Radford v Bellevue Apartments Pty Ltd
[2008] WASC 291
•28 NOVEMBER 2008
RADFORD -v- BELLEVUE APARTMENTS PTY LTD [2008] WASC 291
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2008] WASC 291 | |
| 11/12/2008 | |||
| Case No: | CIV:2599/2008 | 28 NOVEMBER 2008 | |
| Coram: | BEECH J | 27/11/08 | |
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Application to extend operation of caveats dismissed | ||
| B | |||
| PDF Version |
| Parties: | KEVIN WILLIAM RADFORD CAROL ANN RADFORD BELLEVUE APARTMENTS PTY LTD MALCOLM RAYMOND DAY RODNEY ALLAN SMITH CHANDROO GOLPALDAS DARYANANI LAVINA CHANDROO DARYANANI FIONA ELIZABETH FOREMAN THE REGISTRAR OF TITLES |
Catchwords: | Real property Caveats Strata Title Common property Interest of owners of lots in common property Whether owner of one lot in a strata plan has a caveatable interest in the interest in the common property of an owner of another lot Whether right to enforce by-laws of strata company gives rise to a caveatable interest in the common property of an owner of another lot |
Legislation: | Strata Titles Act 1985 (WA) s 17 Transfer of Land Act 1983 (WA) s 138C |
Case References: | Bashford v Bashford [2008] WASC 138 Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42 Jandric v Jandric [1999] WASC 22 Milstern Retirement Services Pty Ltd v Owners Strata Plan No 22521 [2006] NSWSC 301 Nullagine Investments Pty Ltd v The Western Australian Club Inc (1993) 177 CLR 635 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Caveats K663776, K663777, K663778 and K663779
- CAROL ANN RADFORD
Plaintiffs
AND
BELLEVUE APARTMENTS PTY LTD
First Defendant
MALCOLM RAYMOND DAY
RODNEY ALLAN SMITH
Second Defendants
CHANDROO GOLPALDAS DARYANANI
LAVINA CHANDROO DARYANANI
Third Defendants
FIONA ELIZABETH FOREMAN
Fourth Defendant
THE REGISTRAR OF TITLES
Fifth Defendant
Catchwords:
Real property - Caveats - Strata Title - Common property - Interest of owners of lots in common property - Whether owner of one lot in a strata plan has a caveatable interest in the interest in the common property of an owner of another lot - Whether right to enforce by-laws of strata company gives rise to a caveatable interest in the common property of an owner of another lot
Legislation:
Strata Titles Act 1985 (WA) s 17
Transfer of Land Act 1983 (WA) s 138C
Result:
Application to extend operation of caveats dismissed
Category: B
Representation:
Counsel:
Plaintiffs : Mr T M Retallack
First Defendant : Mr J F Park
Second Defendants : Mr J F Park
Third Defendants : Mr J F Park
Fourth Defendant : Mr J F Park
Fifth Defendant : Mr J F Park
Solicitors:
Plaintiffs : Maxim Litigation Consultants
First Defendant : Park Legal Solutions
Second Defendants : Park Legal Solutions
Third Defendants : Park Legal Solutions
Fourth Defendant : Park Legal Solutions
Fifth Defendant : Park Legal Solutions
Case(s) referred to in judgment(s):
Bashford v Bashford [2008] WASC 138
Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42
Jandric v Jandric [1999] WASC 22
Milstern Retirement Services Pty Ltd v Owners Strata Plan No 22521 [2006] NSWSC 301
Nullagine Investments Pty Ltd v The Western Australian Club Inc (1993) 177 CLR 635
(Page 4)
- BEECH J:
(These reasons are an edited version of the reasons delivered extemporaneously on 28 November 2008.)
Introduction
1 The applicants own one of the five lots in strata plan 45236. That strata plan comprises apartments known as the Miami Apartments. The second to fourth respondents (the co-owners) own the other four lots. The first respondent was the original vendor of the property. The fifth respondent is the Registrar of Titles and has played no part in these proceedings.
2 (In the originating summons dated 26 November 2008, the parties are incorrectly described as applicants and respondents. Order 58 r 19(2) of the Rules of the Supreme Court 1971 (WA) requires the parties to be described as plaintiffs and defendants. Nonetheless, I will continue to refer to the parties as applicants and respondents, as counsel did in the course of the hearing.)
3 The applicants seek orders under section 138C of the Transfer of Land Act1893 (WA) extending the operation of caveats they have lodged against the co-owners' titles. For the reasons that follow, I would not make an order extending the operation of these caveats. In summary, I am not persuaded that the interest claimed in the caveats has or may have substance. Further, I am not persuaded that the amendment of the caveat sought by the applicants should be permitted, or that the interest claimed in the caveat, if it were amended as proposed, has or may have substance.
The caveats
4 The certificates of title in respect of the five lots are annexures KRW1 to KRW5 of the affidavit of Mr Kevin Radford, one of the applicants. Taking the certificate of title in respect of lot 1 as an example, under the heading Land Description are the words 'lot 1 on strata plan 45236 together with a share in any common property as set out on the strata plan'.
5 The second schedule to the certificate of title sets out limitations, interests, encumbrances and notifications. That schedule includes two items. The first is 'interests notified on the strata plan and any amendments to lots or common property notified thereon by virtue of the provisions of [the Strata Titles Act1985 (WA)]'. The second refers to the caveats the subject of this application.
(Page 5)
6 Each caveat is in the same form. Under the heading Description of Land, 'The common property the subject of Strata Plan 45236' is written. That is said in the caveat to be the whole of the property in certificate of title volume 2575, folio 796. As I will explain later in these reasons, that is an incorrect description of the land the subject of the caveat and its relationship to the certificates of title of the co-owners.
7 The estate or interest claimed in the caveat is stated to be as 'tenant in common of the common property in Strata Plan 45236 pursuant to section 17(1) of the Strata Titles Act in shares proportional to the unit entitlement of the Caveators as the registered proprietor of Lot 2 on Strata Plan 45236 …' The estate or interest is said to be claimed by virtue of the matters set out in the statutory declaration of Mr Radford.
8 The caveat is a 'subject to' caveat.
9 The statutory declaration lodged with the caveats is to the following effect. The applicants have been the owners of lot 2 since 3 December 2004. The applicants agreed to purchase lot 2 by a contract made on 9 July 2002. The terms of the contract included proposed by-laws. On 8 November 2004 the strata company made new by-laws. The new by-laws are said to be different from the proposed by-laws. In the statutory declaration, Mr Radford says that the applicants are entitled to court orders that the registered proprietors of all lots be required to have the strata company repeal the new by-laws and make the proposed by-laws, and an injunction restraining the registered proprietors of lots 4 and 5 from exercising any of the rights conferred on them by the new by-laws.
10 However, counsel for the applicants accepted, correctly in my respectful opinion, that the proposed action referred to in the statutory declaration by the caveators for the rectification of the by-laws, is irrelevant to the estate or interest claimed in the caveats.
11 A second statutory declaration of Mr Radford was lodged after the caveats, but nothing turns on its contents.
Extension of caveat: Principles
12 There is no controversy between the parties as to the general principles relevant to an application to extend the operation of a caveat. I refer to the summary I gave in Bashford v Bashford [2008] WASC 138 [42] - [56]. The following propositions are of particular relevance:
(Page 6)
- (a) the 'caveator's claim' in 138C of the Transfer of Land Act is a reference to the claim made by the caveator of the estate or interest that is claimed in the caveat [46];
(b) On an application to extend a caveat there is a limited power to allow the terms of the caveat to be amended. Amendment may be permitted so as to enable the caveat to express better or more fully the interest which is claimed in the caveat. However, amendment is not permitted so as to alter the interest which is claimed and therefore claim a different interest [51].
13 Further, there is authority that it is enough to constitute a caveatable interest if a person has an interest in respect of which equity will give specific relief against the land in question: see Jandric v Jandric [1999] WASC 22 [6] and cases there cited.
14 I turn to the question of whether the caveators' claim has or may have substance.
Does or may the caveators' claim have substance?
15 Section 17 of the Strata Titles Act provides, as follows:
(1) Common property shall be held by the proprietors as tenants in common in shares proportional to the unit entitlements of their respective lots.
(2) The Registrar of Titles shall in the certificate of title to a lot certify that the proprietor holds the share in the common property appurtenant to the lot in accordance with the unit entitlement of that lot as stated in the schedule of unit entitlement registered in respect of the scheme.
16 Consistently with s 17(1) and s 17(2), the certificate of title to each lot in the strata plan describes the land the subject of the certificate of title as including, relevantly, 'a share in any common property as set out on the strata plan'. Yet the caveat describes the land the subject of the caveat as 'the common property', which in turn is described as being the whole of the land in the relevant certificate of title.
17 The description 'whole' is incorrect. The certificate of title also includes the owner's rights in lot 1. However, that is not the point of crucial significance. If that were the only defect the caveat could, in my opinion, consistent with the principles explained in Bashford [51], be amended to say 'part' rather than 'whole'.
(Page 7)
18 The more significant point is this: the certificate of title to lot 1 does not state 'the common property' as being the land or part of the land the subject of the title. Rather, it is 'a share in the common property'. That is a reference to the owner of lot 1's share in the common property. In my opinion, for reasons to be developed, the owner of lot 2 does not have an interest in the share of the common property owned by the owner of lot 1.
19 The applicants submit that:
(1) they have a clear statutory interest in the common property; and
(2) the caveat should be extended on that basis.
20 I accept the first proposition but not the second.
21 The common property and the interests of each tenant in common in the common property are conceptually distinct: Nullagine Investments Pty Ltd v The Western Australian Club Inc (1993) 177 CLR 635, 656.
22 Section 17 of the Strata Titles Act gives a proprietor of a lot an interest in the common property. It does not give a proprietor an interest in the interest of a co-owner in the common property. The caveat purports to claim an interest in the common property. However, it claims an interest in the land the subject of the certificate of title held by each co-owner. The only interest in the common property held by each co-owner is the co-owner's interest as tenant in common in the common property. Tenants in common in property do not have an interest in each other's interest in that property.
23 Thus, the caveat is, notwithstanding its terms, claiming an interest in the co-owners' interests as tenant in common in the common property.
24 The position seems to me to be as follows. Each co-owner has his or her respective share, as reflected in each certificate of title as tenant in common, in the common property. No owner has an interest in the share of other owners' interests in relation to the common property.
25 The applicants' submissions refer to New South Wales authorities (Milstern Retirement Services Pty Ltd v Owners Strata Plan No 22521 [2006] NSWSC 301 [7] and cases there cited) which recognise a proprietary interest on the part of the proprietors of lots in the common property the subject of a strata plan. However, in my opinion, the New South Wales decisions are of no relevance to the position in Western Australia. That is because the statutory scheme in New South Wales is materially different in a fundamental respect.
(Page 8)
26 Under the New South Wales legislation, common property is vested in the body corporate as agent for the proprietors. The proprietors have a beneficial interest in the common property by s 24(2) of the New South Wales legislation, that is the Strata Schemes (Freehold Development) Act 1973 (NSW). The New South Wales cases have held that the proprietors therefore have a caveatable interest as equitable tenants in common.
27 In Western Australia, by contrast, as I have said, the proprietors of lots have a registered interest as legal tenants in common in relation to the common property.
28 The conclusions which I have already stated would appear to me to be a fatal obstacle to the interest claimed in the caveats. During oral argument counsel for the applicants sought to overcome this difficulty by proposing an amendment to the terms of the caveats.
The proposed amendment to the caveats
29 The amendment proposed to the caveats was to insert the following words to what is already stated under the item 'Estate or Interest Being Claimed':
The caveators claim a right or interest to the enforcement of the by-laws relating to the common property.
30 For three reasons I would not permit the amendment that is proposed.
31 First, applying the principles summarised in Bashford [51], it does not seem to me to be permissible to make the amendment that is now sought. In my opinion, the interest sought to be claimed by the amendment is a different interest, not a better or fuller expression of the interest already claimed. The caveat, in the form in which it was lodged, claimed an interest as tenant in common of the common property. The by-laws were not mentioned in the caveat or, for that matter, anywhere in the statutory declaration. By the proposed amendment the caveators would now seek to claim an interest or right to the enforcement of the by laws. The claim in the caveat as lodged is an orthodox species of proprietary right, namely, a tenancy in common in specified property. The amendment claims that that proprietary right has, as one of its incidents, a right to enforce by-laws. In my opinion, those are rights or interests of a different character.
32 The second reason is in the alternative to the first. I am not persuaded, in any event, that the right to enforce the by-laws is an incident of the tenancy in common of the common property. Rather, both sets of
(Page 9)
- rights have a common foundation, namely, the proprietorship of the lot. To the extent that proprietors of a lot have a right to enforce by-laws that right is, in my opinion, founded on the proprietorship of the lot. It is not founded on the consequential rights, as owners of a lot, arising by operation of s 17 of the Strata Titles Act in relation to the common property.
33 Thirdly, I am not persuaded that any right of enforcement of the by-laws possessed by an owner of a lot in the strata plan is a proprietary interest in the co-owners' interests in the common property. In so concluding, it is not necessary for me to decide whether a right to enforce a specific by-law might, in other cases, depending upon its terms, constitute an interest in a lot or in common property. As I have said, it is enough to constitute a caveatable interest if a person has an interest in respect of which equity will give specific relief against the land itself.
34 In this case the by-laws of the strata company are not in evidence. Thus there is no evidence as to the content of the by-laws in relation to the common property. The applicants' submission was that the right to enforce the by-laws relating to the common property generally is an interest in the other co-owners' interests in the common property. Given the terms of the amendment proposed, that was necessarily the applicants' submission in order to sustain the proposed amendment. Without knowing the content of any by-laws that relate to the common property I am unable to be satisfied that any such by-laws might give an owner a right enforceable by injunction against the co-owners' land. Given the wide-ranging potential content of by laws relating to common property, I am not persuaded that any right to enforce the by-laws relating to the common property constitutes an interest in the co-owners' interests in the common property.
35 In summary therefore, I would not allow the amendment proposed because it seems to me to involve a different interest and, in any event, if an amendment were allowed in the terms sought, I would conclude that the claim then made does not have substance.
36 In the course of these reasons I have referred to 'any' right of an owner of a lot to enforce the by-laws. The respondent submitted that an individual owner of a lot does not have a right to enforce the by-laws. The respondent emphasised the statutory duty of the strata company under section 36(1) of the Strata Titles Act to enforce the by-laws. That submission requires attention to whether the strata company's duty of enforcement was exclusive of any right of any individual lot holder to
(Page 10)
- enforce the by-laws. It is not necessary for me to decide that question. It may be that s 83(1) of the Strata Titles Act is open to a reading wide enough so as to permit a proprietor of a lot to bring proceedings against another owner of a lot to enforce the by-laws, but I express no conclusion on that question.
37 If, contrary to my view, the amendment were allowed and it were concluded that the interest claimed in the amended caveat has or may have substance, that would lead to a consideration of the balance of convenience.
The balance of convenience
38 It is well established that interlocutory removal of a caveat will be unusual where an arguable case as to the existence of a caveatable interest has been demonstrated: Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42, 50.
39 As was emphasised in the submissions of the respondent, the passage from Custom Credit demonstrates that the purpose of a caveat is to prevent the destruction of the benefit of the proprietary interest that is claimed in the caveat. That consideration would not call for the extension of the operation of the caveat in this case. The caveat is a subject to claim caveat. On the applicants' contentions, even if the caveat were removed, a new purchaser of a lot owned by a co-owner would take his or her rights subject to the rights of the caveator to enforce the by-laws. In other words, on the applicants' contentions, the rights of one owner to enforce the by-laws against the owners of other lots is an inevitable legal consequence of co-ownership of lots in a strata plan. No caveat is needed to protect those rights.
40 Thus, the presence of this caveat would not provide any protection to the rights and interests of the caveators. Indeed, so much was conceded by counsel for the applicants. Counsel for the applicants contended that the caveats nonetheless had utility in that they served to give notice to possible purchasers of the caveators' claim.
41 For the reasons I have already given, the question of the balance of convenience does not arise on my analysis. Were the question to have arisen, I am not persuaded that the purpose of giving notice to possible purchasers would support or justify a conclusion that the balance of convenience favours the retention of the caveats.
(Page 11)
Conclusion
42 For these reasons, I am not satisfied that the interest claimed in the caveats has or may have substance, and I would refuse the application to amend the caveats. Consequently, I would not make an order extending the operation of the caveats.