Nursing and Midwifery Board of Australia v Fankhauser
[2013] QCAT 39
•23 January 2013
| CITATION: | Thorneton Avenue Pty Ltd v Body Corporate for the Avenue [2013] QCAT 39 |
| PARTIES: | Thorneton Avenue Pty Ltd (Applicant) |
| v | |
| Body Corporate for the Avenue CTS 19609 (Respondent) |
| APPLICATION NUMBER: | OCL155-10 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | 2 and 3 April, 18 May 2012 |
| HEARD AT: | Brisbane |
| DECISION OF: | Dr J R Forbes, Member |
| DELIVERED ON: | 23 January 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | The Tribunal declares: 1. The Applicant, Thorneton Avenue Pty Ltd, is entitled to a market remuneration review for the year 5 April 2009 to 4 April 2010, to be determined by a valuer in accordance with Clauses 4 and 1.1(o) of the subject agreement. 2. The duties of Thorneton Avenue Pty Ltd, with respect to the mowing and maintenance of lawns at “The Avenues”, Morayfield, are limited to common property areas, unless and until the parties, for valuable consideration, otherwise agree. The Tribunal orders that: 3. The parties file and serve, by 4 pm on Monday 18 February 2013, minutes of any further orders required to implement this decision. 4. if the parties do not agree to a valuer according to Clause 1.1(o) of the subject agreement by 4 pm on Monday 25 February 2013 they shall, within seven (7) days thereafter, apply to the President of the Real Estate Institute of Queensland to appoint a valuer pursuant to that clause. 5. The issues of costs and interest claimed are reserved until such time as a value is determined by a valuer in accordance with Clause 1.1(o) of the subject agreement. |
| CATCHWORDS: | REAL PROPERTY – STRATA AND RELATED TITLES – MANAGEMENT AND CONTROL – OTHER MATTERS – where the caretaker requested a market review of its remuneration under the contract – where the body corporate refused – where body corporate claimed previous caretaker had already exercised right to market review – where body corporate claimed caretaker failed to maintain lawn areas in accordance with representations – where the body corporate claimed waiver – where the body corporate claimed estoppel – whether the caretaker is entitled to a market review of remuneration under the contract – whether caretaker was required to carry out maintenance in accordance with warranty – whether caretaker was required to carry out maintenance in accordance with collateral contract Body Corporate and Community Management Act 1997, s 133 Accurate Financial Consultants Pty Ltd v Koko Black Pty Ltd [2008] VSCA 86 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mr S B Whitten instructed by MacDonald Balanda |
| RESPONDENT: | Mr M J Kleinschmidt of MacGillivrays (Day 1 and 2) Mr N M Cook instructed by MacGillivrays (Day 3) |
REASONS FOR DECISION
This dispute comes before the Tribunal according to the Body Corporate and Community Management Act 1997 (the “BCCMA”)[1].
[1] BCCMA, s 133.
The Applicant (“Thorneton”) is caretaker of The Avenues, a townhouse complex of 104 units at Morayfield, near Brisbane, administered by the Respondent (“the BC”). Thorneton has held that position since 2 November 2009, when it succeeded Gerald Joseph and Robyn Anne Godwin (the Godwins).
Thorneton contends that it is entitled to a market review of its remuneration (an “MR”) from 5 April 2009, payable from 2 November 2009 (“the salary issue”).
The application, filed on 1 October 2010, seeks this relief:
a)that the remuneration paid by [BC] to [Thorneton] for the year 5 April 2009 to 4 April 2010 be increased to Market Remuneration as defined in the caretaking agreement;
b)that the remuneration paid by [BC] to [Thorneton] for the year 5 April 2010 to 4 April 2011 be the Market Remuneration for the previous year increased by the same percentage of the previous year’s remuneration as the last percentage increase in the CPI as last recorded by the Commonwealth Statistician in 2009;
c)that the [BC] pay [Thorneton’s] costs of and incidental to this application;
d)that the [BC] pay interest at the rate of 10% per annum pursuant to the Supreme Court Act 1995 on such part of [Thorneton’s] remuneration for the period from 5 April 2009 that, as a consequence of the orders sought has been outstanding from time to time.
The BC’s position is that Thorneton is not entitled to any of the above relief, and the BC counterclaims:
a)a declaration[2] that the mowing and maintenance of all lawns in open areas, not fenced in, whether or not such areas are on common property, forms part of the caretaking duties under the caretaking agreement;
b)an order that [Thorneton] continue to mow and maintain all lawns in open areas, not fenced in, whether or not such areas are on common property;
c)in the alternative, that [Thorneton’s] remuneration pursuant to the caretaking agreement be reduced to reflect mowing and maintenance of lawns on common property areas only.
[2]At the time of the hearing, the general rule was that only judicial members could grant declaratory relief: Queensland Civil and Administrative Tribunal Act 2009 (“QCAT Act”), s 60(5), as it then was. However, that subsection was recently amended by the Guardianship and Administration and Other Legislation Amendment Act 2012 to enable declarations to be made by legally qualified members. The effect of procedural legislation is retrospective, unless otherwise provided: Cardile v Nominal Defendant [1978] Qd R 132; Rodway v The Queen (1990) 169 CLR 515.
This matter was heard on 2 and 3 April and 18 May 2012. Written submissions were due to be filed on 15 June, 6 July and 13 July 2012. However, extensions of time were granted, and the final set of submissions ordered on 18 May 2012 arrived on 15 October 2012.
On 10 November 2012 Thorneton filed a document entitled “Response to the Respondent’s Submissions in Reply”, without any order to do so. The Respondent objects to that procedure.[3] I uphold the objection. The principle sit finis litium applies with equal force to submissions. The rules of natural justice do not require the Tribunal to receive as many submissions as a party chooses to submit before a decision is made.[4]
[3] Respondent’s submissions 10 December 2012, paragraphs 31-33.
[4]Semunigus v Minister for Immigration and Multicultural Affairs (2000) 96 FCR 533 at [20].
By a direction issued on 25 October 2012 the parties were ordered to file submissions with respect to Clause 1.1(o) of the subject agreement. Each has done so.
Thorneton replaces the Godwins
On 15 September 2009 the Godwins agreed to assign their caretaking agreement (“the contract”) to Thorneton, subject to the BC’s consent.
On 21 October 2009 an informal “meeting and greeting” was attended by members of the BC committee and representatives of Thorneton. The meeting was to assist the BC committee to decide whether it would consent to the Godwins-Thorneton assignment. Later the same day it decided, by majority, to do so, and the change of caretakers was formalised by a multi-partite deed executed on 2 November 2009.[5]
[5] Exhibit 2, attachment 21.
According to witnesses for the BC the “meeting and greeting” was not an entirely harmonious affair. The then chairman of the committee, Micheline Ratcliffe, recorded some uneasy impressions of the newcomers. ‘If they get in, it will be a miserable place to live, and if they don’t there will be hell to pay methinks.’[6]She regretted the imminent end of the easy-going[7] Godwin era. ‘We live in a happy community ... we would like it to stay that way ... But will it?’[8]
[6]Exhibit 21: email Ratcliffe to Michael Wylie (manager of The Avenues) 25 October 2009.
[7] Exhibit 21, memo of Ratcliffe ‘Following this meeting the BCC has issues ...’
[8] Exhibit 21, memo ‘Following this meeting the BCC has issues ...’ Item 12.
Another of Ratcliffe’s notes might well serve as a leitmotif of these proceedings: ‘We have come here to run a business, not to make friends.’[9]
[9]Exhibit 21, memo by Ratcliffe: ‘Snippets of the Interview with the New RUMS on 21.10.2009’ – recording a remark by one of the “new RUMS”.
In days following the “meeting and greeting” event members of the BC considered retreating from the decision to allow the assignment, but on 2 November 2009, on legal advice[10], they formalised it.
[10] Transcript 6.470, 6.472 (Wylie).
The Remuneration Issue arises
Two days later, Thorneton’s solicitors wrote to the BC:
We note that pursuant to the Caretaking Agreement dated 26 June 2004 ... it is noted [sic] that a Market Remuneration Review was due to occur on 5 April 2009.
We are instructed by our client that they wish to invoke the Market Review pursuant to the Caretaking Agreement. ... In this regard we enclose submissions ... It is apparent from both the submissions and the comparison of buildings that the current remuneration paid for The Avenues is substantially well (sic) below market ... [W]e propose that ... the current remuneration[11] be increased to $110,000 per annum plus GST.[12]
[11] Then $77,392.63 per annum.
[12] Letter Thorneton’s solicitors to BC, 4 November 2009: Exhibit 2 attachment 22.
That proposal was submitted to the BC’s Annual General Meeting on 25 February 2010; it was rejected by 36 votes to 4.[13]
[13] Minutes of AGM 25 February 2010, item 5.
The issue was joined.
The contract envisages two distinct ways in which the caretaker’s remuneration may be increased. Clause 4.1 enables a five-yearly review of “market remuneration”. Clause 4.2 envisages an annual, automatic “CPI increase” ‘when there is not a review of the Remuneration under Clause 4.1’.
“Market remuneration” is defined as follows:
Such remuneration as shall be determined by the President for the time being of the Real Estate Institute of Queensland or his or her nominee, or such other person as agreed by the parties, as being the appropriate remuneration payable to the caretaker having regard to the remuneration payable to other persons in similar positions to the caretaker.[14]
[14] Clause 1.1(o).
Thorneton’s contention is that it is entitled to an MR assessed on 5 April 2009[15], payable from 2 November 2009 (when it replaced the Godwins).
[15]That date, but not the BC’s liability to proceed with a market adjustment thereon, is common ground: Application Part D paragraph 5; Response paragraph 1.
The BC rejects that claim on several alternative grounds:
a)that an adjustment in favour of the Godwins in December 2008 discharged the duty to conduct an MR as at April 2009;
b)alternatively, that the Godwins waived the right to an MR as at April 2009;
c)alternatively, that the Godwins were, and Thorneton is estopped from seeking any MR due as at April 2009.
On the third and final day of the hearing, the BC sought leave to introduce a Further Amended Response, raising yet another defence, namely a novation. The application to amend was refused.[16] While the Tribunal is not bound by the rules of evidence or practices of the courts[17] it is certainly not forbidden to do so. Indeed, the demands of natural justice[18] may require it to do so. Major amendments on the final day of a three-day hearing would have necessitated a lengthy adjournment (prolonged by scheduling difficulties), as well as substantial amendments to Thorneton’s pleadings, and considerable additions to each party’s costs.
[16]Transcript of hearing page 239; Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 at [104]-[110]; Cormie v Orchard [2001] QCA 546 at [25]; Sandvik Mining and Construction Australia Pty Ltd v Dempsey Australia Pty Ltd [2012] QSC 102; Bellingen Shire Council v Colavon Pty Ltd [2012] NSWCA 34.
[17] QCAT Act. s 28(3)(b).
[18]QCAT Act, s 28(3)(a); R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott (1933) 50 CLR 228 at 256; Consolidated Press Holdings Ltd v Wheeler (1992) 84 NTR 42.
On two occasions in September 2009 Thorneton asked the Godwins to invoke the April MR,[19] but without success. It is common ground that the BC was not advised of those requests, but clearly Thorneton intended it to be.[20] On the first occasion, Godwins’ solicitors replied:
Our clients do not agree to implement a market review. [They] say that a market review at this time would not lead to any or any significant increase ... and may be counterproductive in that it may cause concern with the committee and the body corporate. Our clients say that the remuneration is fair and reasonable having regard to the duties as was set [sic] by an independent expert only a year ago. The writer has spoken to that expert who confirms that the only change that would occur if the matter was reviewed today would be an increase in the hourly rate which is likely to be reflective of CPI increase only.[21]
[19]Thorneton’s solicitors to solicitors for Godwins, 3 September 2009, Exhibit 7 attachment “K”; Thorneton’s solicitors to solicitors for Godwins, 30 September 2009, Exhibit 2 attachment 12.
[20]Letter Thorneton’s solicitors to Godwins’ 30 September 2009 – ‘Our client ... would like your clients’ assistance in putting forward [our] submissions to the Body Corporate.’
[21]Letter Godwins’ solicitors to Thorneton’s solicitors 8 September 2009; Exhibit 7 Attachment “L”.
In response to the second request, Godwins’ solicitors wrote:
As you are aware, our clients were granted a review last year and, consequently, they believe that it would be more appropriate for any additional review request to be instigated by your clients once they are established as the building managers.[22]
[22]Letter Godwin’s solicitors to Thorneton’s solicitors 6 October 2009; Exhibit 2 attachment 14.
It is common ground[23] that a right to an MR accrued on 5 April 2005, and survived until at least 8 December 2009. But on this aspect of the case, the BC says that it was discharged on that date, when, pursuant to Clause 4.1(a) of the Contract, Godwins accepted a CPI increase in lieu of an MR under Clause 4.1(b).
[23]Transcript 6.1581 (Ratcliffe). Thorneton’s submissions 14 December 2012 at [12]; BC’s submissions 24 December 2012 at [28].
The Defence of Performance or Discharge[24]
[24] Amended Response and Counter-Application paragraph 7(a).
Clause 4.1(a) provides:
The Remuneration will be increased on the Market Adjustment Dates ... by such amount agreed on by the parties within 30 days after each Market Adjustment Date.
Clause 4.1(b) prescribes a mechanism for resolving the question in the absence of agreement. It is unnecessary to discuss Clause 4.1(b) at this stage.
According to the BC the Clause 4.1(a) agreement on which it relies is to be found in a letter from Teys (Sunshine Coast) Pty Ltd, manager of the complex, to the Godwins on 3 December 2008, endorsed with a “confirmation” signed by the Godwins on 8 December 2009 (“the December Document”). Materially, Teys’ letter reads:
Re: Body Corporate for The Avenues CTS 19609 Resident Manager Remuneration. We refer to the above and advise that your remuneration in accordance with the above named agreement is due for adjustment as from 1 December 2008. Please see the attached worksheet for our calculations. Please sign and return ... Your payments will be due on the 1 of each month for the period preceding. Please forward a tax invoice each month ... made out to Body Corporate for The Avenues ... for ... $7,094.32.[25]
[25] Exhibit 2 attachments page 112.
Attached to that letter is a schedule of CPI movements for a weighted average of eight capital cities and a second sheet[26] marked “Index No. Brisbane All Groups CPI September 2008- 170.8”, followed by a “Calculation in accordance with Schedule One (Management Agreement)” and a notification of “Rates for 2008/2009” as $77,392.63 per annum. Immediately below that note, this sentence appears: ‘I confirm that these figures have been calculated in accordance with our agreement and accept the calculations as submitted’.
[26] Exhibit 2 attachments page 114.
Two signatures follow; it is undisputed that they are the signatures of Mr and Mrs Godwin.
In the December Document there is no reference to Clause 4.1(a) or to any agreement pursuant to that sub-clause. Manifestly, if the December Document purports to be a Clause 4.1(a) agreement, it is not one that was made within 30 days after the Market Date (5 April 2009).[27]
[27]Pace the BC’s argument that the 30 day limit is unsuitable, if not unworkable, that is what the Contract provides.
It is Thorneton’s case that the December Document does not evidence a Clause 4.1(a) agreement, but merely an annual CPI adjustment according to the formula in Clause 4.2 of the Contract:
When there is not a review of the Remuneration under clause 4.1, the Remuneration will be increased on each anniversary of the Commencement Date [30 November 2007] ... by the same percentage of the previous year’s Remuneration as the last percentage increase in the CPI or one year as last recorded by the Commonwealth Statistician immediately before the year in which the Remuneration is to be reviewed, subject to Clause 4.3 [backdating to relevant adjustment date].
I note that when the Godwins had the benefit of a “special”[28] review backdated to 1 December 2007, the relevant “rates sheet” was marked “New rate as per BMCS report”, with no reference to CPI data.[29] But as noted above, the December Document says nothing of any prior agreement, or any event other than movements in the CPI.
[28] In recognition of a significant enlargement of “The Avenues”.
[29] Exhibit 2 attachment 9.
It would be surprising if a MR, as distinct from an annual CPI adjustment, were left to the BC’s manager (Michael Wylie), rather than to the BC committee or a general meeting.[30] The BC’s response to this suggestion is that the December Document did not involve a “discretionary” decision. But if, as claimed by the BC, that document effected an MR, it was preceded by a discretionary agreement to treat the CPI amount as an appropriate market review increase. The BC says that Michael Wylie could have been cross-examined about the scope of his authority, but this overlooks the principle that an alleged agent cannot raise himself by his own bootlaces; his professions of authority are not evidence that he possesses it.[31]
[30]Transcript 6.1598 (Ratcliffe) ‘I don’t recall that that is something that our Body Corporate managers would handle’.
[31]Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 at 501-502; Land Enviro Corp Pty Limited v HTT Huntley Heritage Pty Limited [2012] NSWSC 382 at [988]; J Wright Enterprises Pty Ltd (In Liquidation) v Port Ballidu Pty Ltd [2010] QSC 213 at [69].
Presented by the BC with a December Document that is, at best, ambiguous, it is pertinent to examine the circumstances of its creation.
Robyn Godwin,[32] cross-examined, was asked whether she was satisfied with ‘the CPI increase’. She answered ‘We’d received a CPI increase the previous year ... there was a CPI increase at the end of 2007 and then at the end of 2008’.[33]
[32]Her husband did not give oral evidence, but it was accepted that Mrs Godwin spoke for both of them.
[33] Transcript 3.351.
Specifically, when asked was she content with a CPI increase for the period December 2008 to November 2009? She answered ‘As the normal CPI increase, which happens each year, yes’.[34]
[34] Transcript 3.357.
Neither response suggests that the December Document signified anything to the Godwins other than an annual CPI increase, determined not by negotiation or independent valuation, but according to a formula mandated by Clause 4.2. According to Mrs Godwin, neither she nor her husband ever agreed to refrain from claiming the 2009 MR.[35]
[35] Transcript 3.706.
Robyn Godwin impressed as an honest and generally reliable witness, albeit somewhat diffident, and averse to assertive disputation. However, when invited to conflate an MR with a routine CPI adjustment, she demurred ‘[A] market review I guess is a separate thing. I would take it to be a separate thing between CPI and market review’.[36]
[36] Transcript 3.702.
The BC submits that not once have the Godwins agreed with the proposition that the 5 April 2009 review is able to be invoked.[37] That is clearly incorrect. The Godwins instructed their solicitors to tell Thorneton to activate the MR itself.[38] Mrs Godwin said repeatedly, expressly or by implication, that they chose not to pursue the MR review, simply because they were satisfied with the December 2008 CPI increase.[39] Indeed, at one point she said ‘If we had stayed in the management rights we probably would have requested another review but it was up to the incoming purchasers’.[40]
[37] BC submissions 12 October 2012, paragraph 48.
[38] Transcript 3.503.
[39]See eg Statement (one page) 1 August 2011 paragraph 3, Statement 1 August 2011 (3 pages) paragraph 9, Transcript 3.522, 3.568, 3.572, 3.595, 3.684, 3.756.
[40] Transcript 3.522.
It appears that all of Robyn Godwin’s statements that she and her husband would not have sought an MR in April 2009 were made after Thorneton claimed it in November 2009. It is true that she said as much to Michael Wylie before that time, but he is adamant that any such statement was made after the assignment was completed.[41] Ratcliffe’s evidence is to the same effect.[42] They were, then, retrospective statements, possibly intended to “distance” the retiring and non-combative Godwins from what had become a vexed issue between the BC and newcomers. At all events those statements did not suggest that the right had been bargained away, but merely that the Godwins would probably not have bothered to use it.
[41] Transcript 6.397, 6.408-6.412.
[42] Transcript 6.1622-6.1629, 6.1683, 6.1685.
The first record of the Godwins’ attitude to the April 2009 MR is in their solicitors’ letters to Thorneton in September 2009. Those documents do not suggest that the right has already been exercised. On the contrary they invite, indeed encourage, Thorneton to seek an MR as soon as it is in a position to do so. At that time, long before the abovementioned statements to Ratcliffe and Wylie, the two reasons given for their inaction are, first, expert advice that an MR would profit them little, and second, that they are on the way out. ‘[I]t was up to the incoming purchasers ... We were selling the business.’[43]In those circumstances it is perfectly understandable that the Godwins would rest content with the latest CPI rise, and eschew the delay, expense and uncertainty of a Clause 4.1 assessment.
[43] Transcript 3.522.
Micheline Ratcliffe, who chaired the BC committee from February 2009 to February 2010, declared that, so far as she was aware, the BC never denied that the Contract provided for an MR request on or after 5 April 2009.[44] So far as she was concerned, it was available.[45] The Godwins never suggested to her that they had no right to an MR in 2009.[46] To the best of her knowledge, the BC did not ask the Godwins, in the light of the December Document, whether they proposed to seek that review.[47]
[44] Transcript 6.1581.
[45] Transcript 6.1567.
[46] Transcript 6.1705, ‘Nothing like that, no. They didn’t say anything like that.’
[47] Transcript 6.1594.
Donald Watts, who succeeded Ratcliffe as BC chairman in February 2010, was pressed to explain the BC’s reasons for rejecting Thorneton’s application for an MR. A perusal of the transcript[48] suffices to show that he was repeatedly evasive and occasionally truculent. After a deal of evasion, he could only say that the amount claimed was rejected because it was outrageous.[49] He conceded that he saw no document from the Godwins stating that they would not take advantage of the 2009 review.[50] Watts did not suggest that he, or to his knowledge, any other member of the BC had reason to believe that the MR was not available. He was not a satisfactory witness.
[48] Transcript 4.301 ff.
[49] Transcript 4.510-4.516.
[50] Transcript 4.1426.
The reality appears to be that, prior to 4 November 2009, the BC committee’s contemplation of the right to an April 2009 MR was even less acute and businesslike than the Godwins’. The latter were reminded of it in September 2009 – on the verge of their departure – but, as for the BC:
Mr Whitten: ... Prior to the 2nd of [November] 2009 the Godwins had not said anything to you, to the Committee, to the Body Corporate Manager ... that they had not intended to activate the market review?
Ms Ratcliffe: It wasn’t mentioned, no.
Mr Whitten: ... In fact there was no mention of it all [of] the market review clause and it being on the 5th of April 2009 at any time between 8 December 2008 and 2nd November 2009 was [there]?
Ms Ratcliffe: No.
Mr Whitten: In fact it was the case, was it not, that the Body Corporate ... merely did not turn its mind to whether or not the market review on 5th April 2009 was ever going to be activated?
Ms Ratcliffe: Yes. ... because they didn’t mention it.
Mr Whitten: There wasn’t a thought about it, was there?
Ms Ratcliffe: No.
The onus of establishing its several defences is upon the BC. It is not for Thorneton to prove negatives. The BC has not persuaded me, on the balance of probabilities, that the December Document effected a Market Remuneration review, or amounted to performance of Clause 4.1 of the Contract. I reject that defence.
I turn now to the defence of waiver.
Waiver
The BC alleges that the Godwins waived their right to an MR in April 2009, by their acceptance of the December Document.[51]
[51] Amended Response and Counter-Application paragraph 7(b).
In legal parlance, “waiver” is a notoriously imprecise word, sometimes described as “a substitute for thought”, or “a cloak that covers a multitude of sins”.[52] There is waiver of privilege, waiver of a right to a hearing or procedural right, and waiver of a contractual right. In the latter sense it is ‘best understood as a genus comprising consent, estoppel and acquiescence.’[53] Clarity of doctrine is not advanced by Commonwealth v Verwayen[54], in which two members of the majority (Toohey and Gaudron JJ) relied on waiver, and two (Deane and Dawson JJ) upon estoppel. Waiver is often used as a synonym of estoppel; indeed, it has been suggested that they are indistinguishable.[55] However:
The better view is that a mere indication of an intention not to rely upon contractual rights will not generally constitute a waiver sufficient to bar a future action to enforce such rights. Waiver should not be seen as an alternative weapon to estoppel in the war against the doctrine of consideration.[56]
[52]Mann v Carnell (1999) 201 CLR 1 at [28]; Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570 at [49]-[55].
[53] Byrnes v Kendle (2011) 243 CLR 253 at [74].
[54] (1990) 170 CLR 394.
[55]Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570 at [51]; Kostopoulos v GE Commercial Finance Australia Pty Ltd [2005] QCA 311 at [36].
[56]Freshmark Ltd v Mercantile Mutual Insurance (Australia) Ltd [1994] 2 Qd R 390 at 403 per Dowsett J, cited with approval in Kostopoulos, above, at [40].
Property unused is not property abandoned. Robyn Godwin never regarded the right as lost[57] stating ‘We never opted to waive it, we just decided that we wouldn’t go ahead with it’.[58]
[57] Transcript 3.508.
[58] Transcript 3.568, 3.756. Statement (3 pages) 1 August 2011.
The Godwins never discussed the April 2009 MR with the BC before 2 November 2009. They believed that they were entitled to it, but did not pursue it because they were selling the business. Had they stayed, they might have done so.[59] It was not until June or July 2009 that they were reminded of the right.[60] Clearly they could not waive, in December 2008, a right of which they were not then aware. According to Ratcliffe, whose evidence on this point I accept, no representative of the BC asked the Godwins in December 2008 whether they intended to seek an MR in April 2009.[61] So far as Ratcliffe is aware, there was no mention of the MR at any time between 8 December 2008 (the date of the December Document) and 2 November 2009 (when Godwins ceased to be parties to the contract).[62] The BC simply did not think about it.[63] As noted above, the Godwins did not tell Ratcliffe that they intended to let the opportunity pass until after Thorneton replaced them.[64] According to Wylie, Robyn Godwin’s remark to him about not invoking the MR was “definitely” made after the assignment to Thorneton.[65]
[59] Transcript 3,522, 3.524.
[60]Statement (one page) 1 August 2011 paragraph 4; statement 21 March 2012 Paragraphs 4 and 5; Transcript 3.762.
[61] Transcript 6.1594.
[62] Transcript 6.1629.
[63] Transcript 6.1631.
[64] Transcript 6.1623, 6.1625.
[65] Statement 28 March 2012, Transcript 6.407-6.412.
At one stage Ratcliffe did claim that Robyn Godwin told her that she was aware of an MR review opportunity in April 2009 but ‘opted to waive it’.[66] But immediately afterwards, she conceded that the conversation was after the Godwins left office,[67] and resiled from her use of the word “waive”:
Mr Whitten: I put it to you that they did not say `but we opted to waive’.
Ms Ratcliffe: They may not have used the word waive but they – my equivalent of the word waive would be we chose not to activate it or words to that effect. Something about not wanting it because they had just received back pay.
Mr Whitten: So where did the words waive come from?
Ms Ratcliffe: Me – my definition of we chose not to activate was to waive something. Once again I am not a lawyer. I may have misused the word.[68]
[66] Transcript 6.1687.
[67] Transcript 6.1687.
[68] Transcript 6.1688-6.1691.
But even if the magic word was used, there is no evidence that it was uttered before the Godwins ceased to be parties to the contract, and no longer had rights under it that they could either assert or waive.
Chairman Watts grudgingly admitted that he could not refer to any evidence of waiver at a time when the Godwins might have taken that step.[69]
[69] Transcript 4.1405-4.1430.
Accordingly I find that there is no evidence that the Godwins waived the right to the April 2009 review – or even mentioned a probability that they would not take advantage of it – at any time when they had the power to do so. I reject the defence of waiver.
The Estoppel Defence (i) Godwins’ Conduct
It is alleged that the December Document amounts to a representation by the Godwins to the BC that they would not seek a market review of remuneration on or from 5 April 2009, that they intended the BC to rely on that representation, that the BC was induced to do so, and that consequently the BC suffered detriment by becoming party to the December Document.[70] I interpret these allegations as a plea of promissory estoppel, as confirmed in Australian law in Legione v Hateley.[71]
[70] Amended Response and Counter-Application paragraphs 7(c)-10.
[71] (1983) 152 CLR 406.
I have already found that the December Document was nothing more than an annual CPI adjustment, according to Clause 4.2 of the Contract.
It follows that the Godwins did not make the representation alleged, and, further, that the BC did not suffer the detriment alleged, as the December Document was merely a performance of an obligation imposed on the BC by Clause 4.2 of the Contract.
Therefore I am not satisfied that the plea of estoppel against the Godwins is established. I reject it.
The Estoppel Defence (ii) Thorneton’s Conduct
This defence depends on allegations that:
a) the Godwins are estopped for the reasons set out above;
b) the Godwins were paid according to the December Document;
c)the Godwins did not seek a market review on or from 5 April 2009;
d) in the premises the Godwins intended the BC to expect that they would not seek any such market review;
e) the BC was thereby induced to hold that expectation;
f) acting on that expectation, the BC altered its position by paying the Godwins according to the December Document.[72]
[72]Amended Response and Counter-Application paragraphs 13(b)(iii), 7(c), 8, 9, 10 and 11(b).
Suffice it to say that I have found that no estoppel arose against the Godwins. Therefore I need not explore the suggestion that one party’s unconscionability should be attributed to another. This defence must fail.
Determination of the Remuneration Issue
I find that Thorneton is entitled to seek a market remuneration review for the year 5 April 2009 to 4 April 2010, in accordance with the contract.
The Mowing and Maintenance Issue
By way of counter-application the BC alleges that the Contract requires Thorneton to mow all the areas in front of units in “The Avenues”, whether they are common or private property, without additional remuneration for doing so.
Prima facie the mowing and maintenance duties of the caretaker are limited to lawns on “common property”,[73] as defined by the BCCMA. That Act defines common property as:
… effectively, freehold land forming part of the scheme land but not forming part of a lot included in the scheme.[74]
[73] Contract Clauses 1.1(f), 3.1, 3.3(b), 5.5.
[74] BCCMA, s 10(2) (Note).
However, the BC alleges and relies on a warranty by Peter Hales, for Thorneton, in an email to Wylie dated 22 October 2009, to the effect that Thorneton would mow all of the lawns in front of individual lots, whether they were common property or not.[75]
[75] Amended Response and Counter-Application paragraph 20.
It is further alleged that on 16 December 2009 the BC committee resolved that all grounds outside the building and fence line were deemed to be common property.[76]
[76] Amended Response and Counter-Application paragraph 22.
The resolution just mentioned suggests a certain lack of confidence in the plea based on the email of 22 October 2009. Be that as it may, the resolution amounts to a unilateral and invalid attempt to amend Clauses 1.1(f), 3.1, 3.3(b) and 5.5 of the Contract.
It is not clear whether the alleged “warranty” of 22 October 2009 refers to a collateral contract or a promissory estoppel (collateral contract is not specifically pleaded). If a collateral contract is relied on, the consideration for it is not apparent, as the BC decided on 21 October 2009, on legal advice, that it was bound to consent to the Godwins-Thorneton assignment, and resolved to do so that day. The deed of assignment executed on 2 November 2009 simply formalised the decision made on 21 October 2009, from which the BC never resiled.
A further difficulty confronting a collateral contract argument is that the alleged warranty of 22 October 2009 plainly contradicts Clauses 3.1, 3(b) and 5.5 of the contract, and the definition of “common property” in Clause 1.1(f) and the BCCMA. It is settled law that a collateral contract or warranty may not contradict the principal agreement that it purports to augment.[77]
[77]Hoyt’s Pty Ltd v Spencer (1919) 27 CLR 133; Maybury v Atlantic Union Oil Co Ltd (1953) 89 CLR 507; Redevelopments Pty Ltd v Enima Pty Ltd [2010] ACTCA 13 at [46].
On the other hand, the alleged “warranty” may be an appeal to promissory estoppel, although in this instance several elements of that doctrine are not pleaded. However, treating it as a reliance upon estoppel, I consider that the submission fails, on several reasons. First, there was no reliance upon Hales’ email in resolving to allow the assignment. Second, if there had been reliance, it would not have been reasonable. Third, assuming (without conceding) reasonable reliance, no detriment to the BC ensued. Fourth, even if an estoppel arose on 22 October 2009 and operated for some time, the representation or promise in question was capable of revocation, and was in fact revoked.
Was there reliance?
It is undisputed that, on 22 October 2009 Hales sent an email to Wylie which includes this unqualified statement:
[T]he four of us are happy to continue the mowing of all the areas in front of the individual lots whether they be on title or common property and we will not ask for additional remuneration for doing so.[78]
[78] Exhibit 2 attachment 17.
But by the time Hales’ email was received, the committee had resolved to consent to the assignment.[79] Manifestly the BC did not rely on it in arriving at a decision that was never rescinded.
[79] Minutes of Committee meeting, 10 am 21 October 2009; Exhibit 2 attachment 20.
If Reliance, was it reasonable?
Reliance upon a representation, however unequivocal, must be reasonable.[80]
[80]Accurate Financial Consultants Pty Ltd v Koko Black Pty Ltd [2008] VSCA 86; Wort v Whitsunday Shire Council [2001] QCA 344.
At the “meet and greet” gathering on 21 October 2009 Hales (for Thorneton) was quick to make the point that the caretaker’s mowing duties were limited to common property. He drew the meeting’s attention to the fact that the lawns comprised an uncertain amount of private as well as common property. For the time being Thorneton would continue Godwins’ practice of tending all unfenced lawns, but there should be a survey, followed by negotiations about extra remuneration.[81]
[81] Transcript 3.124.
Ratcliffe, the then chairman of the BC committee, was sufficiently impressed by Hales announcement, including his proviso, to make and send to the manager, Wylie, contemporary notes including:
What about the mowing then? (After discussions re Title v Common Property) We [Thorneton] will agree to continue the mowing of grass which is on private title BUT...[82]
They came across as very dictatorial ... threatening ... [83]
[82]Exhibit 21, “Snippets of the Interview with the new RUMS on 21.10.09”, emphasis in original.
[83] Exhibit 21, “Following this meeting the BCC has issues with the following”, Item 6.
Hales’ evidence of a provisional willingness to mow, pro tem, “on lots” as well as common property is confirmed, more or less readily, by witnesses for the BC. Wylie recalled that there were some “discrepancies” about the grounds to be maintained.[84] Hales said that the agreement was to maintain common property only, and that a survey must be done to ascertain how much of the lawns was common property, and how much was privately owned.[85] Ratcliffe, too, said that Hales requested a survey.[86] She realised that Hales was concerned about the expectation that Thorneton would mow more than common property,[87] and the potential dispute about mowing was one of the committee’s main concerns.[88]
[84] Transcript 6.138.
[85] Transcript 6.364-6.365.
[86] Transcript 6.817, 6.887-6.888, 6.956, 6.1050.
[87] Transcript 6.1068.
[88] Transcript 6.1242.
Lynette Atkinson, secretary to the BC committee, was also at the “meeting and greeting”. She acknowledged that Hales ‘brought up’ the need for a survey.[89] The Contract was ‘so vague’ on the point at issue,[90] but no attempt was made to clarify it.[91] ‘It hadn’t been discussed’.[92]The BC didn’t regard the distinction between private and common property as relevant, because the compliant Godwins had always tended the whole area, and in the common parlance of BC members “common property” meant common property and unfenced private land as well.[93]
[89] Transcript 6.1765.
[90] Transcript 6.2062.
[91] Transcript 6.2144.
[92] Transcript 6.2064.
[93] Transcript 6.838, 6.876 (“deemed”) (Ratcliffe), 6.1765 (Atkinson).
Watts, the chairman from February 2010, was not present at the meeting on 21 October 2009. Unfortunately he was a less than satisfactory witness, frequently evasive and argumentative. Unlike his fellow committee members, he refused to concede that mowing beyond common property was an issue from the outset.[94] He claimed, implausibly, that he was unaware of the issue until September 2010.[95] With considerable difficulty counsel for Thorneton obtained his admission that only about 56% of the unfenced lawns were common property.[96]
[94] Transcript 4.744 “Um”.
[95] Transcript 4.756.
[96] Transcript 4.1161-4.1242.
On 23 October 2009, the day after Hales sent the email in question, Thorneton’s solicitors emailed the then solicitors for the BC, stating in part:
As a result of [the 21 October] meeting, the Committee has concerns in relation to the boundaries of the lots, and relevantly where the common property starts and ends. As you are no doubt aware, this issue is one which the Committee may delay its consent [sic] to the Assignment. That issue should not be intertwined with the Assignments and any delays ... will mean that the Committee are in breach of their obligations in accordance with section 120 of the Accommodation Module. Please confirm as a matter of urgency that the Committee have [sic] consented to the Assignment ...[97]
[97] Exhibit 2 attachment 18.
In short, the extent of the mowing duties remained an “issue”. Clearly it was an important issue at the meeting on 21 October, and in the light of the solicitors letter two days later, I am not satisfied that the BC, even if it could prove reliance on Hales’ email, to which it made no reply,[98] could reasonably treat it as an unequivocal[99] sign that, overnight, he had thrown in the towel.
[98] Transcript 4.148.
[99]Legione v Hateley (1983) 152 CLR 406 at 436 – 437; AMP Financial Planning Pty Ltd v CGU Insurance Ltd (2005) 146 FCR 447; Coshott v Barry [2007] NSWSC 1094.
Is detriment shown?
Reliance, however reasonable, avails the claimant of a representational estoppel nothing, absent resulting detriment.[100] The email on 22 October 2009 did not cause the BC to commit itself to the assignment, and thereafter the BC accepted legal advice that the mowing issue was no lawful reason for refusing to execute the necessary documents.
[100]Telstra Corporation Ltd v Mahon [2004] FCA 1404; IOOF Building Society Pty Ltd v Foxeden Pty Ltd (2009) 23 VR 536.
Was the representation, if ever it raised an estoppel, irrevocable?
It is quite possible for promissory estoppel to suspend legal rights instead of extinguishing them, particularly in business affairs, when it may be unreasonable to expect a promise to last indefinitely. Reasonable notice of termination is required.[101] If I am wrong in rejecting the plea of an estoppel ab initio, I would hold that it ceased on 28 February 2011.[102]
[101]Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd [1955] 2 All ER 657; Commonwealth v Verwayen (1990) 170 CLR 394 at 442.
[102]See letter Thorneton to the BC, 3 February 2011, stating that unless additional payment for on-lot mowing was agreed by 28 February 2011 “we will no longer maintain [those] areas”.
Determination of the Mowing and Maintenance Issue
For the reasons given, I decline to grant the declaration or to make the orders sought by the respondent Body Corporate. The relevant obligations of the caretaker are set out in Clauses 1.1(f), 3.1, 3.3(b), 5.5 of the Contract, which should be read objectively, as a commercial document apt to pass through succession of hands in the course of trade.[103] If, as the BC claims, the present remuneration includes an allowance for tending the on-lot areas – adequate or inadequate as the case may be – that matter should be considered, and allowed for, by the person appointed to conduct the market review.
[103] Wilson v Anderson (2002) 213 CLR 401 at 418.
The BC’s nostalgia for the Godwin era is understandable. At that time it had the advantage of honest, hardworking caretakers, averse to hard bargaining about remuneration[104], and ever ready to ‘help out with private odd jobs ... for ... a very minimal fee.’In the matter of lawn mowing, they simply ‘followed what was shown to [them];[105] it was just a matter that [they] had always done it’.[106]Now it is evident that the people who replaced them favour a stricter, more businesslike interpretation of the contract. In commercial dealings that is by no means unconscionable,[107] particularly when the party pleading estoppel had the benefit of independent professional advice. There is a practical distinction[108] in equity between a hard bargain and conduct justifying an estoppel,
[C]ourts should be careful to conserve relief so that they do not, in commercial matters, substitute lawyerly conscience for the hard-headed decisions of business people.[109]
[104]Even at the time of the “special” review: “I guess ultimately we would have liked more”, but they accepted what was offered: Transcript 3.307.
[105] Transcript 3.388.
[106]Transcript 3.452, at which point the witness was cut off by counsel for the BC, and the subject abruptly changed.
[107] Kostopoulos v GE Commercial Finance Australia Pty Ltd [2005] QCA 311 at [57]-[58].
[108]Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd [2003] HCA 18 at [18], [68].
[109]Austotel Pty Ltd v Franklins Self-Serve Pty Ltd (1989) 16 NSWLR 582 at 585 per Kirby P.
Quantum
This aspect of the case presents fewer complications than the disputants have lavished, not always necessarily, on the issues of liability.
The parties have spent time and treasure in presenting and contesting the evidence of unilaterally chosen valuers. But latterly they have accepted, in response to directions of the Tribunal, that the quantum of an April 2009 market review depends on the application of Clause 1.1(o) of the agreement:[110]
“Market Remuneration” – such remuneration as shall be determined by the President for the time being of the Real Estate Institute of Queensland or his or her nominee, or such other person as agreed by the parties, as being the appropriate remuneration payable to the Caretaker having regard to the remuneration payable to other persons in similar positions to the caretaker. The parties agree that Mr Barry Turner, of the firm Building Management Consultancy & Services, is a suitable person for the purposes of this clause.
[110]BC’s submissions 10 December 2012 at [11(a)], 24 December 2012 at [28]; Thorneton’s submissions 14 December 2012 at [27], [34]; 18 December 2012 at [2].
The reference to Mr Turner was added in March 2007, when the Godwins succeeded Willsons as caretakers,[111] and the caretaker’s remuneration was increased to compensate for the addition of 49 new units to the complex. That historical reference does not bind the parties to choose Mr Turner if they are able to agree upon a valuer as envisaged in Clause 1.1(o).[112]
[111] Application filed 1 October 2010 attachment paragraph 6.
[112] BC submissions 27 June 2012 at [79]; BC submissions 24 December 2012 at [22].
However, the parties strongly dispute the proper interpretation of Clause 1.1(o). The BC favours a “time and motion” approach[113], while Thorneton insists on a “per lot” methodology.[114]
[113]BC’s submissions10 December 2012 at [22]-[23] and [25]-[26]; 24 December 2012 at [44]-[46].
[114] Thorneton’s submissions 14 December 2012 at [36]; 18 December 2012 at [11].
I decline the parties’ invitations to engage in esoteric exegesis of Clause 1.1(o) to resolve the perceived conflict between the “on-lot” and “time and motion” schools of thought. As it seems to me, the words of Clause 1.1(o), particularly the governing phrases ‘the appropriate remuneration payable to the caretaker, having regard to [that] payable to other persons in similar positions’ are ordinary, non-technical English, to be understood according to common contemporary usage, objectively and reasonably. That philosophy of interpretation is ‘in command of the field’.[115] They appear in a type of commercial contract that is apt to ‘pass through a succession of hands’[116], as happened here. Arcane interpretations or innuendoes are not suitable for transmission to third parties who have only the document to speak to them.[117] There is nothing in the present text or the evidence to suggest that it conceals some special meaning requiring further inquiry and explanation.[118] It is not a matter of exploring possible subjective beliefs, understandings or intentions of original or successive parties, but of applying the “outward manifestations” of their covenants.[119] It is not for the Tribunal to fetter the valuer’s discretion in applying the ordinary language words of the contract.
[115] Taylor v Johnson (1983) 151 CLR 422 at 429 per Mason ACJ, Murphy and Deane JJ.
[116] Wilson v Anderson (2002) 213 CLR 401 at 41`8 per Gleeson CJ.
[117] Ibid, quoting Devlin The Enforcement of Morals (1965) at 44.
[118]Contrast cases such as Re Bell [1969] VR 597; Prenn v Simmonds [1971] 1 WLR 1381; Boral Resources Pty Ltd v Donnelly [1988] 1 Qd R 506.
[119]Taylor v Johnson (1983) 151 CLR 422 at 428; cited with approval in Byrnes v Kendle (2011) 243 CLR 253 at [59].
However, the proposition that Clause 1.1(o) is ordinary language, to be understood as such, does not mean that it is devoid of discretions, or that it can be made to produce a mathematically or scientifically precise result. Of course that is not the case. On the contrary, the terms of Clause 1.1(o) leave the agreed (or appointed) valuer considerable room for manoeuvre. For example, the currently overworked word ‘appropriate’ inevitably involves opinion and degree, as does the phrase, ‘other persons in similar positions’. That is the nature of the language chosen. It is hardly less precise than expressions such as “reasonable care”, “reasonable time”, “the interests of the child”, “sufficient recompense” and other samples of ordinary language that adorn the forensic scene.
But be that as it may, the parties have entrusted the realisation of Clause 1.1(o) not to the Tribunal, or to a commercial arbitrator, but to the knowledge and experience of a more or less expert valuer selected by consent, or nominated by the REIQ. It is to that person that each party should address material relevant to quantum, and their submissions on the best and fairest way of reaching a result comparable to the incomes of other caretakers of similar community title schemes.
Role of a Valuer
Fears of further litigation[120] if the review is left to the discretion of a valuer may be discounted. It is important to appreciate the difference between a valuer appointed by contract, on one hand, and a commercial arbitrator or quasi-judicial authority on the other. This contract provides for a valuer. For better or worse, such a potentate is chosen to ensure a speedy, informal, and relatively invulnerable resolution of disputed entitlements, such as rent payable by a lessee, or remuneration payable to a service provider. ‘It is not [for] the courts to re-write [such a] contract.’[121] This valuer must, of course, honestly apply the broad criterion of comparable salaries for comparable services, but they are not a quasi-adjudicator open to appeal on the merits or otherwise. A valuer uses ‘his eyes, his knowledge and his skill’[122] in an informal process that does not generally oblige him to hear evidence and arguments.[123]
The effect of [such a] clause is to make the decision of the expert final and binding provided the matters referred to him are ones which the agreement contemplates.[124]
[120] As expressed in the BC’s submissions 10 December 2012 at [23]-[26].
[121]Public Authorities Superannuation Board v Southern International Developments Corp Pty Ltd NSWSC 19 October 1987 (unreported) at 10 per Smart J. See also Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 27 NSWLR 326 at 332 per Kirby P: “courts should be the upholders, and not the destroyers, of commercial bargains”.
[122] Re Dawdy and Hartcup (1885) 15 QB 426 at 430.
[123] Re Carus-Wilson and Greene (1886) 18 QBD 7.
[124]Fletcher Construction Australia Limited v MPN Group Pty Limited NSWSC, 14 July 1997 (unreported) Rolfe J at [18]. Applied in The Heart Research Institute Limited and Anor v Psiron Limited [2002] NSWSC 646 at [19]. See also Badgin Nominees Pty Limited v Oneida Limited [1998] VSC 188 at [35], citing Metropolitan Tunnel and Public Works Limited v London Electric RailwayCo [1926] Ch 371.
It matters not if the valuation clause is terse, making no provision for procedure, legal advice or natural justice.[125] In that event, it is for the valuer to decide what the procedure will be.[126] By referring a matter to a valuer ‘the parties agree to accept his honest and impartial decision’.[127] They cannot reopen it for mistake or error on his part or for any reason other than fraud or collusion.[128] In Email Ltd v Robert Bray (Langwarrin) Pty Ltd[129] the Full Court of Victoria held that a valuation could not be attacked upon the ground that relevant matters had been disregarded or irrelevant matters considered.
[125]Fletcher Construction Australia Limited v MPN Group Pty Limited NSWSC, 14 July 1997 (unreported) at 19-23; Triarno Pty Limited v Triden Contractors Limited NSWSC, 22 July 1992 (unreported) at 5 per Cole J.
[126]Fletcher Construction Australia Limited v MPN Group Pty Limited NSWSC, 14 July 1997 (unreported) at [23]-[24].
[127]Legal and General Life of Australia Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314 at 335 per McHugh JA.
[128]Mayne Nickless Ltd v Solomon [1980] Qd R 171; Legal and General Life of Australia Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314 at 336 per McHugh JA.
[129] [1984] VR 16 at 21.
Manifestly, then, the room for legal artifice to rebuild litigation upon the report of a valuer is severely limited.
The BC complains that Thorneton’s present remuneration includes an allowance for mowing “on lot” areas, so that if its mowing duties are limited to common property, it will receive an ‘unearned premium’.[130] But if that is so, and if Thorneton is not engaged to maintain the “on lot” areas in future, the valuer may be persuaded to make a suitable deduction from the amount valued.
[130] BC’s submissions 10 December 2012 at [29].
The BC contends that a market review as at 5 April 2009 will result in little or no benefit to Thorneton.[131] That remains to be seen. If that does prove to be the case – if, so to speak, the plaintiff is awarded a mere farthing in damages – that may be relevant to the question of costs. I propose to reserve the questions of costs and interest until the valuer’s decision is known. In the meantime I shall make declarations of Thorneton’s position with respect to remuneration and mowing respectively, and await the parties’ minutes of orders to give effect to them, and to this decision generally.
[131]BC’s submissions 24 December 2012 at [30], [37]. The Godwins received similar advice: see [41], above.
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