Owners Corporation v Barouche
[2017] VSC 143
•31 March 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2016 02743
| OWNERS CORPORATION PLAN NO. PS 409234V | Plaintiff |
| v | |
| LISA BAROUCHE | First defendant |
| STEPHANIE KREZEL | Second defendant |
| GI AND SANICKI LAWYERS PTY LTD | Third defendant |
| VERNONS SOLICITORS PTY LTD | Fourth defendant |
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JUDGE: | Bell J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 27 March 2017 |
DATE OF JUDGMENT: | 31 March 2017 |
CASE MAY BE CITED AS: | Owners Corporation v Barouche |
MEDIUM NEUTRAL CITATION: | [2017] VSC 143 |
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APPEAL – proceeding in Victorian Civil and Administrative Tribunal – application by lot owners for resolution of dispute with owners corporation over allocation of car parking constituting common property – owners corporation applied for joinder of solicitors for lot owners as concurrent wrongdoers – whether tribunal erred in law in deciding that no tenable claim in negligence existed against solicitors – scope of duty of care of solicitors acting generally in relation to purchase of lots in apartment building managed by owners corporation – whether leave to appeal should be granted - Victorian Civil and Administrative Tribunal Act 1998 (Vic) s 148(1), Owners Corporation Act 2006 (Vic) pt 11, Wrongs Act 1958 pt IVAA.
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APPEARANCES: | Counsel | Solicitors |
| For the plaintiff | Mr R T Wodak | Tisher Liner FC Law |
| For the first and second defendants | No appearances | CLP Lawyers |
| For the third and fourth defendants | Mr D Aghion | Obst Legal |
HIS HONOUR:
This is an application for leave to appeal and, if leave is granted, an appeal, under s 148(1)(b) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) in respect of a decision of the tribunal constituted by Senior Member Alan Vassie refusing to make an order joining two parties as additional respondents to a civil claim.
The applicant for leave and proposed appellant is Owners Corporation Plan No. PS 409234V, which is the owners corporation under the Owners Corporations Act 2006 (Vic) for the 32-lot apartment building known as 403 Toorak Road, South Yarra. Lisa Barouche and Stephanie Krezel are the owners of lots 22 and 14 respectively. They are the applicants in the proceeding in the tribunal. GI and Sanicki Lawyers Pty Ltd (‘Sanicki’) and Vernons Solicitors Pty Ltd (‘Vernons’) acted on behalf of Ms Barouche and Ms Krezel respectively when they purchased the lots in 2013 and 2014. They are the two parties whom the owners corporation unsuccessfully sought to have joined.
When Ms Barouche and Ms Krezel made those purchases, the 32 lot owners were entitled to use the 24 car spaces that were available on a first-come first-served basis as part of the common property. After the purchases were made and under s 14 of the Owners Corporations Act,[1] the committee of the owners corporation purportedly by special resolution decided to allocate use rights and leases in respect of the car park spaces to the current users of the spaces, leaving out 8 of the 32 lot owners, including Ms Barouche and Ms Krezel. In the proceeding in the tribunal, they have challenged this decision under pt 11 of the Owners Corporations Act. In that proceeding, the owners corporation has defended its decision. In addition, it made the refused application to join Sanicki and Vernons as additional respondents.
[1]Section 14 of the Owners Corporations Act provides:
By special resolution, an owners corporation may lease or license the whole or any part of the common property to a lot owner or other person.
The owners corporation made the application for joinder upon the basis that the two solicitors firms were concurrent wrongdoers in respect of an apportionable claim under pt IVAA of the Wrongs Act 1958 (Vic). Particulars of the claims against them were provided in proposed amended points of defence. As against Sanicki, the particulars were as follows:
PART IVAA WRONGS ACT 1958 – CLAIM AGAINST FIRST APPLICANT’S CONVEYANCING SOLICITOR – GI AND SANICKI LAWYERS PTY LTD (SECOND RESPONDENT)
27. The First Respondent says in the alternative:-
(a)The First Applicant’s claim against the First Respondent is an apportionable claim.
(b)The Second Respondent is a concurrent wrongdoer within the meaning of Part IVAA of the Wrongs Act 1958.
(c)The Second Respondent owed the First Applicant a duty of care in performing Conveyancing work as that term is meant in section 4 of the Conveyancers Act 2006 including providing the First Applicant with advice that was consequential to or ancillary to the First Applicant’s purchase of Lot 22 including but not limited to:-
i.Advising the First Applicant that she was not purchasing the right to use a car space at 403 Toorak Road, South Yarra;
ii.Advising the First Applicant that upon signing the Contract of Sale for Lot 22 the First Applicant had a legal right under section 146 of the Owners Corporations Act 2006 to inspect the First Respondent’s records free of charge and take a copy of any record upon payment of a reasonable fee, and she should avail herself of that right in order to confirm she was satisfied with the contents of the section 32 vendor’s statement;
iii.Advising the First Applicant that:-
a.There are only 24 car spaces on the common property at 403 Toorak Road, South Yarra; and
b.The First Respondent as the legal owner of the common property has the power under regulation 3.2, Schedule 2 of the Owners Corporations Regulations 2007 to allocate common property to other lots; and
c.The First Respondent as the legal owner of the common property has the power under section 14 of the Owners Corporations Act 2006 to lease or licence any part of the common property to a lot owner or any other person.
Particulars
The duty of care arose as a result of the First Applicant engaging the Second Respondent to provide legal and Conveyancing services to the First Applicant in the purchase of Lot 22 at 403 Toorak Rad, South Yarra in the context of the statutory scheme for Conveyancing work under the Conveyancers Act 2006.
(d)The Second Respondent breached its duty of care to the First Applicant.
Particulars
The First Applicant alleges at paragraph 15 of its Points of Claim dated 9 February 2016 that ‘… Each subsequent purchaser obtained unfettered title and were and are entitled to the use and enjoyment of the common property and its car park which vests in all owners for the time being of the lots as tenants in common in shares proportional to their lot entitlement in accordance with section 30 under the Subdivision Act 1988 …’ (‘the First Applicant’s Allegation’).
The First Applicant’s Allegation suggests that the Second Respondent did not provide the First Applicant with the advice referred to in paragraphs 27(c) above.
(e)The Second Respondent’s omissions caused, independently of each other or jointly, the loss and damage claimed by the First Applicant in its points of claim dated 9 January 2016 at paragraph A to G (both inclusive).
Claims against Vernons were particularised identically in para 28 of the proposed amended points of defence.
The tribunal accepted that, under ss 24AE and 24AF of the Wrongs Act, the claims of Ms Barouche and Ms Krezel against the owners corporation were apportionable claims for damages to which pt IVAA applied. It did so by taking a generous (towards the owners corporation) but open view as to the nature of the claim made in the tribunal by Ms Barouche and Ms Krezel. However, it decided that the allegations of the owners corporation did not give rise to any tenable claim in negligence against the solicitors as concurrent wrongdoers within s 24AH(1).
The tribunal gave two reasons for so concluding. The first was that the allegation in paras 27(d) and 28(d) of the proposed amended points of defence was speculative as the owners corporation had no basis for alleging what advice was given by the solicitors to their clients:
32. Ms Hannon submitted that what was set out in paragraph 27(d) was speculation, not an allegation of fact, and displayed a leap to a conclusion that the client’s allegation … about her rights to use common property was somehow connected to what her solicitor advised her or did not advise her. I agree. Let it be assumed that … the Points of Claim mean that neither applicant had any reason to suppose at the time of her purchase that in future the owners corporation might do something to confer upon other lot owners a greater right to use parts of the common property for car parking than the right that she would have. It just does not follow at all that her solicitors had not given her any advice about the power to lease or license.
The second reason was that the owners corporation had not established any foundation for the existence of the alleged duty of care:
33.There is a more fundamental reason, however, why I consider that there has been no tenable claim in the proposed Amended Points of Defence that the two firms of solicitors were in breach of a duty to take reasonable care. The only context given for the alleged breach of duty was that the firms’ clients were purchasing lots on a plan of subdivision for which there was common property, with the consequence that the owners corporation affected the lots and the common property and that the Owners Corporations Act 2006 was applicable. The Points of Claim had given no indication, and the proposed Amended Points of Defence contained no allegation, of what instructions either applicant had given to her solicitors or of what facts or matters the solicitors knew or ought to have investigated. All that the proposed Amended Points of Defence did was to reveal the context to which I have referred and to leap to the conclusion, from what one may infer was an applicant’s belief as to her rights, that there had been a breach of a duty to advise the applicant properly.
34.To accept that the owners corporation is making a tenable claim against the two firms of solicitors would amount, in my opinion, to accepting that every conveyancing solicitor in Victoria who is retained by a client who has purchased or who intends to purchase a lot on plan of subdivision affected by an owners corporation must advise the client
(a)that the owners corporation has a power to lease or license common property;
(b)of all provisions of the Owners Corporations Act 2006 (including s 14, which confers the power to lease or license) which might conceivably affect the client’s right to enter upon or occupy or use common property; and
(c)that the client ought to inspect the records of the owners corporation on the off-chance that they contain a document which might point to the risk of some lot owners being granted in future a greater right to enter upon or occupy common property than the client would have as a lot owner.
35.I cannot accept that it is arguable or tenable that a solicitor’s duty of care imposes such an unrealistic standard. The proposed Amended Points of Defence acknowledges that each applicant had had the benefit of a vendor’s statement given under s 32 of the Sale of Land Act 1962. Full compliance with that Act requires the provision of an owners corporation certificate giving details of any contracts, leases, licences and agreements affecting the common property.[2] If there had been no adequate compliance in that regard, or if an owners corporation certificate had contained details which ought to have indicated a need to enquire about possible future leasing or licensing of common property, matters would be different. If (for example) one of the applicants had instructed her solicitor that car spaces appeared to have been allocated on common property but there seemed to be too few of them, matters might also be different. But in the absence of any allegation that the case has any features such as those, it is fanciful to claim that either firm of solicitors breached a duty to take reasonable care.
[2]Sale of Land Act 1962 (Vic) s 32F, Owners Corporations Act 2006 (Vic) s 151(4)(a)(viii), Owners Corporations Regulations 2007 (Vic) reg 11(j).
36.The case sought to be made against the two firms of solicitors bears some similarities to the case sought to be made in a South Australian case.[3] Vendors of a dwelling house and five small units engaged a land agent to sell them. Each unit contained a stove. Local municipal council by-laws regulated where stoves could be installed in a lodging house, and classed the premises a lodging house. The stoves had been installed in contravention of the by-laws. The vendors knew of the classification as a lodging house but did not tell the land agent. When the purchaser was about to sign the contract, the land agent told him that there was no need for him to engage a solicitor and that the land agent could do all the legal work for him. Thereby, held the trial Judge Bray CJ, the land agent took upon itself the same duty of care as a solicitor would have had if acting for the purchaser. When, after settlement of the contract, the purchaser discovered the contravention of the by-laws, he sued not only the vendors but also the land agent. He succeeded against the vendors but failed against the land agent. Bray CJ held that there had been no breach of a solicitor’s duty of care, stating (Coombe being the name of the land agent’s salesman):
I have found a contract: it remains, however, to find a breach. I have not been able to find that Coombe possessed before settlement any specific knowledge of the facts relating to the status of the units and the stoves which were known to the female defendant. Ought he to have found them out? Would a solicitor acting on behalf of the plaintiff with reasonable skill and competence have found them out? That is the test which, in my view, has to be applied. A professional man is only liable for the use of ordinary care and skill. He is not bound to guarantee against all mistakes or omissions or to be gifted with powers or divination or to exercise extraordinary foresight, learning or vigilance ...
…
I do not think a solicitor is bound to know the provisions of all the by-laws of all the local government authorities in South Australia, or even to inquire into the possible existence of relevant by-laws unless there is something to direct his attention to the desirability of such an inquiry. Coombe said he had never heard of lodging houses in contemporary life before this case and I see no reason to disbelieve him or to think that when a solicitor is advising someone in connection with the purchase of land on which buildings are erected he is bound to enquire into the history of their erection in order to see whether the Building Act and regulations have been in all respects complied with, even though it is perfectly true that a building erected or used in defiance of the provisions of the Act can in theory ultimately be pulled down in certain circumstances (s 85 of the Building Act), unless, again, there is something to direct his attention to the necessity for such an inquiry. Nor, in my view, is the mere statement that the property proposed to be purchased includes flats a sufficient warning to put the solicitor on inquiry about these matters.[4]
37.Adopting the language of Bray CJ in that case, I consider that the case that the owners corporation is putting forward against the two firms of solicitors attempts to attribute to conveyancing solicitors powers of divination and an obligation to exercise extraordinary foresight or vigilance. The case is fanciful and, in my view, untenable.
[3]Jennings v Zihali-Kiss(1972) 2 SASR 493.
[4]Ibid 512–14.
In the proceeding in this court, the owners corporation wishes to challenge this reasoning of the tribunal upon the ground that it was based upon errors of law. In a proposed notice or appeal, it specifies the following five grounds:
1.The application before the Tribunal was an application for the joinder of solicitors to the Proceeding on the basis that they are concurrent wrongdoers (within the meaning set out in section 24AH of the Wrongs Act 1958 (Vic)) in relation to an apportionable claim. In the course of determining the application, Senior Member Vassie determined the scope of the duty of care owned by the solicitors. By doing so the Tribunal erred, in that the scope of the duty of care owed by the solicitors was not a question arising for determination.
2.In determining an application for the joinder of solicitors to the Proceeding on the basis that they are concurrent wrongdoers (within the meaning set out in section 24AH of the Wrongs Act 1958 (Vic)) in relation to an apportionable claim, Senior Member Vassie erred in determining that it was not arguable or tenable that Sanicki and Vernons owed their clients a duty of care as alleged by the Appellant. The Senior Member ought have addressed a different question, namely whether the Appellant had established that the proposed pleadings contained facts or allegations which, if established at trial, could arguably found a cause of action (per John Dixon J in Fabfloor (Vic) Pty Ltd & Ors v BNY Trust Company of Australia Limited & Ors [2016] VSC 99 at [75]).
3.Senior Member Vassie erred by finding as fact — in the absence of any evidence — that it is not arguable or tenable that Sanicki owed Ms Barouche the duty of care alleged in paragraph 27(c) of the Proposed Amended Points of Defence dated 16 May 2016, or that Vernons owned Ms Krezel the duty of care alleged in paragraph 28(c) of the Proposed Amended Points of Defence.
4.Senior Member Vassie erred by finding as fact — in the absence of any evidence and contrary to the terms of paragraphs 27(c) and 28(c) of the Proposed Amended Points of Defence — that the duty of care alleged against each of Sanicki and Vernons amounted to accepting that every conveyancing solicitor in Victoria retained by a client who has purchased or who intended to purchase a lot on a plan of subdivision affected by an owners corporation must advise the client:
a.that the owners corporation has the power to lease or license common property;
b.of all the provisions of the Owners Corporations Act 2006 (including s 14, which confers the power to lease or license) which might conceivably affect the client’s right to enter upon or occupy or use common property; and
c.that the client ought to inspect the records of the owners corporation on the off-chance that they contain a document which might point to the risk of some lot owners being granted in future a greater right to enter upon or occupy common property than the client would have as a lot owner.
5.Senior Member Vassie erred by finding — in the absence of any evidence — that the content of the duty of care owed by a conveyancing solicitor to a client who has purchased a lot on a plan of subdivision affected by an owners corporation was identical (in all relevant respects) to the content of the duty of care owed to a client who intended to purchase a lot on a plan of subdivision affected by an owners corporation.
Under s 148(1)(b) of the Victorian Civil and Administrative Tribunal Act, the appeal of the owners corporation cannot proceed without leave to appeal being granted. The court has ordered that the application for leave to appeal is to be heard at the same time as the proposed appeal. It is appropriate for me to determine this application at this stage.
The principles governing leave to appeal have been stated in the authorities.[5] Although the decision of the tribunal refusing joinder was an interlocutory one, it had the effect of a final order disposing of the claims of the owners corporation against the two proposed respondents in the proceeding. Therefore the fact that the decision was an interlocutory one does not stand in the way of leave being granted. However, in my view, the proposed grounds of appeal do not raise real and significant questions of law, which are appropriate for resolution by this court. I would therefore not grant leave to appeal. In case I am wrong in that conclusion, I will proceed as if leave had been granted.
[5]Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331, 335 [8] (Phillips JA, Tadgell and Batt JJA agreeing); Myers v Medical Practitioners Board of Victoria (2007) 18 VR 48, 55–6 [28] (Warren CJ, Chernov JA and Bell AJA agreeing).
In relation to the function of the tribunal in determining whether or not to grant the joinder application, it was common ground before the tribunal and this court that the tribunal had to determine whether the claims against Sanicki and Vernons were tenable, not whether they were likely to succeed. Although the tribunal is not a court of precedent, it had to approach the issue in the way discussed by John Dixon J in Fabfloor (Vic) Pty Ltd v BNY Trust Company of Australia Limited:[6]
[6][2016] VSC 99 (16 March 2016) [39]–[41] (‘Fabfloor’).
Whether the court acts under s 24AL or [the rules of the court], the application is approached in the same way. Assuming that the parties opposing the application raised no considerations that might persuade a court in its discretion to refuse the application such as prejudice, the relevant questions for the primary court were, first, whether the plaintiffs’ claims … were apportionable claims, which is assessed by analysis of the plaintiffs’ statement of claim, and, second, whether the allegations to be introduced by the amendment, if proved at trial, could establish that each of the proposed defendants was a concurrent wrongdoer in relation to those claims. For the reasons I will presently explain, both questions are assessed by reference to the traditional pleading test.
It is a nonsense to suggest that to determine the first issue the plaintiffs’ statement of claim should not be analysed by reference to the traditional pleading test and that the second defendant ought to put on evidence. Equally, it is a nonsense to suggest that a different approach should apply to determine the second issue.
Where, as here, a party seeks both a pleading amendment and joinder of the relevant concurrent wrongdoers as parties, once the court is satisfied that the amendments plead a defence that has a real prospect of success, joinder of the additional parties should follow as a matter of course. As Croft J observed in Main Road Property Group Pty Ltd & Ors v Pelligra & Sons Pty Ltd & Ors:[7]
Although the amendments and joinder are in some respects separate matters they are, in the present context, intimately related and it would not be appropriate to give leave for one and not the other.
His Honour went on to explain what he meant by the expression ‘the traditional pleading test’:[8]
In assessing the adequacy of a pleading, the unchanged approach remains that a court assumes, because the proper basis for the allegations has been certified, that the party advancing the pleading can establish its allegations at trial. This conventional pleading test is well-established. Of course, the presumption may be rebutted. As Dawson J said in The Commonwealth v Verwayen:[9]
In granting leave to amend, a court is concerned with the raising of issues and not with their merits. Of course, an amendment which is futile because it is obviously bad in law will not be allowed.
[7][2010] VSC 5 (15 January 2010) [19].
[8]Fabfloor [2016] VSC 99 (16 March 2016) [45].
[9](1990) 170 CLR 394, 456.
The central argument of the owners corporation in the proceeding in this court was that the tribunal had not applied these principles. Instead of determining whether the claims of the owners corporation against the solicitors in negligence were tenable, it effectively dismissed those claims on the merits. When the tribunal should have treated the scope of the retainer between the solicitors and their clients as a matter of fact to be determined upon the evidence adduced at trial, the tribunal finally determined this issue on the joinder application without such evidence. The owners corporation was particularly critical of what it described as the ‘finding’ of the tribunal that the content of the duty of care owed by the solicitors to the clients did not include advice in relation to the matters specified in paras 27 and 28 of the proposed amended points of defence. In the submissions of the owners corporation, the scope of the duty of care owed by the solicitors was not a question arising for determination.
These submissions of the owners corporation were set out in its written submissions (including those in reply) and developed in oral argument. The submissions reflected the five grounds of appeal (see above). To summarise, the first ground of appeal is that the scope of the duty of care did not arise for determination. The second ground of appeal is that the tribunal erred in deciding that it was not arguable that the solicitors owed the duty of care alleged. The third and fourth grounds of appeal are that the tribunal erred in finding as a fact that it was not arguable that the alleged duty of care was owed and would, if owed, be owed by all solicitors practising in the field. The fifth ground of appeal is that the tribunal erred in finding as a fact that the scope of the duty of care owed in law by the solicitors was identical to that owed to a client who intended to purchase a lot on a plan of subdivision affected by an owners corporation. Having regard to the submissions made by the owners corporation in support of these five grounds of appeal, in my view they all represent different ways of putting the central argument.
That central argument was helpfully developed in the written submissions of the owners corporation in reply. These submissions explained the allegations in paras 27(c) and 28(c) of the proposed amended points of defence as being that the solicitors owed a duty to advise the purchasers that:
a.they were not purchasing the right to use a car space;
b.they had a right under section 148 of the Owners Corporations Act 2006 (Vic) to inspect the owners corporation’s records and take a copy and should do so;
c.there were only 24 car spaces on the common property;
d.the owners corporation had power to allocate common property to other lots;
e.the owners corporation had power to lease or licence common property to lot owners or other persons.
In the reply submissions of the owners corporation, the tribunal found as a fact without evidence that this duty was not owed:
20.It is plain beyond argument that the Senior Member found — as fact — that the Solicitors’ duty of care did not encompass a duty to advise on the matters alleged at paragraphs 27(c) and 28(c) of the [proposed amended points of defence].
21.Given that the Senior Member had not received any evidence as to the content of the duty of care (for example, evidence as to the practice of competent conveyancing solicitors in the circumstances of the Solicitors), the Senior Member made findings of fact in the absence of evidence and notwithstanding that it was unnecessary for him to make such findings in order to determine the application before him.
22.It appears, particularly from [37] of the Reasons, that the Senior Member formed a definite view as to the extent to which a conveyancing solicitor is obliged to make enquiries. The Senior Member does not identify the factual substratum underlying his finding as to the extent of a conveyancing solicitor’s duty. He could not identify any factual substratum because there were no factual findings upon which this finding could be made. In context, the Senior Member’s findings as to the extent of the duty owed by conveyancing solicitors can be no more than the Senior Member’s opinion as to the extent to which obligations should be imposed on conveyancing solicitors.
23.Because the Senior Member made findings of fact without evidence and in the course of undertaking a task analogous to determining a pleadings summons, it is impossible to know whether the Senior Member had any, or adequate, regard to the context in which the Solicitors were engaged. That is, did the Senior Member have regard to the fact that the Solicitors were engaged to act as conveyancing solicitors in conveyances of residential lots in circumstances where the Property included 32 residential lots but only 24 car parking spaces?
Having considered these and the other submissions of the owners corporation, I have come to the conclusion that the tribunal did not commit any errors of law in dismissing the application for joinder. As the tribunal correctly decided, the amendments proposed were incapable of supporting a duty of the wide scope for which the owners corporation contended.
In my view, the application for joinder could not succeed without the owners corporation tenably pleading on a proper basis that Sanicki and Vernons owed Ms Barouche and Ms Krezel a special duty of care such as that which may be owed by solicitors practising in a specialised field to their clients. Although the submissions of the owners corporation did not go into this matter, the scope of the duty of care owed by solicitors practising in a specialised field may be wider than the scope of the duty of care owed by solicitors practising only generally in that field. I discuss the relevant authorities in Goddard Elliott v Fritsch.[10] The tenability of a claim based upon a duty of care of that kind would be analysed by reference to the principles discussed in those authorities. In the decision refusing the joinder application, the tribunal did not discuss these principles because the case was not put by the owners corporation upon this basis.
[10][2012] VSC 87 (14 March 2012) [405]ff.
The application for joinder of the solicitors was put by the owners corporation upon the basis that the wide duty of care for which it contended was owed to Ms Barouche and Ms Krezel because Sanicki and Vernosn were advising them in relation to the purchase of lots on a plan of subdivision affected by an owners corporation, that is, they were purchasing units in an apartment building that was managed and controlled by an owners corporation. Upon this bare basis, the owners corporation contended that the solicitors were duty bound to give advice in relation to the matters specified in paras a–e above. The amendment proposed by the owners corporation was not based upon an allegation that the solicitors had specialised expertise which informed the scope of their duty of care or upon any allegations of fact that were particular to the case which might have given rise to a duty of care of unusually wide scope.
In these circumstances, the tribunal’s analysis of the claims proposed by the owners corporation was correct. It is simply untenable to suggest that solicitors acting on behalf of clients purchasing units in apartment buildings have a general duty of care to give advice in relation to the matters specified in paras a–e. Of course, the situation may be different in the case of solicitors who were engaged because of their specialised expertise, or where some particular fact or circumstance tenably gives rise to the existence of such a duty. But that was not the nature of the amended case proposed by the owners corporation. Of course, such a case could not have been proposed, and could not hereafter be proposed, without a proper basis.[11]
[11]Civil Procedure Act 2010 (Vic) s 18.
I do not accept the criticisms made of the tribunal’s rejection of the scope of the duty proposed by the owners corporation. The tribunal’s reasoning was not based upon a finding of fact that this duty was not owed. The tribunal’s reasoning, which was correct, was that, as a matter of law, a duty of such a wide scope was not tenably owed having regard to the bare facts upon which the amendment was proposed. The tribunal’s reasoning was directly and correctly responsive to the way in which the amendment was framed. I would therefore have dismissed the appeal even if I had granted leave to appeal.
In relation to the first basis upon which the tribunal dismissed the application for joinder, this too was correct in law. There simply was no basis for alleging that Sanicki and Vernons had given any negligent advice in relation to the matters in paras a–e. But, as the tribunal decided, the more fundamental deficiency in the application for joinder was that there was no tenably pleaded claim that a duty of care to give advice in relation to those matters was owed.
The application for joinder was dismissed on legal and not discretionary grounds. I want to draw attention to discretionary considerations that might be relevant if an application for joinder is remade. The tribunal took a view that was generous to the owners corporation of the issues raised by the applications of Ms Barouche and Ms Krezel in the tribunal, particularly that these applications included a damages element that might overlap with any damages for which Sanicki and Vernos might be liable in an apportionable claim under pt IVAA of the Wrongs Act. Accepting this, the statutory claims made by Ms Barouche and Ms Krezel primarily relate to the responsibilities of the owners corporation under the Owners Corporations Act and to internal management issues. The clear intention of that Act is that such applications be heard and determined expeditiously and cost-effectively. From both a substantive and evidentiary point of view, the issues raised by the applications for joinder are very different to the issues raised by any joined claim at common law based on the alleged negligence of the solicitors. There might be a question whether joining such claims would not be in the interests of justice because it would make the proceeding in the tribunal much larger, slower and more costly. These are matters for the tribunal to consider should the need arise to do so.
For the reasons given in this judgment, application for leave to appeal is refused. I will hear the parties in relation to the issue of costs.
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