The Owners of St John's Court Rivervale Strata Plan 6052 v Western Australian Planning Commission
[2004] WASC 196
•9 SEPTEMBER 2004
THE OWNERS OF ST JOHN'S COURT RIVERVALE STRATA PLAN 6052 -v- WESTERN AUSTRALIAN PLANNING COMMISSION & ORS [2004] WASC 196
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASC 196 | |
| 09/09/2004 | |||
| Case No: | PWA:1/2001 | 2 SEPTEMBER 2004 | |
| Coram: | EM HEENAN J | 2/09/04 | |
| 18 | Judgment Part: | 1 of 1 | |
| Result: | Joinder of parties to represent all former registered proprietors Declaration that former registered proprietors at date of resumption are entitled to the distribution of compensation for the common property resumed Directions as to interim and final distributions of fund paid into court and accrued interest | ||
| B | |||
| PDF Version |
| Parties: | THE OWNERS OF ST JOHN'S COURT RIVERVALE STRATA PLAN 6052 WESTERN AUSTRALIAN PLANNING COMMISSION JOHN KEITH BOWER RAYMOND HALL SONDRA MARGARET MILLER LILIAN LORETTA NALPON PATRICIA MARGARET STUART CAMPBELL-CLAUSE HILARY MARY WALTER MARIE JOSEPHA ARCHER BASIL HENRY LARSON JILLIAN ROBYN SUMNER LEE-ANNE NICOLE SEXTON CAROLINE SHERRARD JEFFREY GRAEME WALKER JOHN THOMAS LILLEY JAMES PAUL HODGES BETTY JOSEPHINE FAWCETT GEORGE ZACHARIAS COZAMANIS WILLEM LAKE BRENDA LAKE LIESBETH SUSANNA DE LEEUW EDUARD DE LEEUW GRAEME LESLIE HALL DAVID WINSLADE JULES FERRARI SUSAN MARY HEWITSON JOHN JOSEPH GLYNN DONALD BARRY CRYSTAL PHILIP ROSS HOOK SHANTHA MARY SYNDRAM LUCIANO BASSO ALAN GRAEME HARMS CHRISTOPHER JAMES CHALMERS ZIBA PTY LTD MICHAEL ROBERT MACMILLAN-SMITH SANDRA MARION MACMILLAN-SMITH GLEN LEE COOK DAVID VERNON HOGERMEER PERPETUAL TRUSTEES AUSTRALIA LTD PAUL ANTHONY TRAYNOR BRENDAN JOSEPH MOONEY ROBERT JOHN WATTERS MAREE PATRICIA WATTERS VALMAI JEAN JENKE DEANNE HELEN HAFFNER DONALD WILLIAM THOMSON ROBERTA JOSEPHINE THOMSON TREVOR JONES ROBERT TERANCE JACKSON |
Catchwords: | Strata titles Common property Resumption Parties entitled to compensation for resumption of common property Interests of registered proprietors and strata company Conversion of common property Role of strata company as representative of registered unit proprietors Agency by estoppel Changes in registered proprietors since resumption |
Legislation: | Land Acquisition and Public Works Act 1902 Land Administration Act 1997 Strata Titles Act 1985 Transfer of Land Act 1893 |
Case References: | Brown v Heffer (1967) 116 CLR 344 Fletcher v Ashburner (1779) 1 Bro CC 497; 28 ER 1259 The Owners of Habitat 74 Strata Plan 222 v Western Australian Planning Commission & Ors [2004] WASC 23 Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Applicant
AND
WESTERN AUSTRALIAN PLANNING COMMISSION
First Respondent
JOHN KEITH BOWER
RAYMOND HALL
SONDRA MARGARET MILLER
LILIAN LORETTA NALPON
PATRICIA MARGARET STUART CAMPBELL-CLAUSE
HILARY MARY WALTER
MARIE JOSEPHA ARCHER
BASIL HENRY LARSON
(Page 2)
- JILLIAN ROBYN SUMNER
LEE-ANNE NICOLE SEXTON
CAROLINE SHERRARD
JEFFREY GRAEME WALKER
JOHN THOMAS LILLEY
JAMES PAUL HODGES
BETTY JOSEPHINE FAWCETT
GEORGE ZACHARIAS COZAMANIS
WILLEM LAKE
BRENDA LAKE
LIESBETH SUSANNA DE LEEUW
EDUARD DE LEEUW
GRAEME LESLIE HALL
DAVID WINSLADE
JULES FERRARI
SUSAN MARY HEWITSON
JOHN JOSEPH GLYNN
DONALD BARRY CRYSTAL
PHILIP ROSS HOOK
SHANTHA MARY SYNDRAM
LUCIANO BASSO
ALAN GRAEME HARMS
CHRISTOPHER JAMES CHALMERS
ZIBA PTY LTD
MICHAEL ROBERT MACMILLAN-SMITH
SANDRA MARION MACMILLAN-SMITH
GLEN LEE COOK
DAVID VERNON HOGERMEER
PERPETUAL TRUSTEES AUSTRALIA LTD
PAUL ANTHONY TRAYNOR
BRENDAN JOSEPH MOONEY
ROBERT JOHN WATTERS
MAREE PATRICIA WATTERS
VALMAI JEAN JENKE
DEANNE HELEN HAFFNER
DONALD WILLIAM THOMSON
ROBERTA JOSEPHINE THOMSON
TREVOR JONES
ROBERT TERANCE JACKSON
Second Respondents
(Page 3)
Catchwords:
Strata titles - Common property - Resumption - Parties entitled to compensation for resumption of common property - Interests of registered proprietors and strata company - Conversion of common property - Role of strata company as representative of registered unit proprietors - Agency by estoppel - Changes in registered proprietors since resumption
Legislation:
Land Acquisition and Public Works Act 1902
(Page 4)
Land Administration Act 1997
Strata Titles Act 1985
Transfer of Land Act 1893
Result:
Joinder of parties to represent all former registered proprietors
Declaration that former registered proprietors at date of resumption are entitled to the distribution of compensation for the common property resumed
Directions as to interim and final distributions of fund paid into court and accrued interest
Category: B
(Page 5)
Representation:
Counsel:
Applicant : Mr M Gregory
First Respondent : Mr C S Bydder
Second Respondents : Mrs L E Rowley
Last-named Second Respondent : Mr J R Tydde
Solicitors:
Applicant : Minter Ellison
First Respondent : State Solicitor
Second Respondents : McLeods
Last-named Second Respondent : Tydde & Co
Case(s) referred to in judgment(s):
Brown v Heffer (1967) 116 CLR 344
Fletcher v Ashburner (1779) 1 Bro CC 497; 28 ER 1259
The Owners of Habitat 74 Strata Plan 222 v Western Australian Planning Commission & Ors [2004] WASC 23
Case(s) also cited:
Nil
(Page 6)
1 EM HEENAN J: The issues arising in these proceedings are very similar, but not identical, to those dealt with in the case of The Owners of Habitat 74 Strata Plan 222 v Western Australian Planning Commission & Ors [2004] WASC 23 and involve questions concerning the entitlement to moneys paid as compensation for the value of common property included in a registered strata plan which was compulsorily acquired by the first respondent.
2 Many of the legal and procedural difficulties which have arisen arose from the acquiring authority, the first respondent, treating the strata corporation as the owner and body entitled to receive payments of compensation for the common property compulsorily acquired rather than recognising the rights of the individual proprietors of lots in the strata plan at the date of the resumption in August 1996. As a consequence, compensation moneys paid by the first respondent, together with interest, in aggregate of $193,839.29 were paid into court in March 2001 giving rise to these proceedings to determine the identity of the person or persons beneficially entitled to distribution. Because of the passage of more than eight years since the resumption date, there have been many changes in the ownerships of individual units in the strata plan since then. This has led to difficulties in identifying, locating and securing representation for those former owners potentially entitled to the fund in court.
3 The parties now accept that the entitlement to the proceeds of compensation paid, and any further entitlement which may arise from the pursuit of a claim for compensation under the Land Acquisition and Public Works Act 1902 is determined by the earlier decision of The Owners of Habitat 74 Strata Plan 222 v Western Australian Planning Commission & Ors (supra) and that the fund in court should be distributed, pro rata, among the registered unit holders of the land subject to the strata plan at the date of resumption. They have largely agreed on the material facts but have applied to the court for directions and determinations of a number of procedural matters relating to the distribution of the moneys, liability for costs and taxation paid by a trustee upon income of the fund from time to time. The following narrative is taken from an agreed statement of facts prepared by the parties, a history of the proceedings as appearing from the records of the court, and from other facts which are deposed to by affidavit.
4 Overlooking the Swan River at Rivervale there is a portion of land which has been developed by the construction of units or apartments with river views, all of which are held by strata titles under the Strata Titles Act 1985. Strata Plan 6052 depicts this land between Great Eastern Highway
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- and the Swan River at 66 Great Eastern Highway, Rivervale. The applicant "The Owners of St John's Court Rivervale Strata Plan 6052" is the strata company established by the registration of this strata plan. Upon this land have been constructed a number of two-storey and three-storey unit blocks, each unit in which is subject to the strata plan. There are 150 such units or apartments, each having one unit entitlement of the total 150 unit entitlements. In addition to the units or apartments themselves, the property includes garden areas, roads, road approaches, stairways, corridors and other parts of the apartment buildings themselves which, together, constitute the common property within the strata plan. Until 20 August 1996 this included the river foreshore.
5 On 20 August 1996 (the resumption date) an area of the land by the riverfront comprising 1,872m² and part of the common property was compulsorily acquired under s 17(1) of the Land Acquisition and Public Works Act 1902. Following this acquisition, this land was vested in the first respondent, the Western Australian Planning Commission (WAPC). No buildings or other fixed improvements of the strata plan land were included in any part of the land so resumed.
6 The notice of resumption was published in the "Western Australian Government Gazette" on 20 August 1996 (p 4064). This specified that the land was "compulsorily taken and set apart for the purposes of the following public work, namely: parks and recreation - Swan River South (Rivervale)". By this notice of resumption the "owner or reputed owner" of the resumed land was designated as "Body Corporate, St John's Court". This is the same approach which was taken by this resuming authority which I described in The Owners of Habitat 74 Strata Plan 222 (supra) as a "very questionable attribution of ownership or occupation". Again, in this case, it accounts for the role which has been cast upon the applicant and the acceptance, by the WAPC, of the applicant as the claimant for compensation in respect of this land. This error is largely responsible for the legal and procedural difficulties which have since been experienced.
7 By a claim for compensation dated 4 November 1996, the strata company sought compensation for this compulsory acquisition in a total amount of $772,200. By letter of 6 March 1997 the WAPC made an offer of compensation to the strata company in an amount of $148,500. The strata company rejected that offer by letter dated 7 April 1997. The letter from the WAPC of 6 March 1997 also offered to the strata company an amount by way of "advance payment" of compensation under s 49A of the Land Acquisition and Public Works Act 1902 in the amount of $148,500 - the same figure which had been offered as full compensation. The strata
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- company accepted the offer of the advance payment by letter dated 7 April 1997, not in full satisfaction of the claim for compensation but, merely, as an advance payment.
8 When it came to actually making payment of the advance of $148,500 the WAPC appears to have hesitated because of doubts over whether or not the strata company could given a good discharge for that payment or, in other words, because of concern over whether or not it was the party solely entitled to receive such compensation.
9 The WAPC sought a deed of consent to be executed by every person who had been a proprietor of a lot in the strata scheme at the resumption date before the advance payment was made and for this deed to be executed also by all or any mortgagees of the lots in the scheme. Copies of the proposed deed were supplied by the WAPC to the strata company under cover of a letter of 5 March 1998 but were never executed by all the proprietors or mortgagees. In those circumstances the WAPC decided to pay the amount of the advance payment, together with interest accruing thereon, into court under the provisions of s 249 of the Land Administration Act.
10 On or about 19 March 2001 the WAPC paid into this Court $193,839.29 under cover of an affidavit which stated, among other things, that a "doubt has arisen as to the right or title of the applicant" to the advance payment of compensation. The sum paid into court comprised the advance payment offered of $148,500 plus interest at 8 per cent per annum from 19 November 1996 to 11 September 2000 (the interest component being $45,339.29). The WAPC requested the moneys so paid in be invested pursuant to s 250 of the Act. A second payment into court of $4,613.67 was made by the WAPC in April 2001, again under s 249. This represented interest on the advance payment amount at 8 per cent per annum from 12 September 2000 to 19 March 2001. The aggregate so paid into court was $198,452.96.
11 As in the notice of resumption, the affidavit filed with the first respondent's request for payment into court of the moneys advanced together with interest nominated "The Owners of St John's Court Rivervale Strata Plan 6052" as the owner or reputed owner, as the ex parte applicant, and as the claimant for compensation. It annexed a copy of the notice of resumption and the compensation claim together with a copy of the correspondence leading to the rejection of the offer for settlement of the claim but resulting in acceptance of the advance payment offered.
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12 The present applicant, the strata company, issued a chamber summons in these proceedings on 21 July 2003 seeking an order that all the moneys paid into court, together with any accrued interest, be paid out to the strata company. The applicant also filed a minute of proposed directions seeking orders that persons who had been proprietors of lots in the strata scheme at the resumption date, but who had subsequently sold those lots ("former proprietors"), should be notified of the application and be given an opportunity to be heard. A list of what were believed to be contact addresses for those former proprietors was compiled by the strata company and a description of steps taken by the applicant to contact those persons was set out in an affidavit of Mr C M H Westcott sworn 18 July 2003.
13 During the period from the resumption on 20 August 1996 until July 2003, the ownership of many of the units in the strata plan had changed. On the basis of the records then available to the strata company, about 96 of the 150 units had been sold or otherwise disposed of between those dates. Regrettably, the strata company records of former proprietors were not complete and the applicant could not then ascertain or verify all the changes in ownership nor the identity and present address of all the former proprietors. Although the applicant disclosed these changes in the ownership of units occurring since the date of resumption to the court and endeavoured, as best it could, to supply details of the former owners, it did not then accept that the former owners were entitled to receive, pro rata, the compensation moneys and interest. The applicant's position was that the moneys paid into court should be distributed to the applicant corporation for its own purposes. It further submitted that it was not just or equitable for the moneys to be distributed to each of the individual registered unit proprietors at the date of resumption. That posture did not change until about February this year when the decision in The Owners of Habitat 74 Strata Plan 222 v Western Australian Planning Commission & Ors (supra) was given. However, in the light of that decision the applicant now accepts that the persons beneficially entitled to the proceeds of the compensation paid, and to any further compensation possibly to be paid, and interest, are the former proprietors or their respective assignees and it has taken steps to facilitate their identification so that such an eventual distribution can be made.
14 This reference to the interest of a pro rata share in the compensation moneys and interest of any assignee or assignees of former proprietors is to be taken to be a reference to an assignee or successor to that part of the personal property of an individual former proprietor. Any interest in the land resumed, including common property, was, by fact and virtue of the
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- compulsory acquisition, converted immediately to a right to claim compensation for the compulsory acquisition so changing in character from an interest in land, or a proprietary interest, to a personal claim for money, by reason of s 18(2) of the Land Acquisition and Public Works Act. See also Fletcher v Ashburner (1779) 1 Bro CC 497; 28 ER 1259 and Brown v Heffer (1967) 116 CLR 344. This conversation of a proprietary interest to a personal right therefore affects any succession to the rights of a former unit proprietor. For example, a subsequent sale or disposition of his or her title to the unit by a former proprietor will only convey the interest in the land and not this personal entitlement to compensation (subject of course to any express provision to the contrary in the agreement for sale). Similarly, if the interest of a former unit proprietor has been transferred to another or others after death by will, the interest in the compensation moneys passing in the event of such a succession will be determined by any applicable provision of the will relating to personal property. Consequently, the order made on this application insofar as it relates to interests of former proprietors which have been assigned, relates only to assignments which effect a transfer of that personal interest.
15 Because the chain of correspondence passing between the WAPC, on the one hand, and the applicant on the other, in 1997 relating to the claim for compensation for the compulsory taking of the land and offers of advance payment, involves the applicant being treated as the sole party entitled to such compensation, a peripheral question has arisen over whether or not, in these circumstances, the applicant strata corporation was, or should be taken to have been, acting as agent for the various registered unit proprietors at the date of resumption. Although the question is, largely, outside the scope of these proceedings, it may yet be of significance because of the possibility, or indeed probability, that now that the true entitlement to the compensation has been determined, some or all of the former unit owners may wish to continue with the claim for compensation initiated under the Land Acquisition and Public Works Act 1902 in the name of the applicant.
16 It is for this reason that the second respondents contend that the claim for compensation which was submitted by the applicant strata company in November 1996 was a claim by, or a claim which should be treated as being made by, the various unit owners at 20 August 1996. Clearly enough the applicant did not make that claim expressly as agent for the registered unit holders at the date of resumption for it continued to assert that it was solely entitled to the compensation moneys until February 2004. However, the first respondent, as the acquiring authority,
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- did not question the title of the applicant to receive the compensation moneys until doubts arose about its ability to give a good and effectual discharge for the advance payment offered and accepted by the applicant and payable in March 2001. Now, both the applicant and the first respondent acknowledge and accept that the parties rightfully entitled to participate in distribution to the compensation are only the registered proprietors of units at the date of acquisition (or their assignees).
17 While it is not a matter upon which extensive submissions have been received, nor is its resolution vital to the determination of the issues arising on this application, my view is that what has occurred creates an agency by estoppel binding the applicant and the first respondent in favour of the registered proprietors of the units at the date of resumption which must prevent the applicant or the first respondent from denying that, in all material respects in relation to this claim for compensation, the claim which was lodged, and the acceptance of the advance payment made by the first respondent are to be treated as having been made by the applicant as agent for the persons entitled at law to the compensation.
18 After the payment into court an order for directions was made on 30 July 2003 requiring the applicant to give notice of the proceedings to the proprietors holding units at the resumption date. This notice was to be given by ordinary mail to those former proprietors for whom a forwarding address had been identified and general notice was also to be given by publication in "The West Australian" newspaper. It subsequently emerged that many of the names and addresses of those proprietors recorded by the strata company or derived from its records were wrong or out of date.
19 The order for directions of 30 July 2003 also required that any persons notified, who wished to be heard on the application, should file and serve a notice of intention to be heard within 21 days and for the applicant strata company to file an affidavit reporting on the results of the attempted notifications and of any responses received. By an affidavit from Mr M Gregory of 23 September 2003, it was reported that mail notifications were despatched on 12 August 2003 and that a newspaper notice was published on 9 August 2003. Many of the responses reported in that affidavit revealed that a number of former owners' contact addresses as recorded by the applicant were incorrect.
20 One of the second respondents, Robert Terance Jackson, filed a notice of intention to be heard on 1 September 2003 revealing that he had owned two units in the strata scheme at the date of resumption. A further
(Page 12)
- order for directions was made on 26 September 2003 containing programming orders.
21 However, it became apparent that the efforts to locate former registered proprietors of units in the strata plan had only been partly successful and that there was a large number of former owners who may not have received notice of the proceedings. Accordingly, on 11 March 2004 a further order was made directing the applicant and the WAPC to make further efforts to identify former owners, to attempt to inform them of the proceedings and to report to the court on the result of those efforts. This was done and the results reported to the court by the affidavit of K M Richardson sworn 12 May 2004.
22 The matter was relisted for 16 June 2004 and before then, many former unit owners had notified the court of their intention to be heard. 46 of those owners were represented by counsel at the hearing on 16 June and they, and Mr R T Jackson, were then joined as second respondents to the application. Another six persons had filed notices of intention to be heard before 16 June 2004 but none of these appeared in person or by counsel at the hearing of 16 June. Including Mr Jackson (who previously owned two units), this accounts for about 52 of the units held at the date of resumption. In some cases, one or more of the second respondents owned more than one unit and the court has been informed by counsel that, in aggregate, the second respondents named represent 66 of the 150 units held at the date of resumption, leaving up to 84 unit holders who have not appeared. The applicant has succeeded in locating the addresses of 137 of the former owners and has received acknowledgement of notifications from 109 former owners. Counting Mr Jackson's two units, all but 11 unit holders have been identified and located.
23 In these circumstances, I also made an order on 16 June 2004, directing that the 46 named second respondents should be taken as representing, not only their own individual interests, but also the interests of all other registered unit owners at the date of resumption - see Rules of the Supreme Court O 18 r 12(2) and r 13.
24 With the consent of all parties represented, and in order to avoid further delay to an individual with an acknowledged interest while additional steps were made in an effort to locate other former owners, an order was made on 11 March 2004 directing that, from the moneys held in court, two 150th shares, including interest thereon to 29 February 2004, should be paid out to the second respondent, Robert Terance Jackson, and that has been done.
(Page 13)
25 Since the advance payments of compensation were paid into court, the money has been invested by the Public Trustee and has continued to accrue further interest. This interest constitutes income and is potentially liable to taxation. Although there is no detailed evidence upon the point, I am informed that the Public Trustee has filed annual income tax returns since these moneys have been under his control as trustee and has paid income tax thought to be due on the interest earned. Counsel for the second respondents has raised an issue over whether or not these earnings are assessable in the hands of the Public Trustee and has further submitted that, even if they are, there may be different amounts of taxation due depending upon whether or not the earnings are treated as being income of the applicant, as income of a fund to which no beneficiary was for the time being presently entitled, or as income for each of the former unit proprietors who were at all times beneficially entitled in which case taxation would depend on the personal circumstances of each of the proprietors of the 150 units and their respective marginal tax rates, if any.
26 For this reason, counsel for the second respondents has sought an order that the first respondent should apply for and obtain a refund of any tax which may have been wrongly assessed or paid and should indemnify persons entitled to the compensation paid for any excess tax which may have been paid and which is irrecoverable, together with interest.
27 However, I do not consider that the court can, or should, entertain such an application in these proceedings. In the first place, the Public Trustee is not a party to the proceedings, nor is there any detailed evidence as to the basis upon which the trustee may have returned income of the fund to the Federal Commissioner of Taxation, nor the basis upon which tax was estimated or assessed. While there may be grounds for the unit owners at the date of resumption to query the taxation treatment of the income arising from the fund and, perhaps to apply for an amendment to any assessments which may have been made, that is by no means certain. Any such enquiry would need to ascertain the basis upon which the income of the fund was returned for taxation, the basis upon which any assessment for income tax was made and give consideration to whether or not that was, in law, correct and, if not, to evaluate the financial effect, if any, of the correct approach, to be followed, if necessary, by an application to the Commissioner of Taxation for any necessary or appropriate adjustments. That is quite beyond the scope of the issues arising in these proceedings. Furthermore, the issue essentially concerns the conduct of the Public Trustee as trustee of the fund. If any of the beneficiaries who have now been identified are dissatisfied with the performance of the duties resting upon the trustee, that can be raised
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- directly with the trustee. If still dissatisfied, the beneficiaries will be entitled to call for an account or to pursue other remedies against the trustee. On the limited evidence presently available, and without hearing full argument, particularly from the Public Trustee, it seems at least to be a doubtful proposition that the first respondent should be made answerable for any conduct of the Public Trustee in this respect. In any event, no order in these proceedings will affect the capacity of the persons entitled to these moneys to raise these issues with the Public Trustee or their recourse to the remedies available to any beneficiary seeking to review his or her trustee's conduct.
Orders
28 For these reasons, and to give effect to these conclusions, I consider that declarations and orders to the following effect should be made:
(a) That the moneys paid into court by the first respondent as advance payments of compensation for the resumption of the common property contained in Strata Plan 6052 which occurred on 20 August 1996 and all interest paid or accruing thereon should, subject to the payment of costs as provided below, be distributed to those registered proprietors of lots in Strata Plan 6052 who were registered as such on 20 August 1996.
(b) That each of those registered proprietors is entitled to participate in distribution of the compensation paid, together with interest accrued or accruing thereon, in proportion to the unit entitlements of their respective lots in the strata plan recorded at the date of resumption, except where that entitlement to receive compensation for the compulsory acquisition has been assigned in which case the distribution shall be to the assignee, or assignees or further assignees of that entitlement;
(c) The first respondent shall have the responsibility of tracing, as far as is possible, the registered unit holders at the date of resumption and of making interim and final distributions of the moneys paid into court, including any interest accrued or accruing thereon, to the registered proprietors or any assignees in accordance with their respective unit entitlements, within three months of the date of this order;
(d) Within three months of the date of this order the first respondent do report to the court on the results of its efforts to identify such owners or assignees and of its efforts to make any interim or final
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- distribution of the moneys to the persons declared to have been entitled in distribution;
- (e) There be liberty for the applicant or any of the second respondents to apply for the removal of the first respondent from its role appointed of tracing the registered proprietors of units at the date of resumption and of making interim or final distributions of the compensation moneys and interest and for the applicant or any of the second respondents to apply for the appointment of another person or body to undertake those tasks if no satisfactory progress in tracing such owners or in making the distribution of the moneys to the registered proprietors or any assignees has occurred after three months from the date of this order;
(f) Upon it being determined (whether by agreement by the paying parties or by taxation) what allowance for costs, expenses or other outgoings should be made to the applicant and to the second respondents for these proceedings, those allowances may be deducted from the compensation moneys held and paid to the applicant and to the second respondents for their own use. The balance of the compensation moneys including interest accrued or accruing shall be distributed to the registered proprietors at the date of resumption or their assignees in proportion to their several unit holdings. The written receipt by each such registered proprietor or his or her assignee, personal representative or agent authorised in writing, shall be a sufficient discharge for the payment of his or her entitlement;
(g) Upon finalisation of any claims for the recovery or costs or expenses associated with these proceedings, or with the claim for compensation (whether agreed by the paying parties or taxed) the first respondent or any other person who may be appointed to make the distributions, shall apply to the court for payment out of any moneys remaining in court and shall, within 14 days of receipt thereof, cause those moneys to be distributed to the registered proprietors or assignees who have been identified and found without further deduction in proportion to their several unit entitlements;
(h) The share or shares of the advance payments of compensation and interest accrued or accruing payable to registered proprietors of units at the date of resumption who cannot be identified and located within three months of the date of this order shall be paid into a special account or fund in accordance with further orders or directions of the court to be made in that event. The first
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- respondent, or any person appointed to make those distributions, or any other party interested, may then apply in accordance with any directions which the court may then make, to be authorised to pay those moneys to such authorities or trustee as the court may then direct to be held in accordance with such directions as the court may then give for eventual distribution to those entitled and, failing distribution within such time as the court may direct, to be dealt with in such manner a the court may in future direct.
Costs
29 The issue of costs relating to these proceedings, the initial claim for compensation, the efforts made to identify and locate the registered proprietors of units in the strata plan at the date of resumption, and the further steps necessary for the location of the parties entitled to distribution of the compensation moneys and interest were addressed in submissions. Largely the parties accept that orders for costs to be made should follow the general pattern adopted in similar circumstances in The Owners of Habitat 74 Strata Plan 222 v Western Australian Planning Commission & Ors (supra). It is convenient briefly to summarise the underlying approach to be taken in this regard.
30 The first category or character of costs relates to the claim for compensation for compulsory acquisition which, conventionally, are payable by the acquiring authority at least up to the point when the payment of due compensation has been made. In this case there has been no final acceptance of the amount of compensation offered by the first respondent and it is possible that the original claim for larger compensation may be pursued by negotiation or, possibly, by the commencement of proceedings. It is, therefore, not possible at present to deal finally with costs of this character.
31 The second category or character of costs are those associated with, or arising from, the attempts to identify, trace and communicate with the registered proprietors of units at the time of resumption both in relation to the conduct of these present proceedings and, further, to the extent in the future that may be necessary to effect eventual distributions. In my view, this task has been rendered necessary by the original mistake of the first respondent in identifying, in the notice of resumption and in the early procedures to deal with and respond to the claim for compensation, the strata company as the owner or reputed owner of the resumed land. Had the first respondent then correctly identified the registered proprietors of units in the strata scheme at the date of resumption as being the persons
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- entitled to receive, pro rata, any compensation for the compulsory acquisition, the difficulties in identifying and tracing those unit proprietors which have arisen due to the passage of time would probably have been largely, if not entirely, avoided.
32 Accordingly, I consider that costs relating to the efforts to identify and trace those persons, and to effect distributions to be made in accordance with the orders of the court, should be met by the first respondent. It is for this reason that the responsibility for undertaking such further tasks to trace the persons entitled and to effect the distributions has been placed upon the first respondent by the orders proposed subject always, to the right of others to apply for some other person or body to be appointed to perform that obligation if it should be established that this is not being adequately done by the first respondent. In that eventuality, and subject to considerations which might arise at the time, it would seem to follow that the costs of appointing any such other person or body and completing that task should also be paid by the first respondent.
33 A third category of costs relates to these proceedings themselves arising from the necessity to have the court determine a question of law as to who was in fact entitled in distribution to the compensation moneys. Until the earlier decision in The Owners of Habitat 74 Strata Plan 222 (supra), I am satisfied that there was cause for the first respondent to apply to the court for directions as to who was entitled in distribution to these moneys, or to pay the money into court pending a decision on the issue as has been done. Had that been done earlier, it is likely that the resulting proceedings would not have been so protracted and it is for this reason that I have concluded that special orders should be made in respect of the second category of costs which I have earlier described.
34 In cases where it is necessary for the court to give directions concerning the management or entitlement to a fund, whether a trust or other fund to which a real question about due entitlement exists, the usual rule is for the cost of the proceedings to be paid out of the fund. I consider that that should be applied in the present case but with one qualification. The reason for the qualification comes from the rule that the person in control of the fund, whether a trustee or otherwise, is expected to adopt a neutral position, putting all relevant circumstances before the court and to abide by any eventual decision of the court without pressing for a particular outcome in his, her or its own interest. In the current proceedings, the applicant originally adopted, and maintained until about February 2004, the position that it was solely entitled to all the
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- compensation moneys to the exclusion of any unit owners in the strata plan, whether owners at the date of resumption or at any other time. To the extent that the applicant has incurred costs in advancing its own claim or opposing the claims of the registered proprietors of the units at the date of resumption, or to the extent to which the cost of the proceedings have been increased by that posture of the applicant, I do not consider that the applicant may recover any costs from the fund.
35 In the process of taxation, the taxing officer will need to examine any costs claimed by the applicant in order to exclude costs claimed or incurred because of that posture. However, to the extent that costs were incurred by the applicant in bringing this application, putting the relevant circumstances before the court and attempting to identify, locate or communicate with the registered unit proprietors at the date of resumption, then it should have its costs either from the first respondent or from the fund, depending into which category those costs fall.
36 On that basis I consider that orders for costs should be made to the following effect:
(a) With respect to the costs of the claim for compensation, up to the date of payment into court of the moneys the subject of the application, those costs are reserved and shall form part of the costs of the claim for compensation and not part of the costs of these proceedings.
(b) With respect to the costs of tracing the owners, and the costs of distributing the moneys to them or to any of their assignees as ordered, any such costs incurred by the applicant or by the second respondents (whether past, present or future costs) shall be paid by the first respondent.
(c) With respect to the costs of the application incurred by the second respondents, and those costs of the applicant excluding the applicant's claim to be solely entitled to the compensation moneys, other than those identified in subpar (b) above, such costs are to be met out of the moneys paid into court and any interest accrued or accruing thereon.
(d) With respect to the two categories of costs described in subpars (b) and (c), the amount of such costs shall be taxed in accordance with the Supreme Court Scale of Costs as may be varied in accordance with subpar (e) below, if not agreed among those parties who are either seeking to be paid or who are being required to pay, the respective costs. If agreement on these costs is not reached within
six weeks of the date of this order, any party may apply for the taxation of any such claim for costs or apply to the court for further orders in relation thereto.
(e) In relation to any claim for costs, to which item 23 of the applicable cost scale applies, the taxing officer may tax and allow costs without regard to the limits imposed by that item and shall allow reasonable costs of the work necessarily done within the scope of item 23.
I also consider that each of the parties should have liberty to apply in relation to all matters arising from attempts to locate the persons entitled to distribution, the future control of moneys due to registered proprietors of units at the date of resumption who cannot be identified or located, and in relation to other matters relating to the distribution of the compensation moneys.
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