to the subsequent subdivision of a lot in that plan by a strata plan of subdivision (see also s 8(5) referred to above). Section 28B provides as follows:
(1) A consent authority must not, at the same time, grant development consent for the subdivision of land by a strata plan and the subsequent subdivision of a lot in that plan by a strata plan of subdivision unless:
(a) the lot intended to be subdivided is identified in the proposed strata plan as a development lot, and
(b) the development application is accompanied by a proposed strata development contract.
(2) When a consent authority grants such a consent, it must certify in the approved form that carrying out the permitted development would not contravene:
(a) any condition subject to which the consent was granted, or
(b) the provisions of any environmental planning instrument that were in force when the consent was granted, except to the extent (if any) specified in the certificate.
(3) A development consent that purports to have been granted in contravention of this section is invalid.
16 Section 28C regulates the form and content of a strata development contract.
(2) A strata development contract must include a concept plan and a description:(1) A strata development contract and any amendment of such a contract must be in the approved form.
(a) of the land comprising the parcel, identifying separately the development lot or lots to which it relates, and
(b) of any land proposed to be added to that parcel at a later time, and
(c) of so much (if any) of the proposed development as the developer is permitted by the contract to carry out and may be compelled to carry out (identified in the contract as "warranted development - proposed development subject to a warranty"), and
(d) of so much (if any) of the proposed development as the developer is permitted by the contract to carry out but cannot, merely because it is described in the contract, be compelled to carry out (identified in the contract as "authorised proposals - proposed development not subject to a warranty").(4) A strata development contract cannot provide for the subdivision of common property without the consent, by special resolution, of the body corporate.
(3) A strata development contract must include such other documents, particulars and information as may be required by the regulations.
17 The Strata Schemes (Freehold Development) Regulation 1997 as in force in May 2001 required a strata development contract to include the covenants set out in Sch 1BA to the Strata Schemes Act (cl 14(1)) and the description referred to in s 28C(2)(c) of the Act to deal separately with nominated matters (cl 14(2)) including “details of access and construction zones and accompanying rights over common property and development lots” (cl 14(2)(d)) and “the manner in which it is proposed to landscape the parcel” (cl 14(2)(e)).
18 Under s 28D the sites proposed for and the nature of the buildings and works that would result from the carrying out of all permitted and warranted development under the strata development contract must be illustrated in the concept plan. The Registrar-General may refuse to register an amendment of a strata development contract if it does not include a revised concept plan so that s 28D will be complied with after the amendment has been registered.
19 Section 28E allows for a strata development contract to vary liability for expenses relating to the use or maintenance of the common property of the strata scheme pending completion of the development scheme despite the schedule of unit entitlements which would otherwise regulate such liability.
20 Section 28F concerns the signing of a strata development contract and any amendment. It provides that:
(1) The Registrar-General may register a strata development contract relating to a development lot in a strata plan or an amendment of such a contract only if the contract or amendment is signed by:
(a) the developer for the development lot, and
(b) each registered mortgagee, chargee, covenant chargee and lessee of the development lot, and
(c) each registered mortgagee and chargee of a lease of the development lot.
(2) A strata development contract must be accompanied by the certificate (if any) required to be given by section 28B (Obligations of consent authorities).(4) Nothing prevents the same person from being more than one of the parties to a strata development contract.(3) …
21 Section 28G regulates the registration of a strata development contract and any amendments. Under s 28G(3) the Registrar-General must refuse to register a strata development contract or any amendment of such a contract that contravenes any requirement of Div 2A of Pt 2.
22 Section 28I specifies the effect of a strata development contract as follows:
(1) A strata development contract relating to a strata scheme has effect as an agreement under seal containing the covenants specified in Schedule 1BA entered into by the body corporate and each person who for the time being is:
(a) the developer concerned, or
(b) a proprietor of a lot (other than that developer), or
(c) a registered or enrolled mortgagee, chargee, covenant chargee or lessee, or an occupier, of a lot.
(2) The contract ceases to have effect:
(a) in relation to a person described in subsection (1) (a), (b) or (c), on that person ceasing to be a person so described, and
(b) in relation to all of the persons described in subsection (1), when the development scheme to which the contract relates is concluded.
This subsection does not affect any obligation that was incurred by person, or any right that accrued to a person, under the contract before it ceased to have effect in relation to the person.(3) A strata development contract does not permit development to be carried out in contravention of this or any other Act or any other law.
…(6) A provision in any other contract or instrument under which a strata development contract is excluded, modified or restricted is void.
(8) Nothing in this section affects any right or remedy a person may have apart from a right or remedy under a strata development contract, with the exception that Part 5 does not apply to matters arising under any such contract.(7) A covenant entered into under a strata development contract does not merge on transfer of a lot.
23 Section 28J concerns amendments to a strata development contract by a “developer” (defined in s 5(1) as, in relation to a strata scheme constituted upon registration of a strata plan proposed under a development scheme, the person who for the time being is the original proprietor or a proprietor of a development lot within the strata plan). The applicant sought to amend the strata development contract in proceedings No 20096 of 2007 insofar as might be necessary to enable the applicant to carry out certain works. Section 28J is as follows:
(1) A strata development contract may be amended by the developer, but any such amendment has effect only if:
(a) this section has been complied with in relation to the amendment, and
(b) the amendment is registered.
(2) A proposed amendment that involves a change in the basic architectural or landscaping design of the development, or in its essence or theme, may be made only if it is:
(a) approved by the consent authority (if any), and
(b) except where the developer is the only proprietor of lots in the strata scheme concerned, supported by a unanimous resolution of the body corporate of the strata scheme concerned.
(3) An amendment proposed in order to give effect to a change in the law or a change in the requirements of a consent authority (but that does not involve a change in the basic architectural or landscaping design of the development, or in its essence or theme) may be made only if it is:
(a) approved by the consent authority (if any), and
(b) notified to:· the body corporate of the strata scheme concerned, and
· the proprietor of each lot in that scheme (other than the developer), and
· each registered or enrolled mortgagee, chargee, covenant chargee and lessee of a lot in that scheme.
(4) Any other proposed amendment that would require a change in the terms of a development consent may be made only if it is:
(a) approved by the consent authority, and
(b) supported by a special resolution of the body corporate of the strata scheme concerned.
(5) Any other proposed amendment that would not require a change in the terms of a development consent may be made only if:
(a) it is supported by an ordinary resolution of the body corporate of the strata scheme concerned, and
(b) the application for registration, or the contract as intended to be amended, is accompanied by a certificate, given in the approved form by the consent authority (if any), to the effect that a change in the terms of any development consent is not required.
(6) A consent authority that approves an amendment of a strata development contract must provide the applicant for the approval with a copy of the instruments, plans and drawings that describe and illustrate the amendment and a certificate in the approved form to the effect:
(a) that the copy describes and illustrates the approved amendment, and
(b) that the contract, if amended as approved by the authority, would not be inconsistent with any related development consent.
24 Section 28K concerns the powers of this Court that the applicant sought to invoke in proceedings No 20069 of 2007.
(2) Such an approval may be given only if the Court is satisfied:(1) An amendment of a strata development contract is not required to be supported by a resolution of a body corporate if the amendment is approved by the Land and Environment Court.
- (a) that a motion supporting the amendment has been defeated, or
(b) that the notice of intention to move such a motion has been given but a meeting to consider the motion has not been held within a reasonable time after the giving of the notice, or
(c) that the consent to the amendment of a mortgagee, chargee or covenant chargee or of a lessee has been sought but has been refused.
(3) An application for such an approval must be served on:
- (a) the consent authority, and
(b) the body corporate, and
(c) each person (other than the applicant) who is the proprietor of a development lot, and
(d) each registered or enrolled mortgagee, chargee, covenant chargee and lessee of a lot in the strata scheme concerned
(4) Each person entitled to be served with notice of the application is entitled to appear and be heard in proceedings relating to the application.
25 Section 28L(1) provides that, when carrying out permitted development under a strata development contract, a developer is entitled to use any common property or development lot to which the contract relates: - (a) to the extent necessary to carry out the development, or (b) to such other extent as may be specified in the contract, which may confer on the developer an exclusive (or any lesser) right to occupy specified common property.
26 Section 28M is important to the arguments of the parties about the validity of the strata development contract and, if valid, the rights and obligations of the parties created by the contract. It provides that:
(2) A strata plan of subdivision that adds land may be registered only if:(1) Land may be added to a parcel containing a development lot by registration of a strata plan of subdivision in accordance with the regulations.
(a) the land consisting of the former parcel and the additional land could be the subject of a strata plan had the land in the former parcel not already been subdivided under this Act, and
(b) the strata development contract, as in force when the strata plan of subdivision is registered, provides for the land to be added to the parcel and states whether, on its being added to the parcel, the land will become common property, a further development lot or an addition to an existing development lot, or any specified combination of them, and
(c) a plan showing as a single lot the additional land and the former parcel has been lodged in the office of the Registrar-General for registration under the Conveyancing Act 1919.
(3) On registration of such a strata plan of subdivision, the land becomes common property, a further development lot or an addition to an existing development lot, or any specified combination of them, as provided by the strata development contract.
27 Section 28N vests certain rights in a developer with respect to “development concerns” in the following terms:
(1) The vote of a developer who is permitted to carry out development because it is included in a strata development contract is sufficient to pass or defeat a motion included in the notice for a meeting of the body corporate or of the council of the body corporate if the passing or defeat of the motion would have the effect of making a decision about a development concern.
(2) It is not necessary for a decision about a development concern to be supported by a special or unanimous resolution of a body corporate, despite any other provision of this Act.
(4) The regulations may impose requirements for the execution of dealings, plans and other instruments by bodies corporate and developers and may require verification by statutory declaration of the circumstances in which they were executed.(3) A dealing, plan or other instrument may be executed either by the body corporate or by a developer on behalf of the body corporate for the purpose of giving effect to a decision about a development concern.
28 Development concerns are identified in s 28O.
(1) The following are development concerns for the purposes of this Division:
(a) erecting structures, carrying out works or . effecting other improvements in accordance with the strata development contract,
(b) creating easements, dedicating land, making by-laws or entering into covenants or management or other agreements in accordance with that contract,
(c) creating or using common property in accordance with that contract,
(d) creating or using a development lot in accordance with that contract,
(e) using water, sewerage, drainage, gas, electricity, oil, garbage, conditioned air, telephone or other services available to the parcel, or installing additional services, in accordance with that contract,
(f) providing and using means of access or egress to or from a development lot, or to or from the common property, in accordance with that contract,
(g) subdivision of a development lot, or excising a development lot from the parcel, in accordance with that contract,
(h) carrying out any other development that is permitted to be carried out because it is included in that contract.
(2) The following are not development concerns for the purposes of this Division:
(a) subdivision of common property that has been created by a registered plan,
(b) amendment of a strata development contract, regardless of whether the subject-matter involved is, or relates to, a development concern.
29 Section 28P sets out consequential provisions about dealing with development concerns at meetings of the body corporate.
30 Section 28Q regulates the conclusion of a development scheme and, hence, the term of a strata development contract. It sets the context for the relief the applicant sought in proceedings No 20096 of 2007 to extend the time for conclusion of the development scheme until December 2008 (when the contract sets a completion date of December 2007). The section, in part, is as follows:
(1) For the purposes of this Division, a development scheme to which a strata development contract relates is concluded when any of the following occurs:
(a) any development consent required for carrying out the scheme is revoked,
(b) a strata plan of subdivision is registered which subdivides the last remaining unsubdivided development lot to which the contract relates or subdivides the residue of that development lot after excision of part of that lot in accordance with the contract,
(c) the time predicted by the contract for conclusion of the development scheme arrives,
(d) a notice in the approved form, signed in accordance with subsection (3) and stating that the development scheme to which the contract relates has concluded, is registered by the Registrar-General,
(e) the development scheme is concluded under section 28QA by an order of the Land and Environment Court,
(f) the strata scheme concerned is terminated under Part 3 by an order of the Supreme Court.
(2) A strata development contract must predict a time, being no later than the tenth anniversary of the day on which the contract was registered, as the time for conclusion of the development scheme to which it relates.
31 Section 28QA vests powers in this Court with respect to the conclusion of a development scheme. The applicant sought to invoke that power in proceedings No 20069 of 2007.
(1) On application made to it by any person bound by a strata development contract, the Land and Environment Court may, by its order, do either or both of the following:
(a) defer (either generally or to a specified time) the time at which a development scheme would otherwise be concluded,
(b) fix a time for the conclusion of a development scheme, whether it is an earlier or a later time than it would otherwise be.
(2) Notice of such an application is to be served, in accordance with rules of court, on:
(a) the developer concerned, and
(b) each proprietor, and each registered or enrolled mortgagee, chargee, covenant chargee and lessee, of a lot, and
(c) the body corporate, and
(d) the consent authority (if any) that granted the relevant development consent, and
(e) the Registrar-General, and
(f) such other persons (if any) as the Land and Environment Court may direct.
(4) An order under this section may:( 3) Each person entitled to be served with notice of the application is entitled to appear and be heard in proceedings relating to the application.
(a) contain such provisions relating to the strata scheme as are, in the opinion of the Land and Environment Court, necessary because of the conclusion of the development scheme, and
(b) require the payment of money to or by the body corporate or the proprietors of lots to any one or more of them in addition to or instead of, any award of damages in the exercise of the jurisdiction conferred by section 20 (2) (d) of the Land and Environment Court Act 1979, and
(c) contain such other provisions and make such other requirements as, in the opinion of the Land and Environment Court, are just and equitable in the circumstances of the case.
(5) The Land and Environment Court may, from time to time, vary an order under this section on the application of any person entitled to apply for such an order.
32 Sections 28QB to 28QH concern legal assistance from the Director-General of the Department of Fair Trading to a body corporate or a proprietor of a lot (other than the developer concerned) about bringing or defending proceedings in this Court relating to a strata development contract.
33 By s 18(f) of the Land and Environment Court Act 1979 (the Court Act) proceedings under s 28K and s 28QA of the Strata Schemes Act are assigned to Class 2 of the Court’s jurisdiction. Hence, ss 38 and 39 of the Court apply, including the following provisions:
38
(1) Proceedings in Class 1, 2 or 3 of the Court’s jurisdiction shall be conducted with as little formality and technicality, and with as much expedition, as the requirements of this Act and of every other relevant enactment and as the proper consideration of the matters before the Court permit.
(2) In proceedings in Class 1, 2 or 3 of the Court’s jurisdiction, the Court is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate and as the proper consideration of the matters before the Court permits.
39
(1) In this section, appeal means an appeal, objection, reference or other matter which may be disposed of by the Court in proceedings in Class 1, 2 or 3 of its jurisdiction.
(2) In addition to any other functions and discretions that the Court has apart from this subsection, the Court shall, for the purposes of hearing and disposing of an appeal, have all the functions and discretions which the person or body whose decision is the subject of the appeal had in respect of the matter the subject of the appeal.
(3) An appeal in respect of such a decision shall be by way of rehearing, and fresh evidence or evidence in addition to, or in substitution for, the evidence given on the making of the decision may be given on the appeal.
(4) In making its decision in respect of an appeal, the Court shall have regard to this or any other relevant Act, any instrument made under any such Act, the circumstances of the case and the public interest.(7) The functions of the Court under this section are in addition to and not in derogation from any other functions of the Court.(5) The decision of the Court upon an appeal shall, for the purposes of this or any other Act or instrument, be deemed, where appropriate, to be the final decision of the person or body whose decision is the subject of the appeal and shall be given effect to accordingly.
…
34 Under s 20(2) of the Court Act the Court has the same civil jurisdiction as the Supreme Court (but for s 71) would have to hear and dispose of proceedings:
- (a) to enforce any right, obligation or duty conferred or imposed by a planning or environmental law or a development contract,
(b) to review, or command, the exercise of a function conferred or imposed by a planning or environmental law or a development contract,
(c) to make declarations of right in relation to any such right, obligation or duty or the exercise of any such function, and
(d) whether or not as provided by section 68 of the Supreme Court Act 1970—to award damages for a breach of a development contract.
35 Section 20(5) of the Court Act includes within the definition of “development contract” a strata development contract under s 28I of the Strata Schemes Act.
36 The parties could not identify any previous decisions of this Court relating to the amendment of a strata development contract (ss 28J and 28K), the extension of the time for completion of a strata development scheme (ss 28Q and 28QA) or to enforce any right or obligation imposed by a strata development contract under s 20(2) of the Court Act.
37 The proceedings were heard sequentially. All evidence in proceedings 40097 of 2007 was admitted in proceedings 20096 of 2007. Some additional evidence was also admitted in proceedings 20096 of 2007.
C. Facts
General
38 While the essential facts were extensive, they were mostly not in dispute.
39 In 1985 the applicant bought the property known as 37 Solander Street, Monterey. This property was developed with a single dwelling house. In 1998 the applicant bought the adjoining property known as 35 Solander Street, which was also developed with a single dwelling house. Together these properties were of sufficient size to accommodate the townhouse development the applicant wished to carry out.
40 In June 1998 the applicant lodged a development application with Rockdale City Council to demolish the two dwelling houses and erect a townhouse development of five villa home units on 35 - 37 Solander Street. 35 - 37 Solander Street is also known as lot E in deposited plan 10009 and lot B in deposited plan 320970. The Council granted development consent to that application on 23 November 1998 (DA 197/98), subject to conditions. The conditions included a requirement that the development be commenced within two years, failing which the consent would lapse (condition 1). Conditions 5 and 7 required a total of 10 parking spaces on site with nine for occupants and one for visitor parking to remain as common property. Condition 13 required one of the units to be capable of being adapted for use by a disabled person in accordance with the Council’s Development Control Plan No 28. The approved plans showed a driveway along the western boundary providing access into the units. The single approved visitor car space was located at the end of the driveway opposite unit 5.
41 On 12 February 1999 the applicant obtained building approval for this development subject to conditions (including a condition that the building approval would lapse if not substantially commenced within two years). At about this time it occurred to the applicant that the adjoining property to the west (33 Solander Street, also developed with a single dwelling house) could be redeveloped with townhouses using the driveway along the common boundary.
42 33 Solander Street is known as lot D in DP 10009. People who are not parties to these proceedings owned 33 Solander Street at all times before 25 May 2007. On 25 May 2007 these people entered into a contract to sell 33 Solander Street to the applicant. The contract was completed on 6 November 2007 (the second day of the hearing).
43 In 2000, the applicant spoke to the owners of 33 Solander Street about the possibility of a townhouse development on 33 Solander Street and the purchase of their property after obtaining development consent. On 23 August 2000 the applicant’s architect lodged a development application with the Council identifying the land to be developed as 33 – 37 Solander Street, Monterey. The applicant signed this development application as the owner of 35 – 37 Solander Street and the owners of 33 Solander Street signed as the owners of that property. By this stage the development of 35 – 37 Solander Street was nearly complete. The statement of environmental effects accompanying this development application described that development as “stage 1”. It described “stage 2” as involving the construction of four villa home units on 33 Solander Street. I refer to the development of 33 Solander Street as stage 2 on occasions below.
44 The Council granted development consent to this application on 30 November 2000 (DA 172/01), subject to conditions. The approved plans under this 2000 development consent show an expanded driveway from Solander Street servicing both 35 – 37 (described as stage 1) and 33 Solander Street (described as stage 2). Three units on 33 Solander Street are depicted as obtaining access from this expanded driveway. One unit (being unit 6 nearest to the street frontage) is shown as a disabled unit with access via a separate driveway off Solander Street to a disabled carport. The approved plans also show three car spaces for visitors. In addition to the space at the rear (approved under the 1998 development consent), the 2000 development consent required another space at the rear on 35 – 37 Solander Street and one at the front of the driveway near the street and opposite unit 1.
45 The 2000 consent was granted on a deferred commencement basis. The consent was not to operate until submission of an amended landscaping plan in accordance with the Council’s Landscape Design Code. Under condition 1 the consent would lapse within two years if not commenced within that period. Condition 14 required consolidation of the lots to which the development consent related. Condition 29 required the visitor parking spaces to remain as common property. Under condition 30 reciprocal rights of carriageway were to be provided to enable manoeuvring into and out of the garages.
46 On 8 December 2000 the Council approved a modification of the 1998 consent relating to 35 – 37 Solander Street. The modification involved an additional condition (condition 27) requiring reciprocal rights of carriageway in the same terms as condition 30 of the 2000 consent.
47 On 18 January 2001 the Council notified the applicant’s architect of approval of the amended landscape plan required to satisfy the deferred commencement condition of the 2000 consent. The 2000 consent would thus lapse on 18 January 2003 unless either the development was commenced within that period in accordance with s 95(4) of the Environmental Planning and Assessment Act 1979 (the EPA Act) or the consent was extended by the Council. Under s 95A of the EPA Act the Council could extend the consent for a period of one year where it had reduced the period after which the consent lapses to less than five years (as the Council had done for the 2000 consent).
48 On or about 29 January 2001 the applicant’s surveyor lodged a development application for the strata subdivision of 35 – 37 Solander Street. The Council granted development consent to this application on 19 February 2001 (DA 538/01), subject to conditions. Condition 1 provided that the consent would lapse within two years unless the development was commenced within that period. Condition 2 required that the development (that is, the strata subdivision of 35 – 37 Solander Street) be carried out in accordance with a surveyor’s plans reference 7184 and documents received by the Council on 20 January and 19 February 2001. Condition 4 required the subdivision to be carried out in accordance with development consent 197/98 (that is, the 1998 consent applying to 35 – 37 Solander Street).
49 The Council later certified that certain plans were consistent with this consent for the purpose of registration. These plans show 35 – 37 Solander Street subdivided into five lots, common property and a development lot (known as lot 6). The development lot is a strip of land slightly under 1m wide along the western boundary of 35 – 37 Solander Street adjoining the common boundary with 33 Solander Street. The plans show one car parking space for visitors at the rear of the driveway opposite unit 5. The letter of 29 January 2001 referred to in condition 2 is from the applicant’s surveyor to the Council stating that the strata plan shows one visitor parking space, with the remaining spaces shown on the plans prepared for “stage two” (referring to pages 7 to 9 in the strata development contract). Stage 2 is a reference to the development proposed for 33 Solander Street, owned by persons other than the applicant. Those owners had no proprietary rights in respect of 35 – 37 Solander Street and, hence, had no involvement in the development application for strata subdivision of that property. Pages 7 to 9 of the strata development contract show two visitor car spaces at the rear of the driveway and another on the driveway near the front of the property opposite unit 1.
50 The strata development contract commences with a warning as follows:
This contract contains details of a strata scheme which is proposed to be developed in 2 stages on the land described in it.
The developer is only bound to complete so much of the proposed development as is identified as “warranted development’ in this contract. However the developer cannot be prevented from completing the balance of the proposed development identified as “authorised proposals” in this contract.
…
During development of a further stage there may be disruption to existing occupants due to building and construction activities.
This contract should not be considered alone, but in conjunction with the results of the searches on inquiries normally made in respect of a lot in a strata scheme.
51 The description of the development is in the following terms:
1. Description of LandDescription of Development
Lot 1 in Deposited Plan
3. Description of Development Lot or Lots
2. Description of any Land proposed to be added to the Scheme
Lot D Deposited Plan 10009.
Lot 6 in strata plan registered with this contract.
52 The strata development contract specifies the covenants in Sch 1BA as follows:
4. Covenants implied in Strata Development Contracts by the Strata Schemes (Freehold Development Act 1977, Strata Schemes (Leasehold Development) Act 1986
(i) Warranted Development
…
(ii) Permission to carry out warranted development and authorised proposals
The parties, other than the developer, jointly and severally agree with the developer that the developer is permitted to carry out, in accordance with the covenants set out and implied in the contract.
· The warranted development (if any) and
· Such other development as is described and identified as “ authorised proposals – proposed development not subject to a warranty” in the contract.
(iii) Owners Corporation expenses
The developer agrees with the owners corporation that the developer will pay the reasonable expenses incurred by the owners corporation:
· In repairing damage to the common property caused in carrying out the permitted development, except damage due to normal wear and tear and
· For any water, sewerage, drainage, gas, electricity, garbage, conditioned air or telephone service used in carrying out that development and
· For additional administrative costs connected with that development, such as the cost of giving notice of and holding any meeting required to obtain approval of a strata plan subdivision.
(iv) Standard of development
…
(vi) Restoration of common property
The developer agrees with the other parties to make good, as soon as is practicable, any damage to a development lot arising out of performance of the contract, whether or not the contract contemplates or permits the damage.
…For the purpose of this covenant, “ damage ” does not include damage necessarily resulting from having carried out (in accordance with the contract) development that is permitted by the contract to be carried out.
53 The strata development contract contains the following provisions relating to warranted development and authorised proposals:
5. Warranted Development – proposed development subject to a warranty. Development that the developer may be compelled to carry out.
NIL
6. Authorised proposals – proposed development not subject to a warranty.
Development that the developer is permitted to carry out, but not compelled to carry out.
It is proposed to acquire Lot D Deposited Plan 10009 and consolidate it with development Lot 6 and develop as follows
(i) Description of DevelopmentLots 1 to 5 inclusive have already been developed with 1 and 2 storey brick units in accordance with council approval and therefore no warranty is required.
Subdivision of Lot 6 and Lot D in Deposited Plan 10009 to create Lots 7 to 10 inclusive.
Lot 6 will be 4 units with equal unit entitlements after consolidation with Lot D Deposited Plan 10009.Two single storey and two double storey brick units.
(ii) Common Property Amenities
Not applicable
(iii) Schedule of Commencement and Completion
Not applicable
(iv) Schedule of Lots
Lot numbers
4 units Lots 7 to 10 inclusive
(v) Working Hours
Any hours approved from time to time by Rockdale City Council including:
· Mondays to Fridays 7.00 am – 6.00 pm
· Saturdays 8.00 am – 4.00 pm
(v) Arrangements for Entry, Exit, Movement and Parking of Vehicles to, from and on the parcel during Development and Permitted Uses of Common Property and Development Lots during development
Generally the developer will gain access to the site from Solander Street. The developer and all persons authorised by the developer have the development rights for the purpose of facilitating development of the strata scheme in stages and carrying development activities on the parcel [sic]. Development activities include any form of demolition work, building work or work ancillary to or associated with building work on the strata parcel; any form of landscaping work or work ancillary to or associated with landscaping work on the strata parcel; and, such other things as may be required by the developer, which are incidental to the development of the strata scheme. If the developer locks up or secures any of the common property, the developer must give the secretary of the owners corporation a security key for that locked or secured area.
…
(x) Contribution to Common Property Expenses
The developer is obliged to contribute to common property expenses only in respect of lots in each stage which are developed and retained in the ownership of the developer, and then only in accordance with the schedule of unit entitlements. For the avoidance of doubt, no contribution is payable by the developer in respect of development lots which have not been developed and subdivided.
…
7. Date of Conclusion of Development Scheme
8. Concept Plan
This Scheme will be completed by December, 2007.
See attached concept plans referred to in Sheets 1 to 9 inclusive.
54 The strata development contract bears a certificate of approval of the Council as the consent authority dated 23 February 2001 in the following terms:
(b) the carrying out of the proposed development described as “warranted development” and “authorised proposals” in this strata development contract would not contravene:(a) that the consent authority has consented to the development described in Development Application No 538/01 and
(i) any condition subject to which the consent was granted; or
(ii) the provisions of any environmental planning instrument that was in force when the consent was granted except to the following extent: (fill in if applicable).
55 Development consent 538/01 referred to in this certificate is the consent for strata subdivision of 35 – 37 Solander Street.
56 The concept plans attached comprise three sheets showing the completed development at 35 – 37 Solander Street of five units and the proposed development of 33 Solander Street of four units. Two driveway crossings are shown. The first services 35 – 37 Solander Street and all but the front unit (unit 6) on 33 Solander Street. The second is a driveway into the disabled carport (shown as part of unit 6) on 33 Solander Street. The plans show three car spaces for visitors (two at the rear of the driveway and one at the front opposite unit 1).
57 In other words, the remaining development to complete the development scheme contemplated by the strata development contract was the development of 33 Solander Street. This development scheme consisted of authorised proposals rather than warranted development. 35 – 37 Solander Street was relevant insofar as the development of 33 Solander Street partly depended on facilities on that land (including use of the driveway and visitor car spaces as shown on the concept plans).
58 Strata plan 65404 and the strata development contract were registered on 14 May 2001. Between May and September 2001 the applicant sold each of the units on 35 – 37 Solander Street to the second to sixth respondents (or their predecessors in title). The contracts for sale were substantially in the same form and included the strata development contract.
59 In early 2002 the applicant became concerned that he was paying too much in strata levies given that he only owned the strip of land comprising development lot 6 along the western boundary of 35 – 37 Solander Street. On 18 March 2002 the applicant applied to the Consumer Trader and Tenancy Tribunal (the CTTT) with respect to strata scheme 65404 for an order re-allocating unit entitlements. The reasons given by the applicant in support of the application were that development lot 6 is “a strip of land that will join a proposed development” of 33 Solander Street but:
At this time there is no certainty the adjoining lot to lot 6 can be acquired. In the meantime Lot 6 has an area of only 66 sq metres and is a garden bed.
60 The applicant and owners corporation both submitted valuations to the CTTT. On 13 February 2003 the CTTT delivered a decision in which it re-allocated the unit entitlements, reducing the applicant’s liability.
61 In the meantime, on 15 November 2002, the applicant’s agent applied to the Council to extend the period for lapse of the 2000 consent relating to development of 33 – 37 Solander Street. The Council extended the period so that the 2000 consent would lapse on 9 December 2003 if not commenced. The applicant had numerous discussions in and after about mid 2001 about buying 33 Solander Street with one of the owners of that property but the applicant said he was “never willing to sign a contract to purchase their property until [he] had both development consent, and money to fund the building work on Stage 2. While [he] received development consent for Stage 2 of the development at the end of 2000, [he] did not have the money at that time to proceed because of other investments [he] was involved in”.
62 The applicant did not commence the 2000 consent applying to 33 – 37 Solander Street before 9 December 2003. Consequently, the 2000 development consent lapsed. In response to an inquiry the Council notified the owners corporation to this effect by letter dated 15 December 2003.
63 By early 2004 the applicant said he had the money to proceed with the development of 33 Solander Street (which he erroneously described as having lapsed on 29 November 2002). On 28 June 2004 the applicant’s architect lodged a further development application relating to 33 – 37 Solander Street with the consent of the applicant and of the owners of 33 Solander Street. The accompanying statement of environmental effects described the development application as a “resubmission of a previously approved development application” (namely, the 2000 consent).
64 The Council notified the 2004 development application. On 13 July 2004 the Council advised the applicant’s architect that owner’s consent of the owner’s corporation for strata plan 65404 was required for the 2004 development application. A solicitor responded to the Council referring to the strata development contract. The Council confirmed on 6 September 2004 that it had received legal advice and required owner’s consent from the owner’s corporation as the 2004 development application proposed to develop common property within strata plan 65404, but that no such consent was required for the mere use of the driveway.
65 In the meantime, on 15 July 2004, the owners corporation resolved to accept a list of objections to the 2004 development application (documented by Mr Henwood), oppose any moves to amalgamate strata plan 65404 with the “proposed development” (that is, the development of 33 Solander Street), and not to grant access through the common driveway for any new development. On 29 July 2004 solicitors for the owners corporation submitted a letter to the Council noting that development consents 172/01 and 538/01 had both lapsed (in fact, only development consent 172/01, being the 2000 consent relating to 33 – 37 Solander Street, had lapsed). The solicitors observed that under s 28Q of the Strata Schemes Act, the development scheme concluded when any development consent required for carrying out the scheme is revoked. The solicitors submitted that lapse had the same effect as revocation (an argument on which the respondents did not rely in the hearing). The letter made other submissions and concluded by saying that the development application was misconceived as it required consolidation of the whole of strata plan 65404 with 33 Solander Street and the owners corporation of that strata plan did not consent to the consolidation. Mr and Mrs Jones also lodged a submission with the Council objecting to the 2004 development application on various grounds.
66 On 13 September 2004 solicitors wrote to the owners corporation stating that they acted for the developer in relation to stage 2, being an entity called Christanelle Developments Pty Limited. The applicant is the sole director of Christanelle Developments. The letter noted that the Council required the owners corporation to consent (amongst other things) to the use of the existing driveway to facilitate the development of 33 Solander Street and requested this consent. The owners corporation resolved to obtain legal advice on 25 September 2004. On 20 October 2004 the solicitors for the owners corporation informed the solicitors for Christanelle Developments that the owners corporation declined to provide the consent sought.
67 On 6 November 2004 the owners corporation, apparently in response to further correspondence on behalf of the applicant, resolved not to respond to the correspondence and to “continue to deny Christanelle Developments permission to access our common drive”.
68 Neither the applicant nor Christanelle Developments appear to have taken any further steps with respect to these matters. Instead, nearly 6 months later, in or about May 2005, the applicant’s architect amended the 2004 development application. These amended plans apparently confined the development for which consent was sought to 33 Solander Street. The Council notified this amended development application. On 20 May 2005 the solicitors for Christanelle Developments wrote to the Council seeking confirmation that the amended development application could proceed without the consent of the owners corporation to use the existing driveway. On 20 July 2005 the Council responded after having obtained legal advice. The Council said that owner’s consent of the owners corporation would not be required provided all physical works were confined to 33 Solander Street, there was no construction on the common property of strata plan 65404, and the application did not seek consolidation with strata plan 65404. Mr and Mrs Jones and Mr and Mrs Stock also lodged submissions with the Council objecting to the amended development application on various grounds.
69 On 11 August 2005 the solicitor for Christanelle Developments (described as the developer of stage 2) gave notice of an extraordinary meeting of the owners corporation. The applicant, as sole director and secretary of Christanelle Developments, signed the agenda attached. The agenda was to “consider the motions regarding development concerns set out” in the attachment. The three motions were as follows:
MOTION NUMBER MOTION 1 THAT the Owners Corporation provide consent to Rockdale City Council for Christanelle Developments Pty Limited to use the existing driveway and existing common property of Stage 1 for access to the proposed development of the Stage 2 development in accordance with the existing Strata Development Contract – Strata Plan 65404. THIS MOTION RELATES TO A DEVELOPMENT CONCERN – SEE SECTIONS 28N, 28O AND 28P OF THE STRATA SCHEMES (FREEHOLD DEVELOPMENT) ACT 1973. 2 That the Owners Corporation provide consent to Christanelle Developments Pty Limited to consolidate Development Lot 6 with adjoining land comprising Lot D of DP 10009 to allow the development of Stage 2 in accordance with the existing Strata Development Contract – Strata Plan 65404. THIS MOTION RELATES TO A DEVELOPMENT CONCERN – SEE SECTIONS 28N, 28O AND 28P OF THE STRATA SCHEMES (FREEHOLD DEVELOPMENT) ACT 1973. 3 That the Owners Corporation provide its consent to Rockdale City Council and Land Property Information Division for Christanelle Developments Pty Limited to sub-divide the parcel of land comprising the consolidation of Development Lot 6 and Lot D of DP 10009 in accordance with the existing Strata Development Contract – Strata Plan 65404. THIS MOTION RELATES TO A DEVELOPMENT CONCERN – SEE SECTIONS 28N, 28O AND 28P OF THE STRATA SCHEMES (FREEHOLD DEVELOPMENT) ACT 1973.
70 On 14 August 2005 the owners corporation called an extraordinary general meeting at which it resolved not to attend the meeting called by the notice of 11 August 2005, not to accept the motions outlined by the applicant’s solicitor, and to seek legal advice. According to a letter from the solicitors for the applicant’s architect in the Class 1 appeal to the Council on 20 April 2006 the motions were passed by the applicant relying on s 28N(1) of the Strata Schemes Act (which provides that a vote of a developer alone is sufficient to pass or defeat a motion which has the effect of making a decision about a development concern). The applicant, however, appears not to have taken any step in reliance on these motions being passed. Instead, another six months passed with no action apparent on the applicant’s part.
71 On 17 February 2006 the applicant’s architect filed a Class 1 appeal against the Council’s deemed refusal of the 2004 development application under s 97 of the EPA Act. Sections 82(1) and 97 of the EPA Act had provided a right of appeal to the applicant against the Council’s deemed refusal of the 2004 development application within 40 days of lodgement (that is, by mid August 2004). The Council refused development consent to the 2004 development application on 20 April 2006 (which also had the effect of re-enlivening the appeal right and thus making any issue about the competency of the appeal moot).
72 The Council’s refusal of the amended development application identified four grounds: - (i) lack of owner’s consent from the owners corporation strata plan 65404, which was required for the consolidation of 33 Solander Street with the strata plan, (ii) failure to satisfy Development Control Plan No 34 – Villas and Townhouses with respect to privacy impacts on the private open space of adjoining properties, inadequate internal amenity of the proposed dwellings with most bedrooms not meeting the minimum required size, and unsafe and inefficient arrangements for vehicular movements, (iii) non compliance with the Council’s Stormwater Design Code, and (iv) the development was not in the public interest as it creates adverse impacts on the amenity of adjoining properties. The report to the Council expanded on these reasons for refusal. The adjoining property subject to adverse privacy impacts was to the west, being 31 Solander Street. The parking issues arose because visitor car space 3 did not allow entry and exit in a forward direction and was too close to the entry gates. Similarly, the car space for unit 6 did not have a turning bay to allow exit in a forward direction. Hence, the development did not provide safe, efficient and accessible parking as required by Development Control Plan No 34. Finally, the onsite detention system exceeded the maximum permitted absorption length and had not been accompanied by the required stormwater drainage information and calculations.
73 On 20 June 2006 the Council informed Mr and Mrs Jones that, following assessment of amended plans, and confirmation from the applicant that it no longer proposed to seek consent for the strata subdivision of 33 Solander Street as part of the 2004 development application, the Council was prepared to enter into consent orders upholding the applicant’s Class 1 appeal. The Class 1 appeal was listed for hearing on 3 July 2006. The submissions on behalf of the applicant in the Class 1 appeal confirmed an agreement with the Council that “the consent for Stage 2 is to expressly exclude any consent for strata subdivision or amalgamation of title that would affect the use or ownership of” 35 – 37 Solander Street”. The Court made orders on 3 July 2006 upholding the appeal and granting development consent to the development application to demolish existing structures and construct two villas and two townhouses at 33 – 37 Solander Street, Monterey, subject to conditions. The consent was granted under s 80(3) of the EPA Act on a deferred commencement basis as follows:
The consent shall not operate until you satisfy Council about the following matters:This Development Consent has been approved under Section 80(3) of the Environmental Planning and Assessment Act, 1979 as a Deferred Commencement consent.
i. Submission of stormwater drainage design documents to Council for assessment and approval. Design documents to be prepared in accordance with the Council’s Stormwater Design Code, and include plans, sections and details for stormwater drainage for the development.
ii. Submission of stormwater drainage design calculations to Council for assessment and approval. Design calculations to be undertaken in accordance with the Council’s Stormwater Design Code, and include all relevant supporting information.
iii. Submission of a Stormwater Drainage design checklist from Appendix G of the Stormwater Design Code, together with calculation summary sheets for the on-site retention or detention system.
iv. Submission of a geotechnical report identifying the rate of absorption for the site to Council for assessment and approval. Testing and reporting to be undertaken in accordance with the Council’s Stormwater Design Code, and include discussion of the following:
a) Substantiation of the absorption rate to be used for the design of the absorption trenches;
b) Confirmation of the appropriate locations and design characteristics of absorption trenches; and
c) Identification of the depth to the water table.Pursuant to Clause 95(3) of the Environmental Planning and Assessment Regulation, 2000, the period of the Deferred Commencement shall be six (6) months. It is important we hear from you about the outstanding matters above as soon as possible so as to avoid any other delay.v. Nothing in this development consent grants approval for any development on land within Strata Plan 65404. The development is not to commence until either the Council or a Court of competent jurisdiction has expressly confirmed its satisfaction with legal rights enjoyed by the owner of Lot D DP 10009 for any use of the adjoining land by the approved development (whether for access, parking, the discharge of stormwater or otherwise), and development consent has issued for that use.
74 The ordinary conditions of the development consent (as granted on 3 July 2006 and before the modification on 12 December 2007) include condition 1 to the effect that the consent will lapse in three years if the development is not commenced within that period. Condition 5 requires a separate development application for the strata subdivision of the lots. Conditions 24 to 43 specify matters that must be satisfied before the issue of a construction certificate. Conditions 44 to 54 nominate matters required to be satisfied before the works are commenced. The balance of the conditions relate to construction and development activities. The approved plans referred to in condition 2 (later altered by the modification on 12 December 2007) show one driveway crossing, being the driveway into 35 – 37 Solander Street. The second driveway into the adaptable unit 6 has been deleted, as has the carport associated with that unit. Instead, a garage is provided on the eastern side of unit 6 fronting units 1 and 2 on 35 – 37 Solander Street. Further, the visitor car space adjacent to unit 6 on the driveway has been deleted. Instead, three car spaces appear at the rear of the driveway.
75 Although the Court granted the development consent on 3 July 2006 the next material event did not take place until 18 October 2006. On or about 18 October 2006 the applicant attempted to lodge a request for registration amending the strata development contract by substituting the plans approved by the Court on 3 July 2006 and altering the date for completion of the development scheme from December 2007 to 3 July 2009. When notified of this attempt (on 1 June 2007) the solicitor for the owners corporation sought withdrawal of the unregistered dealing. The applicant’s solicitors confirmed on the same day that Land Property Information had not permitted registration and required withdrawal of the dealing.
76 On 31 October 2006 the applicant called an extraordinary general meeting of the owners corporation for 10 November 2006 to consider six motions. However, the minutes record that the applicant did not attend this meeting and the following motions were put and denied in the applicant’s absence:
Motion 1
The owners corporation for strata plan 65404 consents to such use of the common property as is necessary to allow the development described in the development consent to DA 1259/2004 to demolish existing structures and construct two villa and two townhouses at 33-37 Solander Street, Monterey to proceed.Motion 2
The owners corporation consents to the lodgement of any development application necessary to obtain development consent for the use of common property within strata plan 65404 for the development approved in the court consent to DA 1259/2004.Motion 4Motion 3
The owners corporation acknowledges that the proprietor of development lot 6 in this strata plan enjoys such legal rights for the use of the common property (whether for parking, access and discharge of stormwater or otherwise) as are required to implement the development consent to DA 1259/2004 to demolish existing structures and construct two villas and two townhouses at 33-37 Solander Street, Monterey.
The Owners corporation agrees to such amendment of the strata development contract as is necessary to implement the development consent to DA 1259/2004 to demolish existing structures and construct two villas and two townhouses at 33-37 Solander Street, Monterey. Upon approval of any such amendment by Rockdale City Council or the Land & Environment Court provided that the amendment is only to be made if:
(a) Section 28J* of the Strata Schemes (Freehold development Act 1973) has been complied with in relation to the amendment, and
(b) The amendment is registered, and
(c) The amendment is not inconsistent with a strata management statement for the strata scheme concerned.Motion 6Motion 5
The owners corporation authorises the owner of development lot 6 to execute on behalf of the owners corporation such documents as are necessary to give effect to resolution 4 in this Notice.
The secretary of the owners corporation is to produce the seal of the owner’s corporation as necessary to give effect to these resolutions.
77 The note to the reference to s 28J in motion 4 referred to s 28J(2) of the Strata Schemes Act (to the effect that a proposed amendment involving a change in the basic architectural or landscaping design of the development or in its essence or theme requires approval of the consent authority and a unanimous resolution of the body corporate).
78 On 27 November 2006 the applicant gave notice of a further extraordinary general meeting on 8 December 2006 proposing six motions generally as set out above but with each motion asserting that it related to a development concern (ss 28N, 28O and 28P of the Strata Schemes Act). In particular, motion 4 was in the following form:
Motion 4
The Owners corporation agrees to such amendment of the strata development contract as is necessary to implement the development consent to DA 1259/2004 to demolish existing structures and construct two villas and two townhouses at 33-37 Solander Street, Monterey, upon approval of any such amendment by Rockdale City Council or the Land & Environment Court provided that the amendment is only to be made if:
THIS MOTION RELATES TO A DEVELOPMENT CONCERN – SEE SECTIONS 28N, 28O AND 28P OF THE STRATA SCHEMES (FREEHOLD DEVELOPMENT) ACT 1973(a) Section 28J of the Strata Schemes (Freehold development Act 1973) has been complied with in relation to the amendment, and
(b) The amendment is registered, and
(c) The amendment is not inconsistent with a strata management statement for the strata scheme concerned.
79 Each motion was overruled with the minutes recording that the applicant declared that he “defeated” each such motion.
80 On 6 December 2006 the Council notified the applicant that deferred commencement conditions (i) to (iv) of the development consent granted by the Court on 3 July 2006 had been satisfied, but the consent remained inoperative pending satisfaction of deferred commencement condition (v).
81 On 9 February 2007 the applicant commenced proceedings 20096 and 40097 of 2007.
82 On 25 May 2007 the applicant entered into a contract to purchase 33 Solander Street. The sale price was $950,000 with a 10% deposit paid on exchange. The completion date under the contract was to be 1 November 2007 but completion was effected on or about 6 November 2007. The contract (as exchanged) noted the applicant as the purchaser. Thereafter a new purchaser was substituted (Christanelle Developments) but, on or about 6 November 2007, the applicant’s name was again substituted as the purchaser. Special condition 43 of the contract provides that:
The purchaser shall not commence any construction or building works whatsoever prior to the settlement date of 1 November 2007. Further the consent given to the purchaser by the vendors in regard to the Development Application does not constitute a condition of this contract. The purchaser has no authority nor do the vendors give such authority to the purchaser to commence any construction until the settlement date.Development Application
83 On 15 June 2007 the Council granted approval to an application to modify the development consent granted by the Court on 3 July 2006 by providing a deferred commencement period of 14 (as opposed to six) months. The application and approval appear to have overlooked the effect of cl 111 of Sch 6 to the EPA Act. This provision was consequential on the insertion of s 95(6) by the Environmental Planning and Assessment Amendment Act 2006 (to the effect that a development consent will lapse if deferred commencement conditions are not satisfied within 5 years or such shorter period as the consent authority may specify). Clause 111 applies to consents granted before the commencement of s 95(6) (and thus applies to the 3 July 2006 consent). Under that provision the consent will lapse five years after 3 July 2006. In any event, the Council modified the consent again on 1 October 2007 to provide for the outstanding deferred commencement condition (v) to be satisfied by 30 November 2007.
84 On 30 October 2007 the applicant filed a further Class 1 appeal (also designated proceedings No 10129 of 2006) under s 96(8) of the EPA Act seeking to delete or amend the outstanding deferred commencement condition (v) under the 3 July 2006 consent and to amend the approved plans insofar as they dealt with visitor car parking. This Class 1 appeal was not determined by the conclusion of the hearing.
85 On 19 December 2007 I granted the applicant leave to re-open to tender the Court’s order of 12 December 2007 in proceedings No 10129 of 2006 modifying the consent granted by the Court on 3 July 2006, and permitted the respondent to adduce evidence in reply.
86 The further Class 1 appeal was listed for hearing on 12 December 2007. The Council agreed to the consent being modified. The respondents sought leave to be joined as a party to the appeal. This culminated in an application to the Duty Judge. The circumstances surrounding this application were not agreed, but it is sufficient to note that the respondents’ joinder application was denied.
87 The Court made consent orders on 12 December 2007 in which it upheld the appeal and modified the consent as follows:
2. The consent to DA 1259/2004 to demolish existing structures and construct two villas and two townhouses at 33/37 Solander Street, Monterey, granted by this Court in proceedings No. 10129 of 2006 be modified as follows:
(a) Insert a new condition 2A to read:
“visitor parking spaces for the development and strata plan 65404 together be provided in accordance with the landscape plan prepared by TGS Landscape Architects dated 1 November 2007, drawing number 2007.1004CC1-1 and 1-2, issue D”.
144 The applicant appeared to believe that obtaining the consent of the owners of 33 Solander Street to lodge development applications had some significance greater than the provisions of the EPA Act would warrant. Obtaining the consent of an owner of land to lodge a development application under the EPA Act is one thing. Obtaining a right to develop that land is another. The applicant never enjoyed that right until 1 November 2007 (that is, two months before the development scheme was to conclude). Mr Kanaan said the development would involve a construction period of seven months using the driveway and about eight to eight and a half months not using the driveway (which I accept). He assumed a commencement date for construction of 12 January 2007 (after the date for conclusion of the development scheme). The development could never be completed within the period between 1 November and 31 December 2007. Nothing in the respondents’ power could alter this fact.
145 The evidence does not establish that the respondents’ conduct affected the timing of the contract to purchase 33 Solander Street or its completion date. The applicant, for example, did not say so. Further, and as explained below, the events leading up to entry into the contract do not support that inference. Instead, they disclose that the applicant did things when he saw fit, regardless of anything the respondents might have said or done. In circumstances where the applicant could not have commenced the development of 33 Solander Street before 1 November 2007 the submission that the respondents have delayed or frustrated the development of stage 2 is unsustainable.
146 Many events support this conclusion. The applicant had the benefit of an operative consent permitting the development of 33 Solander Street as at 18 January 2001 (that is, before the strata development contract was registered). The applicant could not carry out the development because he did not own 33 Solander Street. The applicant was not willing to buy 33 Solander Street because he was involved in other projects and had insufficient funds to develop that land. As the applicant submitted, there is nothing wrong with having insufficient funds. That is not the point. The point is that the applicant decided when to use and where to put his funds. The applicant so decided knowing that the strata development contract provided a date for conclusion of the development scheme.
147 Although the 2000 development consent (operative from 18 January 2001) did not lapse until 9 December 2003, the applicant did not secure commencement of that consent. This is so despite the applicant saying that he had the money to proceed with the development of stage 2 by early 2004. The obvious inference (which I draw) is that the applicant could not secure commencement of that consent because the applicant did not have the necessary proprietary rights to develop 33 Solander Street at this time. The applicant’s evidence referred to numerous discussions with the owners of 33 Solander Street (who were apparently unwilling to accept whatever offers the applicant was willing to make). The commercial negotiations between the applicant and the owners of 33 Solander Street have nothing to do with the respondents. The applicant was always exposed to the risk of not being able to secure the necessary proprietary rights to develop 33 Solander Street within the time required for conclusion of the development scheme by the strata development contract. This is because the applicant registered the contract in 2001 without owning 33 Solander Street or having in place arrangements to mitigate the risks of not owning that land (such as an option or conditional contract).
148 The applicant obtained owner’s consent for 33 Solander Street to lodge another development application (only a few months after the lapse of the 2000 consent). Although this application was lodged in June 2004 and not determined by the Council as required, the applicant waited until February 2006 to lodge a Class 1 appeal against the Council’s deemed refusal of the application. The evidence does not support a conclusion that this delay had anything to do with the respondents (particularly having regard to the fact that the applicant apparently resolved to grant various consents on behalf of the owners corporation in response to the notice of an extraordinary general meeting of 11 August 2005).
149 The evidence also does not establish that the respondents’ conduct was a material cause of the Council’s deemed refusal of the application. When the Council refused the application in April 2006 it did so on a number of grounds, only one of which related to the owner’s consent of the body corporate of strata plan 65404. The other grounds of refusal, however, are telling. For example, one ground related to inadequate stormwater information. The applicant controlled the provision of that information to the Council. Yet the applicant did not provide that information (or adequate stormwater information) to the Council before the appeal in July 2006. Ultimately, the Court imposed deferred commencement conditions (i) to (iv) requiring the same information to be provided before the development consent could become operative. Another ground of refusal related to privacy impacts on 31 Solander Street. That issue was apparently resolved by amending the design of the west facing windows. These matters were all unconnected to the respondents. The applicant resolved these matters in his own time. In other words, irrespective of the respondents’ position, the evidence indicates that the applicant would have been in the same position.
150 Further, the evidence does not establish that the respondents’ conduct was a material cause of the applicant’s delay in progressing the 2004 development application (including by appeal if necessary). For this purpose it is necessary to leave aside the potential for confusion caused by the applicant’s apparent assumption in his dealings with the respondents that Christanelle Developments could be substituted as the developer under the strata development contract. Between 20 October 2004 (the date the solicitors for the owners corporation informed the solicitors for Christanelle Developments that the owners corporation declined to provide the consent sought) and May 2005 (when the applicant amended the development application) the evidence discloses nothing of significance happening. This is so despite the fact that the next event (the 11 August 2005 notice of an extraordinary general meeting) discloses the applicant’s belief that the Strata Schemes Act enabled him, by unilateral resolution, to resolve to grant all consents necessary for the carrying out of the development of stage 2. Similarly, between August 2005 (when the applicant resolved to pass all the resolutions he sought, relying on the statutory provisions relating to development concerns) and February 2006 (when the Class 1 appeal was lodged) the evidence discloses nothing of significance happening. The applicant observed that a person has no obligation to appeal against a council’s deemed refusal of a development application. This is true. The relevant point, however, is the applicant knew that the strata development contract provided a date for conclusion of the development scheme in December 2007 and yet waited for more than 18 months before exercising the appeal right. Another example of inordinate delay by the applicant is available after the grant of the development consent by the Court on 3 July 2006. It took from 3 July 2006 (when the Court granted the deferred commencement development consent) until 6 December 2006 (the Council’s notice of satisfaction of deferred commencement conditions (i) to (iv)) for the stormwater information to be provided and approved by the Council. This is the same stormwater information the Council identified as required in April 2006.
151 Moreover, the evidence does not adequately explain these long periods of delay by the applicant. It does not establish or indicate that the respondents had any effect on the applicant’s dealings. Importantly, all of this time passed in circumstances where the applicant had not secured any proprietary rights over 33 Solander Street and did not have those rights until 1 November 2007 under the contract entered into on 25 May 2007.
152 The conduct of these proceedings also cannot be reasonably characterised as the cause of delay to the applicant. Given that the applicant did not have the right to commence any development of 33 Solander Street until 1 November 2007, the applicant could never have completed the development by the time contained in the contract, irrespective of any time taken by these proceedings. In other words, notwithstanding anything the respondents might have said or done, the applicant’s decision to register the strata development contract without having secured the necessary proprietary rights over 33 Solander Street and the fact that he did not have those rights until 1 November 2007 meant that the applicant was faced with a choice of either allowing the development scheme to conclude or applying to the Court for an extension. The applicant chose the latter option by commencing the proceedings in February 2007. Completion of the contract for the purchase of 33 Solander Street occurred during the hearing. Whatever events took place in the proceedings cannot change that fact. Nor can delay of one or two months said to have been caused by the respondents vacating the hearing.
153 For these reasons, the evidence does not support the applicant’s characterisation of the extension as one to allow for the delay caused by the respondents denying their obligations under the strata development contract and the consequential conduct of these proceedings. Instead, the evidence supports the inference that the applicant chose when and when not to proceed (presumably having regard to his own best interests). The applicant did so knowing both that: - (i) he had to own or control 33 Solander Street to carry out the development, and (ii) the contract with the proprietors of 35 – 37 Solander Street would cease to have effect on 31 December 2007. Accordingly, this is not a case where the respondents would gain an advantage by any wrong if the extension sought by the applicant were not granted.
154 The third proposition (that the respondents cannot point to any particular prejudice) is contrary to the evidence, common human experience and the provisions of the Strata Schemes Act. The respondents do not want strata plan 65404 to be consolidated with the units to be developed on 33 Solander Street. They do not want to share the driveway on 35 – 37 Solander Street with the units on 33 Solander Street. Mr Henwood does not want a garage located diagonally opposite his unit as part of unit 6 when that was not shown on the concept plans attached to the strata development contract. Assuming validity, enforceability and (for the last matter) amendment of the strata development contract, the position of the respondents is immaterial for so long as they are bound by the strata development contract. Under s 28I(2) they will no longer be bound on conclusion of the development scheme. On that day (without extension by Court order) the contract will cease to have effect (without affecting, however, any accrued right or obligation). The capacity to extend the time for conclusion of a development scheme exists, but that does not undermine the fact that extending the time for conclusion of a development scheme will have the effect of binding people under a contract who would not otherwise be bound. It is obvious that making orders having that effect imposes a burden on the people so bound.
155 In this case, the particular nature of the burden also has to be recognised. The strata development contract provided for conclusion of the development scheme by December 2007. In other words, the development of 33 Solander Street, all associated construction activities, and the consolidation of that land with development lot 6 and its subdivision into lots were to be completed before 31 December 2007. At present, none of those matters have been commenced (and could not have been commenced by the applicant before 1 November 2007). The applicant thus proposes that the entirety of the development scheme provided for in the strata development contract be carried out and completed outside the time for conclusion specified. This is not to say that the power is unavailable in this case. It is merely to recognise that, if the power is exercised, the whole development process will take place after the specified date. The fact that the Court can make consequential orders, including for the payment of money, is not necessarily decisive of the question of what is just and equitable in the circumstances. The parties did not suggest any order for the payment of money. It is difficult to envisage what order could meaningfully be made in the circumstances of this case.
156 The applicant’s fourth proposition (about his pursuit of the consent granted by the Court in July 2006 as subsequently modified and purchase of 33 Solander Street) has to be approached in the context set by the provisions of the Strata Schemes Act. Once it is accepted the evidence does not support an inference that the respondents caused the applicant delay with respect to the development of 33 Solander Street, it is clear that the applicant’s pursuit of the development consent and purchase of 33 Solander Street should not be determinative considerations. Although the applicant considered that owning development lot 6 in strata plan 65404 gave him a “competitive advantage” over other developers of 33 Solander Street, the evidence does not support a reliable inference that 33 Solander Street cannot be developed without relying on 35 – 37 Solander Street, or that the applicant paid more than the land was worth. The applicant’s representations to the owners of 33 Solander Street in or about October 2000 to this effect were presumably made in his own best interests and provide an unsafe foundation for any such speculation.
157 In any event, such considerations would not lead to a different result. The applicant bought 33 Solander Street knowing that the strata development contract provided a date for conclusion of the development scheme in December 2007. The applicant did so some three months after commencing proceedings in which he sought an order for extension of the time for conclusion of the development scheme, and knowing that the respondents opposed the extension. The applicant remains the owner of 33 Solander Street and development lot 6. The fact that the applicant might develop 33 Solander Street independently of the respondents at any time (so that the construction impacts will be suffered in any event) is not significant. All people in an urban environment are potentially exposed to construction impacts. That exposure is different from being bound under an extended strata development contract.
158 The fifth proposition concerned the period of the extension (12 months) being within the maximum period of 10 years referred to in s 28Q(2). I construe s 28QA(1) as permitting the Court to order an extension beyond the period of 10 years. Nevertheless, it must also be recognised that the period of 10 years covers all potential classes of development. The development of four units on 33 Solander Street is towards the smaller end of the scale of staged development. The strata development contract provided a generous period for the applicant to obtain the necessary development consent (which, in fact, the applicant had in operative form by January 2001) and the proprietary rights to carry out the development (which the applicant did not enjoy until 1 November 2007). The applicant did not do so for reasons unconnected to the respondents.
159 The power under s 28QA(1) of the Strata Schemes Act enables the Court to make orders affecting important rights and obligations. In many cases (as here for the respondents) the rights and obligations will relate to what would often be a person’s most important asset (their home). For a developer rights and obligations under a strata development contract will also be important. As I have said, all of the circumstances of the particular case should be considered before determining whether or not to exercise the power. Having done so, I am satisfied that the power under s 28QA(1) of the Strata Schemes Act should not be exercised in the applicant’s favour. To defer (or fix a later time for) conclusion of the development scheme in the circumstances described above, in my view, would cause a substantial injustice to the respondents incapable of effective amelioration by consequential orders. The consequence of this conclusion is that the contract will cease to have effect on 31 December 2007 and the applicant will not be able to require the respondents to permit the development of stage 2 to be carried out insofar as it involves 35 – 37 Solander Street. Any hardship to the applicant occasioned thereby is a consequence of the operation of the provisions of the Strata Schemes Act on the facts referred to above. Any such hardship is an inadequate and insufficient basis to make an order that would be fundamentally unjust and inequitable in the circumstances I have described.
160 Accordingly, the date for conclusion of the development scheme should remain as December 2007 as set out in the strata development contract.
161 I am satisfied that it follows there is no or little utility in the Court approving an amendment to the strata development contract or making the declarations and orders sought with respect to that contract. Hence, I will deal with these issues as briefly as possible.
Approval of amendment of development scheme (s 28K)
162 It is necessary first to observe that the Court did not grant any consent to development on 35 – 37 Solander Street in its orders of 3 July 2006 or 12 December 2007. The applicant deleted development on 35 – 37 Solander Street from the development application (even though such development is shown on the plans referred to in the consent).
163 I do not accept the applicant’s primary position that the development may proceed in accordance with both the consent granted by the Court on 3 July 2006 (as modified) and the “authorised proposals” identified in the strata development contract without any amendment of that contract. The development depicted on the plans referred to in the Court’s consent is materially different from that identified on the concept plans attached to the strata development contract (as explained below).
164 A strata development contract must include a concept plan (s 28C). A concept plan must illustrate, in the manner approved by the Registrar-General, the sites proposed for and the nature of the buildings and works that would result from all permitted development under the contract (s 28D). The applicant included concept plans in the strata development contract illustrating the development of 33 Solander Street as stage 2. Concept plans are fundamental to the operation of the strata development contract as ss 28C(2) and 28D disclose. Leaving aside the visitor car parking spaces, the concept plans depicted two driveway crossings (with a separate crossing to service unit 6) and the carport for unit 6 to the west of that unit. The development shown on the plans referred to in the consent granted by the Court on 3 July 2006 (as modified) has one driveway crossing and a garage for unit 6 to the eastern side (opposite units 1 and 2). Whatever the reasons for (or planning merits of) these differences they involve material inconsistency between the concept plans forming part of the strata development contract and the plans referred to in the application to amend that contract. The applicant has no right under the strata development contract to carry out development in the different form because the respondents have no obligation under the Strata Schemes Act to permit development other than in accordance with the strata development contract (s 28A(4)).
165 Accordingly, and again irrespective of the respondents’ position about the stage 2 development, the applicant needed to make an application to amend the strata development contract if he wished to carry out development as contemplated by the plans referred to in the consent granted by the Court.
166 The applicant also relied on development consent 538/01 granted on 19 February 2001 to support its primary position. That consent was for the strata subdivision of 35 – 37 Solander Street. If condition 2 of that consent should be construed as authorising or requiring 3 visitor car spaces on 35 – 37 Solander Street it does not alter the fact that the concept plans forming part of the strata development contract show a particular driveway and garage arrangement for unit 6 different from that shown in the plans referred to in the Court’s consent (as modified).
167 The applicant’s submissions about the reasons the Court should approve the amendment of the strata development contract were not persuasive.
168 The applicant appeared to assume that s 38 of the Court Act enabled the Court to put to one side the requirements of the Strata Schemes Act. Section 28K(2) of the Strata Schemes Act does not vest discretion in the Court. The Court may only approve an amendment if satisfied a motion has been put to an owners corporation supporting the amendment and defeated, or not dealt within a reasonable time. I accept the respondents’ submissions that the party seeking the amendment must identify the terms of the proposed amendment with reasonable precision. Unless this is done the motion cannot be meaningfully put to or dealt with by a body corporate (or the Court).
169 The Class 2 application referred to an (unspecified) amendment to “address inconsistency” between the concept plans and the Court consent. However, the application did not identify the amendment sought. The applicant provided draft orders during the hearing to the effect that the strata development contract be “read subject to” certain matters. Neither version would result in an amended strata development contract in a form readily capable of being understood. This is important given that an amended strata development contract has to be registered (s 28G) and would be relied upon by future buyers as setting out the rights and obligations of the developer and the proprietors (s 28I). The motions put by the applicant to the owners corporation give rise to similar difficulties. Although dismissed by the applicant as mere technicalities, an amended strata development contract will define future rights and obligations and thus the proposed amendment must be clearly identified. The motions put in this case did not clearly identify the amendment sought. The motion that the owners corporation agree “to such amendment of the strata development contract as is necessary to implement the development consent to DA 1259/2004 to demolish existing structures and construct two villas and two townhouses at 33-37 Solander Street, Monterey, upon approval of any such amendment by Rockdale City Council or the Land & Environment Court” did not identify the amendment in fact required to the contract but left it to each reader to determine for themselves the scope of what might be “necessary”. The principal motion relied on by the applicant (of which notice was given on 27 November 2006 for a meeting on 8 December 2006) was also contingent on approval by the Council or the Court. No such approval had been sought or obtained when the motion was put. Approval of the Court, moreover, could only be obtained if the motion were defeated or not put within a reasonable time. The motion referred to a strata management statement when none exists for strata plan 65404. The motion represented (incorrectly) that the amendment was a development concern when s 28O(2)(b) provides to the contrary. These are not mere technicalities. The applicant also appeared to overlook the fact that no amendment relating to the Court consent as modified on 12 December 2007 has ever been put to the owners’ corporation.
170 The Court has a power to approve an amendment, the effect of which is to remove the requirement for a resolution of the body corporate. The context of the proceedings and the requirements for a motion supporting the amendment to have been defeated or unreasonably delayed, and for service of the application on the persons and bodies nominated in s 28K(3) indicate that an applicant must be responsible for identifying the amendment sought with reasonable precision. The amendment sought means the amendment of the terms of the strata development contract. In the circumstances described above, these statutory requirements have not been satisfied.
171 It follows that the applicant has not satisfied the requirements of s 28K(2). The applicant has not adequately identified the amendment sought. No motion supporting the amendment has been given, put, defeated or delayed. For these reasons, I am not satisfied that the power to approve an amendment of the strata development contract (if it had utility) may be exercised in the applicant’s favour. Even if these pre-conditions to the exercise of the power were satisfied the discretion to approve the amendment should not be exercised in the applicant’s favour in the circumstances described above. Further, the fact that I have determined not to extend the time for conclusion of the development scheme means that there is no utility in approving any amendment to the strata development contract.
The strata development contract
172 The statutory scheme for staged development must be construed as a whole. It is true that the statutory provisions provide for the development of a “parcel” by a “developer” (if the parcel involves a “development lot”) and creation of a “strata scheme” for that parcel. Further, each of these defined terms requires the developer to own the land comprised in the development lot. However, the statutory provisions also provide for the addition of land to a parcel (s 28C(2)(b) and s 28M). Accordingly, a developer may create a development lot from part of the land within the parcel and include in the contract a right to add land to that development lot at some later stage. The fact that the developer may not own the land to be added has consequences but, in my view, invalidity of the strata development contract is not one of them. The consequences are that, first, the developer could not warrant that such land would be added because the developer may never acquire the proprietary rights necessary to do so. The statute deals with this issue by distinguishing between warranted development and authorised proposals. Secondly, the developer might not be able to acquire the necessary proprietary rights to facilitate development of the additional land within a reasonable time. The statute deals with this issue by providing that a strata development contract must nominate a time for conclusion of the development scheme (within 10 years of registration). Once that time is reached the contract ceases to have effect, subject only to the capacity of the Court to order otherwise, and accrued rights and obligations.
173 The concerns raised by the respondent appeared to involve matters of degree. That is, the applicant maintained a thin strip of land within the parcel incapable of any development. The strata development contract provided for the addition of the whole of 33 Solander Street (lot D in deposited plan 10009) to the strata scheme when the applicant did not own that land and had no capacity to make it part of the strata scheme. Section 28M, as the respondents submitted, is a machinery provision. The source of power to add land to a parcel and carry out development thereon is s 28C(2)(b) together with the terms of the strata development contract and s 28I(1). Sections 28C(2) and 28I thus provided the necessary statutory support to enable the developer to register a strata development contract providing for the future incorporation and development of 33 Solander Street as part of the strata scheme. The respondents’ reliance on the 2001 amendments to establish the contrary was misplaced. Those amendments (which introduced non-strata land and ensured development lots could be or include stratum parcels) cannot be used to confine the ordinary meaning of the statutory provisions as in force when the strata development contract was registered.
174 Hence, the consequence of the fact that the applicant did not own 33 Solander Street is not invalidity of the contract. It is that the applicant was not in a position to commence the development on that land before 1 November 2007 in circumstances where the applicant had agreed that the development scheme would be completed by December 2007. This issue has been dealt with above.
175 The respondents’ arguments based on an alleged failure of the strata development contract to comply with s 28M(2)(b) were not sustainable. It is sufficiently clear from the terms of the strata development contract that 33 Solander Street was to be added to development lot 6 (see the second paragraph of cl 6 of the contract). This can only be understood as a proposal for that land to be made part of the additional development lot as provided for in s 28M(2)(b).
176 Similarly, the respondents’ submissions about inadequacy of the concept plans founding invalidity of the contract did not accord with the principles established in decisions such as Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [91] to [93] (see also Smith v Wyong Shire Council (2003) 132 LGERA 148 at [12] to [63]). The concept plans illustrated the required matters referred to in s 28D and the Registrar-General accepted the strata development contract for registration. Any deficiency in the concept plans as relied on by the respondents in this case (for example, by not showing landscaping) would not constitute a breach of the Strata Schemes Act, having the consequence of invalidity of the strata development contract.
177 The respondents’ alternative submissions to the effect that the strata development contract became unenforceable by reason of the applicant’s failure to comply with certain implied terms were unpersuasive. The implied terms on which the respondents relied were not terms implied in fact or law. The strata development contract did not require the applicant to carry out the development in accordance with the 2000 consent. If it is accepted that the strata development contract did not specify all terms of the agreement, then implication of such a term is not necessary for the reasonable or effective operation of the contract (Byrne v Australian Airlines Limited (1995) 185 CLR 410 at 422 citing Hawkins v Clayton (1988) 164 CLR 539 at 573). The other asserted implied terms (that the applicant would carry out the authorised proposals with reasonable expedition and would complete the development of 35 – 37 Solander Street in accordance with the 1998 consent) are inconsistent with the express terms of the contract. Clause 7 provides that the development will be completed by December 2007. Hence, there cannot be an implied term inconsistent with that requirement. Clause 5 identifies warranted development as “nil”. Hence, there cannot be an implied term requiring the applicant to complete the development of 35 – 37 Solander Street in accordance with the 1998 consent.
178 The respondents’ arguments about estoppel, election and waiver were unconvincing other than in one possible respect. Insofar as the respondents relied on the applicant’s conduct before purchase of the units in 2001, the key representations (to Mr and Mrs Jones) were equivocal and did not exclude the development of stage 2 in accordance with the contract. Accordingly, it is unnecessary to resolve the factual dispute about whether these representations were made or not. Insofar as the respondents relied on the applicant’s conduct after the purchase of the units, the evidence did not disclose reliance or a change of position by the respondents such as to found an estoppel. The applicant did permit the 2000 consent to lapse but lapse of a consent does not prevent another consent from being obtained and thus cannot found the asserted estoppel, election or waiver. The application to re-apportion the strata levies was also equivocal and did not involve any election between inconsistent rights. None of the other conduct relied on by the applicants constituted a sufficiently clear representation or election. The one possible exception may be the manner in which the applicant proceeded to obtain the development consent in the Class 1 appeal in July 2006 (in which the applicant expressly excluded any attempt to obtain development consent relating to development on 35 – 37 Solander Street).
179 Given the time for conclusion of the development scheme (December 2007), did the applicant’s exclusion from the 2004 development application of any development on 35 – 37 Solander Street amount to an election or waiver of rights under the strata development contract? I am not satisfied that an affirmative answer should be given to this question because of the lack of any necessary inconsistency between the rights involved. In other words, the pursuit of the 2004 development application in that form was not necessarily inconsistent with the enforcement of rights under the strata development contract (Sargent v ASL Developments Limited (1974) 131 CLR 634 at 641 – 642).
180 The dispute about rights and obligations under the strata development contract involves hypothetical questions because the only matter with which the contract deals is development of 33 Solander Street and that development cannot be completed before 31 December 2007 (see above). Accordingly, it is sufficient to observe that: (i) the contract provides that access (which, in context, must mean access for construction) is generally to be from Solander Street. This should be construed in the context of the attached concept plans providing a second driveway crossing into 33 Solander Street. In other words, construction access using the driveway into 35 – 37 Solander Street was not authorised under the contract, (ii) I have dealt above with the differences between the concept plans attached to the strata development contract and the plans referred to in the consent granted by the Court on 3 July 2006 (as modified) and sought by the applicant to be the subject of an amendment to the contract. The contract does not authorise the carrying out of that different development. Hence, amendment to the strata development contract would have been required to authorise that development, (iii) the applicant did not take any proceedings to compel the owners corporation to provide owner’s consent to the 2004 development application (presumably because he considered that he had validly granted all required consents). It is not necessary or appropriate to determine these issues for the reasons given above. This is particularly so when it is recognised that the obligations of the respondents were limited to the development constituting the authorised proposals in accordance with the strata development contract and did not extend to any amendment of that contract, and (iv) the strata development contract provides for the consolidation of 33 Solander Street with development lot 6 and its subsequent subdivision into four lots.
181 I am satisfied that declarations and orders sought by the applicant in paragraphs 1, 1A to 1D, 4 and 5 of the amended Class 4 application should not be made. The relief sought in those paragraphs depends on: - (i) the continued existence of the strata development contract (paragraph 1) when the contract will cease to have effect on 31 December 2007, and/or (ii) an amendment of the strata development contract that has not been approved by the Court (paragraphs 1A to 1D, 4 and 5). Moreover, and at least insofar as the paragraphs depend on an amendment to the strata development contract, the evidence does not support any inference that the respondents would do other than abide by the outcome of the Court proceedings on the application for the amendment. It is not necessary to deal with the respondents’ other submissions about the declarations and orders (involving matters that would generally be described as equitable defences).
182 Insofar as paragraph 2 of the amended Class 4 application is concerned, the declaration is unclear and ambiguous and should not be made for this reason. It is not clear whether the declaration relates to some past or anticipated future conduct of the respondents. For example, the cross-references to paragraphs 1A to 1D involve references to the consent granted by the Court (which cannot be implemented unless the strata development contract is amended). Further, there is no claim for damages in the proceedings.
183 With respect to paragraph 3 of the amended Class 4 application, I am not satisfied that there is any present dispute between the applicant and respondents. The applicant and respondents both appear to have believed that the schedule of unit entitlements regulated obligations for payment of contributions to common property expenses (which explains the proceedings in the CTTT). The respondents acknowledged that if the strata development contract is valid cl 6(x) should have effect according to its terms for the duration of the contract (namely, that no contribution is payable by the developer in respect of development lots which have not been subdivided and developed). The declaration in paragraph 3 is otherwise inappropriate because it does not refer to the term of the contract but appears to operate at large.
F. Conclusion and orders
184 For the reasons given above: - (i) the time for conclusion of the development scheme in the strata development contract should not be extended, (ii) amendment of the strata development contract should not be approved as sought by the applicant, and (iii) declarations and orders as set out in the amended Class 4 application should not be made. Accordingly, the orders of the Court are as follows:
Proceedings No 20096 of 2007
(1) The application is dismissed.
(3) Any application for costs is to be made by notice of motion within 28 days.(2) The exhibits are returned.
Proceedings No 40097 of 2007
(1) The application is dismissed.
(3) Any application for costs is to be made by notice of motion within 28 days.(2) The exhibits are returned.
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