Owners Strata Plan No 50411 v Cameron North Sydney Investments Pty Ltd
[2003] NSWCA 5
•6 February 2003
NEW SOUTH WALES COURT OF APPEAL
CITATION: Owners Strata Plan No 50411 & Ors v Cameron North Sydney Investments Pty Ltd [2003] NSWCA 5
FILE NUMBER(S):
40738/02
HEARING DATE(S): 2 September 2002
JUDGMENT DATE: 06/02/2003
PARTIES:
Owners Strata Plan No 50411 (First Claimant)
Roderick Holdings Pty Ltd (Second Claimant)
Windermere Holdings Pty Ltd (Third Claimant)
Elem Investments Pty Ltd (Fourth Claimant)
Cameron North Sydney Investments Pty Ltd (Opponent)
JUDGMENT OF: Giles JA Heydon JA Santow JA
LOWER COURT JURISDICTION: Supreme Court
LOWER COURT FILE NUMBER(S): ED 3812/02
LOWER COURT JUDICIAL OFFICER: Young CJ in Eq
COUNSEL:
Mr B A J Coles QC/Mr S J Burchett (Claimants)
Mr J T Gleeson SC/Mr A J McInerney (Opponent)
SOLICITORS:
Cowley Hearne & Associates (Claimants)
Gadens (Opponent)
CATCHWORDS:
Equity - property law - planning and environment - application for leave to appeal - development application lodged by lot owner - rejection of development application by council - strata scheme - body corporate - owners corporation - whether body corporate can refuse consent to development application - whether body corporate is included in definition of 'owner' - regulation 46(1)(b) EPA Act - whether development application concerned common property - Whether Halpin's case should be reconsidered - jurisdiction of Supreme Court - council - joinder - Whether the rights and liabilities of council were directly affected - notice of contention - D
LEGISLATION CITED:
Environmental Planning and Assessment (Amendment) Act 1997
Environmental Planning and Assessment Act 1979
Land and Environment Court Act 1979
Local Government Act 1919
Local Government Act 1993
Statute Law Revision (Local Government) Act 1995
Strata Schemes (Freehold Development) Act 1973
Strata Schemes Management Act 1996
Strata Schemes (Miscellaneous Amendments) Act 1996
Strata Titles Act 1973
Strata Titles (Freehold Development) Act 1973
Strata Titles Management Act 1973
Supreme Court Act 1970
DECISION:
172
JUDGMENT:
IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
CA 40738/02
ED 3812/02GILES JA
HEYDON JA
SANTOW JA6 February 2003
OWNERS STRATA PLAN NO 50411 & ORS v
CAMERON NORTH SYDNEY INVESTMENTS PTY LTD
Judgment
GILES JA: Cameron North Sydney Investments Pty Ltd (“Cameron”) is the registered proprietor of Lot 1 in Strata Plan No 50411 (“Lot 1“ and “the strata plan”). Cameron wished to lodge with North Sydney Council (“the Council”) a development application in relation to Lot 1. On 7 August 2002 Young CJ in Eq ordered that The Owners Strata Plan No 50411, the owners corporation for the strata scheme (“the owners corporation”), consent to the making of the development application.
The owners corporation and all but one of the registered proprietors of the other lots in the strata plan applied for leave to appeal from the order. Cameron propounded a notice of contention and a notice of cross-appeal in the event that leave to appeal was granted. Full argument was heard, in part orally and with extensive further written submissions, so that if leave to appeal were granted all matters could immediately be disposed of.
The legal background
Section 78A(1) of the Environmental Planning and Assessment Act 1979 (“the EPA Act”) provides that a person may, subject to the regulations, apply to a consent authority for consent to carry out development.
By cl 49(1) of the Environmental Planning and Assessment Regulation 2000 (“the EPA Regulation”) -
“(1) A development application may be made:
(a)By the owner of the land to which the development application relates; or
(b)By any other person, with the consent in writing of the owner of that land.”
By s 4 of the EPA Act “owner” -
“ … has the same meaning as in the Local Government Act 1993 and includes, in Division 2A of Part 6, in relation to a building, the owner of the building or the owner of the land on which the building is erected.”
The word has the same meaning in cl 49 of the EPA Regulation, see s 11 of the Interpretation Act 1997.
The meaning given to “owner” in the Local Government Act 1993 relevantly provides -
“(b) In relation to land other than Crown land, includes:
(i)Every person who jointly or severally, whether at law or in equity, is entitled to the land for any estate of freehold in possession; and
(ii)Every such person who is entitled to receive, or is in receipt of, or if the land were let to a tenant would be entitled to receive, the rents and profits of the land, whether as beneficial owner , trustee, mortgagee in possession or otherwise; and
(iii)In the case of land that is the subject of a strata scheme under the Strata Schemes (Freehold Development) Act 1973 or the Strata Schemes (Leasehold Development) Act 1986 the owners corporation for that scheme constituted under the Strata Schemes Management Act 1996; … “
In Halpin v Sydney City Council (2000) 110 LGERA 464 Cowdroy J held that the owners corporation for a strata scheme is the owner which, pursuant to cl 49 of the EPA Regulation, must make or consent to a development application in relation to a lot in the strata plan, and that in the absence of the consent of the owners corporation a development application made by the registered proprietor of a lot in the strata plan does not comply with s 78A(1) of the EPA Act.
The factual background
Cameron acquired 153 Walker Street, North Sydney in about 1970. It constructed a multi-storey commercial building. In October 1995 it registered the strata plan, by which the building was divided into 16 lots. By various transfers thereafter four other companies came to be registered proprietors of Lots 2 to 16. Cameron retained Lot 1.
Three of the other companies, together registered as proprietors of twelve of the lots, are broadly associated companies. Together they control almost 70 per cent of the voting power in the owners corporation. In the proceedings at first instance the owners corporation and all the registered proprietors of the other lots in the strata plan were jointly represented, and the owners corporation and the three companies were jointly represented in this Court.
Lot 1 is on the ground floor of the building, and is the only lot on that floor. The remainder of the ground floor is common property. The boundaries of Lot 1 are generally the inside surfaces of the building wall and an internal wall, the external surface of a glass wall dividing it from the entry foyer, and a line along the internal face of columns at the front (west) of the building.
The western end of Lot 1 between the internal face of the columns and some shop front windows is not enclosed. It is effectively used as if it were part of the common property. At the heart of the litigation lies Cameron’s endeavours, resisted by the registered proprietors of the other lots, to enclose the western end of Lot 1.
In October 1999 Cameron exchanged contracts for the sale of Lot 1, conditional upon the purchaser obtaining development consent for its use as a restaurant. The purchaser lodged a development application with the Council; the development application included enclosing the western end of Lot 1. The Council told the purchaser that the consent of the owners corporation was required.
The owners corporation refused to consent to the making of the development application. It wrote to the Council maintaining that its consent was necessary and that it was not lawful for the Council to approve the application. There was extensive correspondence with the purchaser and others, in which the owners corporation gave reasons for opposing the restaurant development. The consent was still refused. After some time the purchaser rescinded the contract.
In maintaining that its consent was necessary, the owners corporation stated that the development included structural alterations to the building and that as owner of the building structure it was an owner of the land to which the development related within the meaning of cl 46 of the EPA Regulation. It is by no means clear that the owners corporation’s reasoning was that its consent was necessary simply because it was the owners corporation for the strata scheme, as was the effect of Halpin v Sydney City Council. However, at no time in the correspondence or later dealings, as will be seen including before Young CJ in Eq, was there dissent from the need for the owners corporation’s consent to Cameron making a development application.
Cameron received other expressions of interest in purchasing Lot 1, all subject to development consent including enclosure of the western end of Lot 1.
In October 2001 Cameron lodged a development application with the Council proposing the removal of the shop front windows, the enclosure of the western end of Lot 1, the installation of new doors in the glass wall, and some alterations to the access to the amenities within the lot. It was told by the Council that the consent of the owners corporation was required. It asked for consent. At the Annual General Meeting of the owners corporation held on 30 January 2002 a motion for provision of the consent of the owners corporation was put and lost. (The evidence of this episode tended to be in terms of consent to the alterations involved in the development, or to the development application, rather than consent to making the development application. All concerned must have been well aware that consent to making the development application was in issue. The shorthand of consent to the development application was not uncommon in the proceedings, including in some of the legal documents, and the same comment is appropriate.)
In March 2002 Cameron entered into a put and call option with a purchaser of Lot 1, conditional on approval of a development application. In April 2002 it asked by letter for the owners corporation’s consent to a slightly amended development application. Consent was not forthcoming. Rather than have it refused by the Council, Cameron withdrew the development application.
By subsequent variation, the put and call option could be terminated if a development application was not lodged with the Council by 7 August 2002. Cameron was told by the Council that it would need the consent of the owners corporation. It prepared another development application for the same works as proposed in October 2001. By a letter dated 18 July 2002 it sent the proposed development application to the owners corporation and requested that a meeting of the executive committee of the owners corporation be held to decide whether consent would be given to making of the development application. It threatened legal action, and it is tolerably clear that Cameron intended to lay the basis for the application which was heard by Young CJ in Eq.
By a letter dated 24 July 2002 Cameron was told that an extraordinary general meeting of the owners corporation would be called for 6 August 2002. In fact a meeting was held on 2 August 2002. It was resolved that the owners corporation “oppose the works described in the development application” pending receipt of an architectural report and “not … affix its seal to the development application”.
The proceedings below
On 30 July 2002 Cameron brought proceedings against the owners corporation and the registered proprietors of the other lots. By its amended summons filed on 2 August 2002 it claimed a declaration that the conduct of the owners corporation and the registered proprietors of the other lots was oppressive and constituted “fraud on the minority in equity”; an order that the owners corporation consent to the making of the development application enclosed with the letter of 18 July 2002; an order that the owners corporation and the registered proprietors of the other lots pay equitable compensation or alternatively damages for the refusals to give consent in relation to the restaurant development, the development application of October 2001 and the proposed development application of July 2002; and an order for an inquiry into the loss it had suffered.
The proceedings came before Young CJ in Eq on an application for the order that the owners corporation consent to the making of the proposed development application of July 2002, purportedly as an application for interlocutory relief impelled by imminent termination of the put and call option. Cameron’s outline of submissions expressly confined the relief sought to that order. It posed three issues: whether the consent of the owners corporation was necessary for a valid development application, if the consent was necessary whether the owners corporation was obliged to provide consent, and if the owners corporation was not so obliged whether it had acted “unreasonably or unlawfully” in refusing to provide consent. In the outline of submissions Cameron said that the answer to the first issue was yes in accordance with Halpin v Sydney City Council, and that the answers to the second and third issues should be yes.
At the commencement of the hearing Young CJ in Eq raised whether Halpin v Sydney City Council had been correctly decided. He was told by counsel for Cameron that it was common ground between the parties “that the law in Halpin was correct”. His Honour said, “I have my doubts, but if the parties agree on that point and I see why they may as it is a decision of a superior court, then that is how we must proceed”. He asked the position of the other parties, and their solicitor said they agreed “that Halpin is correct”. In his reasons (Cameron North Sydney Investments Pty Ltd v The Owners Strata Plan No 50411 [2002] NSWSC 726) his Honour said that he had “serious doubts” as to the correctness of Halpin v Sydney City Council, but that he “probably need[ed] to deal with the case on the basis that Halpin’s case, being a decision of a superior court, is correct.”
Young CJ in Eq held that an owners corporation is obliged to give its consent to the lodgement of a development application unless there is a lawful reason not to do so, finding guidance particularly in Kirkjian v Towers (Waddell CJ in Eq, 6 July 1987, unreported), and that s 65 of the Supreme Court Act 1970 gave power to order that consent be given. As I understand the reasons, by saying unless there is lawful reason not to do so his Honour meant unless it is unlawful. Important in his Honour’s reasoning, it seems, was that the registered proprietor of a lot in a strata scheme holds a fee simple, and that unless the owners corporation were obliged to consent to the lodgement of a development application there would be frustration of the generally unfettered incidents of that ownership. His Honour said that, although consenting to the making of the development application, the owners corporation would be entitled to oppose the grant of development consent.
The reasons given by the owners corporation for opposing the restaurant development had concerned its aesthetic and functional impact, and in later communications about the subsequent development proposals the owners corporation had said in effect that it and the registered proprietors of the other lots considered the enclosure of the western end of Lot 1 detrimental to the appearance of and access to the building with consequent effect on the building’s value and the value and rental value of the lots. The evidence before Young CJ in Eq included an affidavit from an officer of the three companies and chairman of the owners corporation proffering that justification for the refusal of consent, and both sides read architects’ affidavits directed to its basis. There was no cross-examination of the officer or of the architects.
His Honour made no finding as to the reasonableness of the owners corporation’s stance or that of the registered proprietors of the other lots. Nor did his Honour refer at all to the submissions in Cameron’s outline of submissions that the owners corporation’s refusal to give consent amounted to a fraud on a power and that by not voting to give consent the registered proprietors of the other lots acted oppressively and committed a fraud on the minority.
Young CJ in Eq concluded his reasons -
“33 Accordingly, although as I say in my personal view of the law the question being litigated does not arise, on the basis which I have adopted, the plaintiff is entitled to relief. However, the plaintiff is not relying on any equity because the right that is relied on is some implied statutory right. Accordingly, there would be no question of there being any equitable compensation and there is insufficient before me to suggest that breach of any statutory duty to consent necessarily gives rise to a claim for civil damages by a person affected. However, I think I should reserve further consideration of that aspect of the case so it can be argued properly without the current pressure of time.”
When making orders his Honour reserved further consideration “including as to damages”.
Is leave to appeal required?
In the affidavits read before Young CJ in Eq Cameron asserted loss of the order of $600,000. It was suggested, albeit faintly, that there was an appeal as of right notwithstanding that the claim to damages remained outstanding. (The claim to relief against oppression and fraud on the minority was also outstanding.) Leave is required to appeal from “an interlocutory judgment or order in proceedings in the Court” (Supreme Court Act s 101(2)(e)). The distinction between final and interlocutory judgments and orders is sometimes unclear, but the reasoning in Computer Edge Pty Ltd v Apple Computer Inc (1984) 54 ALR 767 is against the suggestion and explains the diffidence with which it was made. In any event, for reasons which will appear I consider that leave to appeal should be granted.
Raising the correctness of Halpin v Sydney City Council
Cameron sought to raise whether Halpin v Sydney City Council was correct. It submitted that leave to appeal should be refused because this Court should so hold and the consent to making the development application given pursuant to the order of Young CJ in Eq would become an irrelevancy. The notice of contention included that Halpin v Sydney City Council was incorrect, and the notice of cross-appeal included that Young CJ in Eq should have so held and claimed a convoluted declaration which came down to Halpin v Sydney City Council being incorrect.
The amended summons assumed the correctness of Halpin v Sydney City Council. It relevantly claimed an order that the owners corporation consent to the making of the development application, a claim which had meaning only if consent was necessary. When Young CJ in Eq raised the correctness of the decision, his Honour was told that the parties agreed that it was correct. The question proffered and determined was whether or not the owners corporation was obliged, and could be ordered, to give consent, that being a live question with practical content because the Council and the owners corporation said that the owners corporation’s consent was required and Cameron agreed.
Quite apart from its express acceptance that Halpin v Sydney City Council was correct, Cameron could not have argued before Young CJ in Eq that it was incorrect. If the consent of the owners corporation to the making of the development application was not required, Cameron would not have been entitled to the relief it sought.
Even if Halpin v Sydney City Council was not correct, I do not think leave to appeal should for that reason be refused. The owners corporation has been compelled by Court order to do something which it contends it should not have been compelled to do. So long as the order and the basis for the order remain, the owners corporation and the registered proprietors of the other lots are exposed to a claim to significant damages. These past and potential imposts upon the owners corporation and the registered proprietors of the other lots should not be left in being, immune from present challenge, through Cameron now having it held that it did not need the owners corporation’s consent to making the development application at all. There was no suggestion that Cameron abandoned its claim to damages.
The decision of Young CJ in Eq would not be affirmed by a holding on appeal that Halpin v Sydney City Council was incorrect; such a holding would matter not to his Honour’s decision. Given the agreement of the parties that it was correct, of course, Young CJ in Eq was not in error in failing to hold that Halpin v Sydney City Council was incorrect. The notice of contention and notice of cross-appeal so far as directed to Halpin v Sydney City Council have no substance.
The principle that parties are usually bound by the course they adopted at trial is well established, see University of Wollongong v Metwally (1984) 158 CLR 447 at 483; Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631 at 645-6; Chilcotin v Cenelage Pty Ltd [1999] NSWCA 11 at [15]-[18]. The present matter, however, goes beyond this principle. Cameron does not seek to uphold the result in the proceedings by putting its case in a different way. It seeks to retain the result in the proceedings and as well have, on appeal, relief it did not claim below and which is contrary to the basis on which it claimed the relief it seeks to retain. Cameron could not have appealed to have a determination that Halpin v Sydney City Council was not correct, and it can not be in any better position as respondent to an appeal or cross-appellant.
In my opinion, therefore, Cameron should not be permitted to raise whether Halpin v Sydney City Council was correctly decided. So far as it propounded the notice of cross-appeal Cameron needs leave to cross-appeal, and leave in that respect should be refused. I do not intend in this to endorse the correctness of Halpin v Sydney City Council.
The decision that the owners corporation was obliged to give its consent
It is convenient first to refer to Kirkjian v Towers. The plaintiffs had a right of way over the defendants’ land. An issue was whether construction of a driveway would be an excessive user of the right of way. It was held that it would not. The defendants refused to consent to the plaintiffs making a development application to permit construction of the driveway. It was held that the defendants could be ordered to give their consent, the reasoning being -
“It is said that by refusing their consent without any lawful reason the defendants are, in fact, obstructing the rights of the plaintiffs to use the right-of-way. This seems to me to be correct. The defendants being the proprietors of their land subject to the plaintiffs’ right-of-way, cannot in law, be entitled to refuse to permit the plaintiffs either directly or indirectly to exercise their right to adapt the right-of-way for the purpose for which it was originally granted.”
Young CJ in Eq found support by analogy in this case. With respect, I do not think it supports his Honour’s decision. The order that the defendants consent to the making of the plaintiffs’ development application was by way of enforcement of the plaintiffs’ rights over the defendants’ land, in effect restraining the defendants from denying the plaintiffs their rights. In the present case Cameron has no equivalent or analogous rights as against the owners corporation, and whether it otherwise has a right to obtain consent to making its development application is what is in issue.
As Young CJ in Eq noted, Kirkjian v Towers was referred to by Cripps J in Hoggett v Willoughby Municipal Council [1988] NSWLEC 93, by Bignold J in Gamkrelidge Partners v Randwick Municipal Council [1998] NSWLEC 100 and by Cohen J in Patrial Holdings Pty Ltd v Short (14 July 1994, unreported in full); see also Annwrack Pty Ltd v Williams (Waddell CJ in Eq, 8 February 1989, unreported). None of these cases takes the matter any further.
In 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504 Hodgson CJ in Eq made an order pursuant to s 88K of the Conveyancing Act 1919 imposing an easement for the passage of the plaintiff’s crane over the defendant’s land. His Honour included in the order a term that the defendant consent to the making of an application to the council for consent to relevant use of the defendant’s land, saying that the right to have the consent was an ancillary right reasonably necessary for the exercise or enjoyment of the easement and would be implied but should appropriately be made express. His Honour observed (at 522) that “the obligation on the defendant to give written consent can only be imposed as part of the easement, not by any order of the Court which is independent of the easement”.
In Mulyan Pty Ltd v Cowra Shire Council (1999) 105 LGRA 26 Bryant claimed to hold a licence from Mulyan to take materials from Mulyan’s land. It lodged a development application for an extractive industry on the land, accompanied by a letter from Mulyan which it asserted, and Mulyan denied, was a consent to the making of the development application. Lloyd J held that the letter was not a consent, and (with reference to Kirkjian v Towers and 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123) that Bryant had not established that it had any proprietary or other interest in the land, and so that there was no basis for an order that Mulyan give its consent to the making of the development application.
These cases underline that Kirkjian v Towers turned on the existing right of way.
By s 78A(1) of the EPA Act and cl 49(1) of the EPA Regulation the owner of the land to which a development application relates is given control over the making of the development application. The owner must either make the application or give written consent to the making of the application. A third party proposing a development application for the owner’s land generally can not insist that the owner make or consent to the making of the application (see Mulyan Pty Ltd v Cowra Shire Council ). If the third party has rights in relation to the owner’s land, as in Kirkijian v Towers, or no doubt if the third party has an appropriate enforceable contractual right against the owner, the third party can insist that the owner give consent, possibly that the owner make the development application. But a basis for an obligation to make or consent to the making of the development application must be established.
If, as must be taken to be so for present purposes, the owners corporation is by the imported definition the owner which must make or consent to the making of a development application in respect of a lot in a strata scheme, whence comes an obligation to make or consent to the making of a development application?
It does not come from the planning legislation. It is true that Cameron as registered proprietor of Lot 1 is not any third party. It is in ordinary parlance the owner of the lot of which, by the imposed definition, the owners corporation is for present purposes in law the owner. What matters, however, is the stipulation of ownership in law. Nothing in the EPA Act or the EPA Regulation warrants a gloss upon the legislative direction that a development application is to be made by or with the written consent of the owners corporation. The relevant provisions say nothing about an obligation on the owners corporation to make or consent to the making of the development application, and they can not carry within themselves an effective inconsistent ability of the registered proprietor of the lot to make a development application.
Cameron holds a fee simple in Lot 1, in short the fullest rights of ownership. But rights of ownership are commonly constrained by legislation, and for present purposes the legislation has constrained Cameron’s rights by giving control over the making of a development application in relation to its lot to the owners corporation. That Cameron holds the fee simple does not of itself mean that the owners corporation is obliged to so act (by making or consenting to the making of a development application) as to enable Cameron to use its lot to the fullest extent. Nor is this a case in which principles of derogation from a grant of rights can be invoked, since the owners corporation did not grant any rights to Cameron for the enjoyment of which it must make or consent to the making of a development application.
If an obligation to make or consent to the making of a development application is to be found, it must be in the strata scheme legislation. An owners corporation holds the common property of the strata scheme and can not be regarded as disinterested in development of the lots of the lot-holders. By s 12 of the Strata Schemes Management Act 1996 an owners corporation has the functions conferred or imposed on it by or under that or any other act. The powers conferred under the Act include making (s 47) and enforcing (s 45) by laws and controlling, managing and administering the common property of the strata scheme for the benefit of the owners (s 61(1)), specifically maintaining and repairing the common property of the strata scheme, managing the finances of the strata scheme, taking out insurance for the strata scheme and keeping accounts and records for the strata scheme (s 61(2)). Miscellaneous functions are specified (ss 110-115). Nothing in these provisions suggests an obligation to consent to the making of a development application in relation to a lot in the strata scheme unless it is unlawful, the obligation held to exist by Young CJ in Eq. On the contrary, any decision by the owners corporation as to making or consenting to the making of a development application would properly be informed by regard to the effect of the development on the proprietors of the other lots and the building as a whole.
Respectfully differing from Young CJ in Eq, I do not think that his Honour was correct in holding that the owners corporation was obliged to consent to the making of Cameron’s development application unless it was unlawful. I have earlier adverted to the damages claimed. I consider that leave to appeal is warranted in order that the present basis for prosecuting the claim to damages be removed.
The notice of contention
Apart from the correctness of Halpin v Sydney City Council, by the notice of contention Cameron sought to uphold the order made by Young CJ in Eq on the basis that the conduct of the owners corporation and the owners of the other lots had been oppressive to it and “constitutes a fraud on the minority under the Strata Plan”, and that the order was “an appropriate mandatory injunction which will operate to prevent the continuance of such oppressive conduct and conduct fraudulent on the minority”.
As I have noted, Young CJ in Eq made no mention of oppression or fraud on the minority. There were no material findings. Cameron’s fall-back position before his Honour on the obligation to give consent was that there was an obligation to consent to the making of the development application unless it was unreasonable (as distinct from unlawful). Findings as to the effect of enclosure of the western end of Lot 1 on appearance, access and values, and the reasonableness of the stance of the owners corporation and the registered proprietors of the other lots, would be particularly material to oppression and fraud on the minority, since within limits the registered proprietors may vote for their own benefit (see Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46 at 52-3) Cameron properly accepted that this Court could not make findings in that respect.
The submissions in this Court gave but brief attention to oppression and fraud on the minority. Cameron’s submission was no more than that any power to give or withhold consent would be oppressive and a fraud on the minority if “exercised in this manner and in these circumstances”. I doubt that, in the manner the hearing before Young CJ in Eq was conducted, such serious conclusions as findings of oppression and fraud on the minority could properly have been reached; in any event, in order to have reached or reach them there would have to be consideration of, amongst other things, the effect of enclosure of the western end of Lot 1 on appearance, access and values and the reasonableness of the stance of the owners corporation and the registered proprietors of the other lots. Where this Court can not enter upon the necessary areas of fact, I do not think the notice of contention in this respect can avail Cameron; nor would I be prepared to come to conclusions as to oppression and fraud on the minority without more complete attention in submissions to their legal availability and factual basis. Nor, it seems to me, would it necessarily follow from a conclusion of oppression or fraud on the minority that there should be an order that the owners corporation give its consent to the making of the development application; again I am not prepared so to decide without more complete attention in submissions.
The cross-appeal
There was no formal application for leave to cross-appeal. Apart from the correctness of Halpin v Sydney City Council, by the draft notice of cross-appeal it was said that Young CJ in Eq should have found the oppression and fraud on the minority “and granted declaratory relief … consequent upon those findings”, and should have “granted such injunctive or other relief in favour of the cross-appellant as was necessary to bring finality to the dispute between the parties”.
There were a number of extravagances in the proceedings; this was perhaps the most remarkable. The application before Young CJ in Eq was expressly limited to an application for the order his Honour made, and it can not be said that his Honour should have made the declaration as to oppression and fraud on the minority. Nor can it be said that his Honour should have taken it upon himself to canvass all possible relief to finalise the dispute between the parties. In any event, as I have indicated there was little more than passing attention to oppression and fraud on the minority in submissions in this Court. Leave to cross-appeal should be wholly refused.
Orders
The proceedings have become regrettably fragmented. I do not think this Court should attempt to chart any future course in this protracted and at times heated dispute. That is something to be addressed in the Equity Division.
I propose the following orders:
(1)Grant leave to appeal and direct that the notice of appeal be filed within 7 days.
(2)Refuse leave to cross-appeal.
(3)Appeal upheld.
(4)Set aside the orders made by Young CJ in Eq on 7 August 2002 save for the order as to return of exhibits.
(5)Remit the proceedings to the Equity Division for further disposal.
(6)Respondent to pay the appellant’s costs of the appeal and the defendants’ costs of the application heard by Young CJ in Eq and have a certificate under the Suitors Fund Act if otherwise qualified.
HEYDON JA: This is an application for leave to appeal against orders of Young CJ in Eq made after delivering an ex tempore judgment on 7 August 2002.
Background
The plaintiff is the registered proprietor of lot 1 in Strata Plan 50411 constituted under the Strata Schemes (Freehold Development) Act 1973. The building subject to the strata plan is a multi storey commercial building. The strata plan divides it into 16 freehold strata lots. The first defendant is the body corporate. The second-fifth defendants hold the 15 lots other than lot 1. In this Court the plaintiff was the opponent and the first four defendants were the claimants, the fifth defendant having discontinued its application for leave.
On 15 October 1999 the plaintiff exchanged contracts for the sale of lot 1. The contract was conditional on the purchaser obtaining a development approval from North Sydney Council. The body corporate maintained that no development application could be lodged without its consent, and would not consent. After many disputes, the purchaser terminated the contract on or about 27 November 2000.
The plaintiff continued to try to sell or lease lot 1. On 29 October 2001 it lodged a development application with the Council for work said to be entirely within lot 1. The body corporate had not consented to that course, but the Council, when it acknowledged receipt on 1 November 2001, did not draw attention to the absence of consent or decline to proceed further on that ground.
On 29 November 2001 the solicitors for the body corporate wrote to the North Sydney Council about the plaintiff’s application dated 29 October 2001 saying:
“Clause 49(1) of the Environmental Planning & Assessment Regulation 2000 provides that:
‘A development application may be made:
(a)by the owner of the land to which the development application relates, or
(b)by any other person, with the consent in writing of the owner of that land.’
Structural alterations to the building are included in the works proposed in the DA. The Owners Corporation as owner of the building structure is therefore ‘an owner’ within the meaning of that clause, and its consent is thereby required before the DA can lawfully be made.
No such consent has been requested or given and it is not therefore lawful for Council to approve the DA.
We presume the Council will therefore advise the applicant that the DNA must obtain our client’s consent before the DA can be lodged.
Please confirm that this has been done.”
There is no evidence that the Council did advise the plaintiff as requested.
In the early part of 2002 the plaintiff tried to get the body corporate to reconsider the matter, but the body corporate did not consent to the development application and maintained the position that its consent was required.
On 18 July 2002 the draft of a further development application was sent to the solicitors for the body corporate.
Proceedings were started in the Equity Division of this Court on 31 July 2002. The Amended Summons seeks a declaration that the conduct of the first-fifth defendants in relation to the plaintiff’s use and enjoyment of lot 1 is oppressive to the plaintiff and constitutes fraud on the minority in equity. The Amended Summons also seeks orders for equitable compensation and for an inquiry into damages. Paragraph 2 also seeks the following relief:
“An order that the first defendant consent to the plaintiff lodging with North Sydney Council the development application enclosed in the letter dated 18 July 2002 from Gadens Lawyers to Cowley Hearne in relation to lot 1 in strata plan 50411 … .”
The trial judge heard the application for the order in paragraph 2 as a matter of extreme urgency on the basis that a decision was called for by 5pm on the day on which the hearing commenced. The application was for interlocutory relief, but the trial judge made the order on a final basis. He also ordered the body corporate to provide a letter to the plaintiff’s solicitors acknowledging consent, and within a reasonable time thereafter to provide a formal sealed consent. Those orders have been complied with.
On 23 August 2002 the claimants filed an Ordinary Summons for Leave to Appeal. The court ordered that the application for leave to appeal and the appeal be heard concurrently. It also ordered that the hearing be expedited. The hearing was fixed for 2 September 2002. In consequence of the pressure of business on the court that day and the complexity of the contentions advanced in this case, the argument could not conclude that day, and was completed in writing. In addition to the two sets of written arguments already filed by the claimants and the one set of written arguments already filed by the plaintiff before the oral hearing began, the plaintiff filed further arguments on 6 September and 18 September 2002, and the claimants filed one set of undated arguments and another set of arguments (without leave) on 24 September 2002.
The trial judge’s reasoning
The trial judge said:
“The basal problem comes about as a result of an interpretation given to s 78A of the Environmental Planning and Assessment Act 1979 (the EPA Act) by Cowdroy J in Halpin v Sydney City Council (2000) 110 LGERA 464. Essentially his Honour decided that the meaning of the word ‘owner’ in regulation 46(1)(b) made under the EPA Act, where a strata plan was involved, meant the owners corporation of that body corporate. That paragraph of the regulation provides that a development application may be made by any person, but only with the consent in writing of the owner, or by the owner itself.
If that decision is correct, then it follows that no lot holder of any strata plan can make any development application, and probably, though I have not looked into this, any building application, without the consent of the body corporate. If that is right, it opens up a Pandora's box of questions as to what, if any, is the obligation of the body corporate to give or to withhold consent. It is some of those questions that arise in this present case.
Both counsel for the plaintiff and the solicitor for the defendants informed me that they are proceeding on the basis that Cowdroy J's judgment was correct. There was a practical reason for taking this view, ie, that as a decision of a superior court, the North Sydney Council, the appropriate local authority, would assume that the judgment was correct and would accordingly reject any development application not made by or consented to by the owners corporation. The fact that there could be an appeal to take the question of law in Halpin's case to the Court of Appeal is of no comfort. The process might take some years to exhaust and is thus not commercially acceptable.
This again puts the Court into an awkward position. With great respect to his Honour, I have serious doubts as to whether his decision could be correct, and with great respect to him, I believe it gives too little significance to the opening words of s 4 of the EPA Act, ie, that the definitions are to apply except insofar as the context or subject-matter otherwise indicates or requires. The effect of his Honour's decision is that a person who for all intents and purposes has a fee simple in land is hogtied in the way in which he or she can use that land in a way that comes close to denying the property itself.
However, having said that, I probably need to deal with the case on the basis that Halpin's case, being a decision of a superior court, is correct.”
The trial judge then decided that he should make the orders he made because the body corporate’s refusal to consent derogated from the fee simple in lot 1 owned by the plaintiff.
Is leave needed?
The body corporate contended that leave was not needed on the ground that the appeal involved “a claim, demand or question … respecting property … of the value of $100,000 or more” within the meaning of the Supreme Court Act 1970 s 101(2)(r)(ii). This was said to be so on the ground that the plaintiff valued its lot at $850,000, while the insurable value of the building was $21.8 million. This argument is invalid. While the building as a whole may be worth more than $100,000, and while lot 1 may be worth more than $100,000, it has not been shown that the claim, demand or question about that property is of the value of $100,000 or more. The only relevant evidence is that the difference in the value of lot 1 with and without the development application is $75,000. No Part 51 rule 8 affidavit has been filed by the claimants.
Even if that problem did not exist, leave would still be needed because though the trial judge granted a final injunction, his decision was interlocutory. He has not decided the allegation of oppression and the related claims for monetary compensation, and thus has not finally disposed of the controversy between the parties: Computer Edge Pty Ltd v Apple Computer Inc (1984) 54 ALR 767. Hence leave is needed because of s 101(2)(e) of the Supreme Court Act.
The claimants unquestionably need leave to appeal, and it is surprising that that proposition was ever disputed.
Whether Halpin’s case can be considered: factual background
The question of whether Halpin v Sydney City Council (2000) 110 LGERA 464 is correct is anterior to the issues decided by the trial judge. In this Court the plaintiff submitted that it was not correct. The body corporate opposed the hearing by this Court of any argument that Halpin’s case was wrong, and of a Notice of Contention and a Notice of Cross-Appeal directed to that argument. In the circumstances the sensible course is to consider whether Halpin’s case is correct, subject to considering the merits of the objections to that course advanced by the body corporate.
The factual background is as follows.
The proceedings were filed on 31 July 2002. On 2 August 2002 Bryson J made consent orders listing the matter for hearing on 7 August 2002.
The parties have filed affidavits indicating that they agree on the following course of events on 7 August 2002. At the start of the hearing on 7 August 2002 the following exchange took place. The trial judge said:
“The way I see the arguments of the parties the questions that arise are: one, was [Cowdroy J] right? two, if he is, is there any fiduciary obligation on an owners corporation to an owner of a lot to give consent? and three, has this duty been breached?”
Counsel for the plaintiff said:
“It is common ground between the parties, your Honour, that the law in Halpin is correct.”
The trial judge said:
“I have my doubts, but if the parties agree on that point and I see why they may as it is a decision of a superior court, then that is how we must proceed.”
The trial judge then said:
“And what is the Defendant’s position?”
The solicitor appearing for the defendants said:
“We agree that Halpin is correct.”
At the end of the evidence and during the oral argument, the trial judge said:
“I have serious doubts that [Cowdroy J] is correct. If so, your client can lodge its application at council without consent.
I understand why you are here. If you were to take a different approach your client would lodge the application with council who would reject it.
You would take the council to the Land & Environment Court.
Then you would go to the Court of Appeal who would refer it back to the Land & Environment Court who would refer it back to council.
Then you would have the objection period and you would get your approval in about 2027.”
Whether Halpin’s case can be considered: the claimants’ arguments in chief
The claimants submitted that the Halpin issue should not be agitated for the following reasons:
“(a)The opponent made no submission that the law in Halpin’s case was wrong in the court below, but to the contrary, unreservedly made the contrary submission.
(b)The proceedings below were argued and determined on the basis that the law in Halpin was correct.
(c)The court below and the claimants were asked to answer the opponent’s claim as a matter of urgency on the basis of the unreserved submission that the [body corporate’s] consent was required.
(d)Further relief was claimed by the opponent in the amended summons for substantial damages on the basis that the consent was required, but was withheld.
(e)No claim for relief is made in the amended summons to the effect that the DA could be made without the [body corporate’s] consent.
(f)The relief obtained and acted upon by the opponent was claimed on the basis of the unreserved submission that the [body corporate’s] consent was required.
(g)The council which is bound to accept the DA if the opponent is successful in reversing the law in Halpin was not joined as a party.
(h)Any claim that the Council was bound to deal with the DA on the basis that Halpin was wrongly decided:
(i)would in all [probability require] joinder of the [council]
(ii)would bring the proceedings within the exclusive jurisdiction of the Land & Environment Court (see Land & Environment Court Act 1979 Section 20(1)(e); Section 20(2)(c) and Section 71(1)).”
The claimants then pointed out that in particulars served on 1 August 2002 the plaintiff had said that the consent of the body corporate was needed before the Council could consider the development application, and also pointed to the fact that the trial judge had recorded that the representatives of the parties had informed him that they were proceeding on the basis that Halpin’s case was correct.
The claimants then submitted:
“Even if [Halpin’s case] is wrong and the first claimant’s consent was not required for the making of the DA solely because it was the owners corporation of the strata plan for the land concerned, its consent as owner may arguably be required for the additional reason that the DA may relate to common property in the ordinary sense, in that:
(iii)‘there may be some penetration of the common property by screws and other fastenings. Until more detailed plans come into existence, the degree of this possibility occurring cannot be assessed’ (Judgment para 27);
(iv)the DA proposal includes significant alterations to planter boxes on common property (Transcript at p 12 – p 720 White folders);
(v)there may be other aspects of the development application such as air conditioning that will require works to common property which have not been addressed in evidence; and
(vi)by altering entrance arrangements to the lot the DA may change the use of common property;
(vii)the DA proposes ‘removal of masonry walls’ (see proposed DA plan at Tab 17 to the White Folders).
The claimants are prejudiced by the late challenge to the law in Halpin because they are prevented now from adducing evidence on this issue. It would for that reason be unfair to allow the new point to be raised. Chilcotin Pty Ltd v Cenelage Pty Ltd [1999] NSWCA 11 (unreported); Coulton v Holcombe (1986) 162 CLR 1 at 7-8; Water Board v Moustakas (1988) 180 CLR 491 at 497.”
The claimants also submitted that the change of stance by the plaintiff had prejudiced it.
“It was in reliance [on] the statement of the opponent’s case in the Particulars and Outline of Submissions below that the claimants:
(i)agreed to the consent orders made by Bryson J below on 2 August 2002 by which the proceedings were listed for hearing 5 days later with the Plaintiff allowed only 1 business day for the preparation of evidence;
(ii)agreed to the urgent hearing on 7 August 2002 proceedings;
(iii)prepared evidence;
(iv)cross examined witnesses;
(v)prepared written submissions and argued the case at hearing; and
(vi)elected not to brief counsel.
The claimants would have conducted the hearing in the Court below differently if it had been aware that the law in Halpin would be challenged.”
The claimants then submitted:
“For that reason it would be unfair if the opponent were to be allowed to reverse its previously stated position on appeal. Browne v Dunn (1894) 6 R 67 at 75-76, University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481 at 483, Multicon Engineering Pty Ltd v Federal Airports Corporation NSW (1997) 47 NSWLR 631.”
The claimants then turned their attention to the following statement in the plaintiff’s first written submissions to this Court:
“where the Council was obliged to give effect to the judgment of Cowdroy J in Halpin v Sydney City Council (2000) 110 LGERA 464, the Opponent was left with little commercial alternative but to commence proceedings against the Claimants, on the assumption that the decision in Halpin’s case was correct ….”
The claimants submitted that the plaintiff:
“does not therefore seek the court’s leave claiming that it made a mistake, but rather admits that it has reserved a point for appeal which it was aware of at first instance but did not press for ‘commercial’ reasons. Such tactics should not be encouraged by the Court as being inconsistent with the public interest of finality in court proceedings.”
The claimants then referred to Isaacs J’s statement in Rowe v Australian United Steam Navigation Co Ltd (1909) 9 CLR 1 at 24:
“it is a sound general principle, leading not only to the maintenance of fair play, but also to the repression of unnecessary litigation, that parties must be bound by the course they deliberately adopted at the trial.”
The claimants also referred to Coulton v Holcombe (1986) 162 CLR 1 at 7.
Whether Halpin’s case can be considered: the plaintiff’s arguments in response
The plaintiff responded in the following way. It said that whether Halpin’s case was correct was a pure question of law not depending on the finding of additional or different facts. Hence the point could be taken on appeal: Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438. The plaintiff argued that there had been an acute need for an urgent hearing and decision. This was occasioned by the need to comply with a condition in a put and call option entered into by the plaintiff with proposed purchasers of lot 1 for $950,000. The condition required lodgement of a development application with the Council by 7 August 2002. If that condition was not complied with, either party could terminate the put and call option deed. This urgency made it sensible for the parties to present argument to the trial judge on the assumption that Halpin’s case was correct. Even if the plaintiff had attempted to persuade the trial judge that the case was incorrect, and had succeeded in the attempt, that would not necessarily have induced the Council to have accepted the later decision as correct over the earlier, and there was no time to carry out the process of having the matter settled either by appealing to this Court or instituting proceedings in the Land and Environment Court and then appealing from that Court to this Court. The plaintiff accepted that the more orthodox course would have been to advance a final submission that Halpin’s case was wrong and flag an intention to debate its correctness on appeal, and that it had not done these things. But the plaintiff submitted in substance that it had been sensible for it to concede the Halpin point against itself, and any procedural error of the kind indicated should not count against it. The plaintiff further submitted that the correction of Halpin’s case was an important matter of public interest, since the case had reversed more than two decades of established law under the strata titles legislation by a side wind, and it should be allowed to agitate the question for that reason too.
The plaintiff said it did not apply to join the Council. It had no dispute with the Council, since the Council had received the development application (coupled with the court-ordered consent of the body corporate), and was considering the development application on its merits. If the Court of Appeal made a declaration reflecting the view that Halpin’s case was wrong, there was no reason to believe that the Council would not respect it or that it would not continue to process the development application.
As to the claimants’ contention that the development application related to areas of common property, the plaintiff submitted as follows. First, no finding had been made by the trial judge supporting it. All the trial judge said was:
“The proposed development is said by the plaintiff to be solely within its own lot. This is true except for the possibility that there may be some penetration of the common property screws and other fastenings. Until more detailed plans come into existence, the degree of this possibility occurring cannot be assessed. The plan (Exhibit DX06) shows that the frontage to Walker Street is common property. One goes up a series of steps. There is a substantial planter to the right and to the left and then there are nine concrete columns, all of which are part of the common property. Immediately behind the northernmost of these columns is not 1 owned by the plaintiff. At present there is a substantial area of open space at the entrance to lot 1 before one gets to the existing entry doors into the plaintiff’s unit.”
The plaintiff submitted that a “possibility” was not a fact. (In this regard, the claimants submitted that that passage in the trial judge’s reasons for judgment was not a finding of fact but a record of the plaintiff’s argument.) The plaintiff further submitted that there was evidence before the trial judge from Mr Scurr that the work proposed was entirely within the boundaries of lot 1. Not only did Mr Scurr give evidence to that effect, but Mr Taylor did as well. Finally, the plaintiff submitted that changes in relation to planter boxes and entrance arrangements were no part of the development application; they were part of a settlement offer dated 18 July 2002 and were only to be undertaken if the body corporate desired it; and while Mr Taylor was cross-examined about it, the fact remains that it was never part of the development application itself. These arguments were advanced in the “Opponent’s Submissions in Reply” dated 18 September 2002. In response, in their submissions dated 24 September 2002, the claimants said: “Whilst no direction was made for a reply to that document, the submissions raise new matters including submissions as to facts which are in error, and require correction on behalf of the claimants.” The letter dealt with three matters. None of the three matters concerned the factual issues about whether the works contemplated by the development application fell within areas of common property.
The plaintiff conceded that the effect of ss 20(1)(e), 20(2)(c) and 71(1) of the Land and Environment Court Act might well be that if the Council had wrongly refused to receive the development application, then the plaintiff would have had to have gone to the Land and Environment Court for appropriate relief. But the Council had now received the development application. The relief which the plaintiff sought against the body corporate was to the effect that the body corporate had no right to prevent the plaintiff from lodging the development application, and the Land and Environment Court Act did not deprive the Supreme Court of jurisdiction to determine that question.
Whether Halpin’s case can be considered: the claimants’ reply
The claimants responded to the plaintiff’s contention that there was no need to join the Council because the Council had now accepted the development application with the written consent of the body corporate as follows. They drew attention to two parts of the affidavit evidence of Mr Scurr, a director of the plaintiff, to the effect that “Council” had advised him that a development application could not be lodged, or alternatively approved, until the body corporate’s consent had been obtained. They also drew attention to a statement in the printed development application form to the effect that the body corporate’s consent was needed. They said that the body corporate’s consent had been provided “only” to comply with the orders of the trial judge which were challenged in the application for leave to appeal, and on the basis of an undertaking by the plaintiff to the Court of Appeal to withdraw the development application if the orders of the trial judge were set aside – an undertaking proffered in lieu of a stay of those orders which the body corporate had been seeking. The body corporate said: “On the basis of those facts it is extraordinary that the opponents submit … that the fact that the DA has now been lodged should be in any way determinative of any matter now before the Court”.
Should this Court permit argument on the correctness of Halpin’s case?
The insistence on the part of the claimants that this Court cannot determine the correctness of Halpin’s case and that if that is to be done the plaintiff must institute proceedings in the Land and Environment Court to which the Council is party would seem to be motivated by something other than a pure concern for procedural rectitude. The legal merits of that insistence must be examined in detail nonetheless.
The necessity of Land and Environment Court proceedings
The claimants contended and the plaintiff agreed that if the plaintiff had wished to challenge the Council’s refusal to receive the development application without the body corporate’s consent, it would have been necessary to have instituted proceedings in the Land and Environment Court against the Council. Is this so? The relevant sections of the Land and Environment Court Act 1979 are as follows. Section 20(1)(e) provides:
“The Court has jurisdiction … to hear and dispose of: …
(e) proceedings referred to in subsection (2).”
Section 20(2)(a) and (c) provides:
“The Court has the same civil jurisdiction as the Supreme Court would, but for section 71, have to hear and dispose of proceedings:
(a)to enforce any right, obligation or duty conferred or imposed by a planning or environmental law or a development contract, …
(c)to make declarations of right in relation to any such right, obligation or duty or the exercise of any such function … .”
Section 71 provides:
“(1) Subject to section 58, proceedings of the kind referred to in section 20 (1) (e) may not be commenced or entertained in the Supreme Court.”
Section 58 is irrelevant. Section 20(3)(a) defines “a planning or environmental law” as including the Environmental Planning and Assessment Act 1979 and s 20(3)(b) provides that the expression includes any statutory instrument made thereunder. The duty of the Council to consider the development application created by the Act and the Regulations is an obligation or duty conferred by a planning or environmental law. Hence the parties are correct in agreeing that proceedings for a declaration that the Council was obliged to accept the development application whether or not the body corporate consented, or for an order of mandamus that it accept the development application, are proceedings over which the Land and Environment Court has exclusive jurisdiction. The same is true of proceedings for a declaration as to the duties of the Council in relation to the development application after that time.
Is litigation against the Council necessary before Halpin’s case can be considered?
If it is the case that the body corporate urged the Council to refuse to receive the development application without the consent of the body corporate, and if it is the case that the Council refused to receive the development application without that consent, a challenge by the plaintiff to the conduct of the Council would require the institution of proceedings against it as a defendant in the Land and Environment Court. But what the plaintiff challenged was not the Council’s stance, but the refusal of the body corporate to give its consent. If the plaintiff is permitted to challenge the correctness of Halpin’s case in this Court, and if as a result of that challenge it turns out that it was not necessary for the consent of the body corporate to be given, a future issue might arise with the Council. The Council might contend that a holding in favour of the plaintiff on that point does not mean that the development application which it has accepted is one which it is obliged to consider in the ordinary way. Is there any evidence that it has adopted or will adopt that stance?
Moreover, had Halpin’s case been argued by counsel at trial in similar fashion, it does not seem likely that an interlocutory determination at trial would have avoided the appeal or shortened it in any way.
Finally, and here the consequence of this being an interlocutory proceeding becomes material to the interests of justice, it could not be said that an interlocutory determination giving rise neither to res judicata nor issue estoppel upon the correctness of Halpin’s case, has the potential to prejudice the claimants in the way that, in theory at least, a final determination might do. It remains open to the claimants to seek to argue that matter in any subsequent proceedings. Nor are they precluded from agitating an appeal on damages, once a final determination is made upon that issue. Thus while therefore the relief Cameron claims now is contrary to the basis on which Cameron as Plaintiff claimed relief below (in no longer assuming and accepting the correctness of Halpin’s case) the result will still be the same, if the plaintiff is successful. That result encompasses the same potential damages, and the same capacity to pursue its development application, than if based solely on consent being unable to be withheld. Both matters can be appealed as of right, once they cease to be interlocutory, given that the quantum of damages sought exceeds $100,000.
In reaching the conclusion I do, that Cameron is, exceptionally, not to be held bound by the course adopted at trial, taking into account the matters earlier noted, I consider that in reality what Cameron is thereby permitted to do is uphold the result (putting in a development consent without hindrance from the Owners’ Corporation) in a different way. Thus I do not find the distinction decisive between compelling a consent and concluding no consent is required. The result in substance is the same.
Finally, I agree with what is said by Heydon JA in relation to the non-joinder of North Sydney Council. In particular I agree with his conclusion that the orders here contemplated do not directly affect the Council’s rights against or liabilities to the plaintiff when there is no res judicata or issue estoppel. This is when the relevant development application has been lodged and remains open for consideration or rejection in accordance with the proper approach for Council to take in hearing objections if made by the other lot owners pursuant to s79 of the Environmental Planning and Assessment Act 1979 (and the Owners’ Corporation, if it has an interest in the matter). In particular no declaration is contemplated by Heydon JA. Nor would I do other than make the orders proposed by Heydon JA, essentially denying leave to appeal and ordering costs against the claimants in the manner proposed, with a stay of twenty-eight days to permit argument on costs.
I agree with the reasons given by Heydon JA for concluding that Halpin’s case was not correctly decided. There is nothing I can usefully add to them.
Like Heydon JA I see no utility in considering the reasons given by Young CJ in Eq in relation to his conclusion that the Body Corporate’s refusal to consent derogated from the fee simply in Lot 1 owned by the plaintiff and thus that he was bound to give the consent, on the assumption that Halpin’s case was correctly decided so that consent was required. I should merely make two observations. First, though Young CJ in Eq posed the relevant question as he saw it at the commencement of the trial in terms of whether there was any fiduciary obligation on an Owners’ Corporation to an owner of a lot to give consent and, if so, whether that duty had been breached, his ultimate conclusion appears not to have been so based. This may have been because the delineation of the obligations of the Owners’ Corporation by statute under the Strata Schemes Management Act 1996 (NSW) may not comport with a fiduciary obligation. However, I need express no view on that and expressly refrain from doing so.
Second, his judgment did not deal with whether, in giving or withholding consent, it would be a fraud on the relevant power, to deny that consent (see Houghton v Immer(No. 155) Pty Limited (1997) 44 NSWLR 46), taking into account the purpose of the power and the functions of the Owners’ Corporation under the Strata Schemes Management Act 1996 (NSW). Again I need express no view on that. Neither that proposition, nor the related question of fraud on the minority were fully argued.
CONCLUSION
In summary, I agree that leave is needed, the correctness of Halpin’s case can and should be considered, and that when so considered it is, with respect, incorrect. I would make the orders proposed by Heydon JA.
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