Owners Corp Strata Plan v Charbel CJ Pty Ltd - [2004] NSWSC 1286

CITATION: Owners Corp Strata Plan v Charbel CJ Pty Ltd [2004] NSWSC 1286

HEARING DATE(S): 1-3 December 2004

JUDGMENT DATE:
10 March 2005

JURISDICTION:
Equity

JUDGMENT OF: Burchett AJ at 1

DECISION: Injunction to be granted pursuant to Short Minutes.

CATCHWORDS: Strata Title - effect of Strata Management Statement under legislation - whether lessees from strata lot owners were bound - whether premises were used as "fast food outlet" contrary to the Statement - meaning of "fast food outlet" - meaning of "owner" - indefiniteness of word - construction from context - negative covenant extending to lessees - whether condition of development approval overrode Strata Management Statement - extent of injunctive relief where breach restrained was of a specific character and a general injunction might catch breaches of a quite different kind.

LEGISLATION CITED: Strata Schemes (Freehold Development) Act 1973 (NSW)
Retail Leases Act 1994 (NSW)
Statutory Interpretation in Australia 5 ed. (2001) at sec.4.27
Lewison, The Interpretation of Contracts, 3 ed. (2004) at sec.7.15

CASES CITED: Pepsi Seven-up Bottlers Perth P/L v Commissioner of Taxation (1995) 62 FCR 289
Gantry Aquisition Corp v Parker & Parsley Petroleum Aust. P/L (1994) 51 FCR 554 at 569
Zed v Fullerton (1944) 17 MPR 417 at 419
Smith v Packhurst (1740) 3 Atk.135 at 136; 26 ER 881 at 882
Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 290 at 397
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 153 ALR 490 at 509
Glofield Properties Ltd v Morley (No.2) (1989) 59 P&CR at 19
Forestview Nominees P/L v Perpetual Trustees WA Ltd (1995) 133 ALR 465 at 491
Hemingway Securities Ltd v Dunraven Ltd [1995] 1 EGLR 61 at 62
Opua Ferries Ltd v Fullers Bay of Islands Ltd [2003] 3 NZLR 740
Trade Practices Commission v Glo Juice Co P/L (1987) 73 ARL 407 at 412-413, 418
Commodore Business Machines P/L v Trade Practices Commission (1990) 92 ALR 563 at 574
Bankstown City Council v Alamdo Holdings Pty Ltd [2004] NSW CA 35 at [89]-[108]

PARTIES :
Owners Corporation Strata Plan 69470 - Plaintiff
Charbel CJ Pty Limited & Idya Pty Limited - Defendants

FILE NUMBER(S): SC 1607/2004

COUNSEL: Dr C Birch SC (Counsel for Ptf)
P W Taylor SC (Counsel for D1)
P Bolster (Counsel for D2)

SOLICITORS: Roper & Steggall for the Plaintiff
Elias Gates & Associates Pty Ltd for the First and Second Defendants

- 13 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BURCHETT AJ

10 March 2005

OWNERS CORPORATION STRATA PLAN 69470 (Plaintiff)
CHARBEL CJ PTY LIMITED AND IDYA PTY LIMITED (Defendants)

1 In this matter, the plaintiff alleges that each of the defendants is in breach of a number of obligations imposed upon it by virtue of a Strata Management Statement which took effect under S28W of the Strata Schemes (Freehold Development) Act 1973 (NSW) in respect of strata plans relating to a building at 43-45 North Steyne, Manly. No objection is taken to the…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2004] NSWSC 1286
Decision Date: 10 March 2005

CaseChat Overview and Summary

In this case, the Owners Corporation of a strata plan sought to enforce the terms of a Strata Management Statement against a lessee who had taken possession of a strata lot. The dispute centred around whether the lessee was bound by the terms of the Strata Management Statement, particularly those prohibiting the use of the premises as a "fast food outlet" and whether the lessee's activities constituted such use. The court was also required to determine the meaning of "fast food outlet" and "owner" as used in the statement, and whether an indefinite word in the statement could be construed from the context. Additionally, the court had to decide whether a negative covenant in the Strata Management Statement could extend to lessees and whether a condition of development approval could override the Strata Management Statement. Finally, the court needed to assess the extent of injunctive relief where the breach restrained was of a specific character, considering whether a general injunction might inadvertently catch breaches of a different kind.

The court found that the lessee was indeed bound by the terms of the Strata Management Statement, as it was incorporated by reference in the lease. The court determined that the term "fast food outlet" should be interpreted in its ordinary and natural meaning, which the lessee's activities fell within. The court also held that the term "owner" in the Strata Management Statement was not unconscionably vague and could be construed from the context. The negative covenant in the Strata Management Statement was found to extend to the lessee, and the court held that the condition of development approval did not override the Strata Management Statement. Lastly, the court concluded that the appropriate extent of injunctive relief in this case was a specific injunction, as a general injunction might catch breaches of a different kind and thus be broader than necessary.

The court ordered that the lessee cease and desist from using the premises as a "fast food outlet" and any other activities that were in breach of the Strata Management Statement. The court also ordered the lessee to pay costs associated with the proceedings. The specific nature of the injunctive relief was emphasised to ensure that it only targeted the precise breaches identified, without affecting other potential uses of the premises. This decision reinforces the importance of clear and specific terms in Strata Management Statements and the enforceability of such terms against lessees.

Orders