The Owners Strata Plan 432 v Seddon

[2015] NSWLEC 69

Land and Environment Court

New South Wales

Medium Neutral Citation:

The Owners Strata Plan 432 v Seddon [2015] NSWLEC 69

Hearing dates:

20, 21, 22, 23, and 27 May 2014; written submissions 4, 6, and 10 June, 2014

Date of orders:

01 May 2015

Decision date:

01 May 2015

Jurisdiction:

Class 4

Before:

Sheahan J

Decision:

(1) The Court declares
(i) that the first and second respondents are carrying out or threatening to carry out works at 15 Crescent Street, Fairlight, being Lot 15 SP 432, in breach of the Environmental Planning and Assessment Act 1979; and
(ii) that Complying Development Certificate No CD56/10 issued by Manly Council on the 27th October 2010 to the first and second respondents is null and void and of no effect.
(2) The Court orders that the first and second respondents, by themselves, their employees, agents and contractors be restrained from carrying out any works in the northern part of Lot 15 Strata Plan 432 occupied by laundry and toilet facilities and/or in any common property associated with such facilities.
(3) Costs are reserved.
(4) All exhibits are returned.

Catchwords:

DEVELOPMENT CONSENT: deeming of a development consent from a building approval granted in 1962 – residential flat building with common laundry/toilet facilities – whether the owners of Lot 15 are entitled to a complying development certificate approving the removal of the common facilities and/or entitled to exclude other lot owners from using those facilities – whether the complying development certificate authorising those works is valid – failure to obtain “owner’s consent” from owners’ corporation – failure of Council to inspect before approval.

REAL PROPERTY: common facilities not depicted on registered strata plan – space occupied by the common facilities is shown as part of “Lot 15” – rectification.

RES JUDICATA: earlier proceedings brought by applicant in CTTT determined that the common facilities were located “wholly on Lot 15” – whether common property impacted by development – is applicant now estopped from asserting that “owner’s consent” was required in respect of complying development certificate authorising the removal of the facilities – whether decision of “Adjudicator” under the Strata Scheme Management Act 1996 can give rise to estoppel.

Legislation Cited:

Building and Construction Industry (Security of Payment) Act 1999
Conveyancing (Strata Titles) Act 1961
County of Cumberland Planning Scheme Ordinance
Environmental Planning and Assessment Act 1979
Environmental Planning and Assessment Regulation 2000
Environmental Planning and Assessment (Savings and Transitional) Regulation 1998
Interpretation Act 1987
Local Government Act 1919
Local Government Act 1993
Local Government (Amendment) Act 1951
Manly Local Environmental Plan 1988
Miscellaneous Act (Planning) Repeal and Amendment Act 1979
Real Property Act 1900
Strata Act 1961
Strata Schemes (Freehold Development) Act 1973
Strata Schemes Management Act 1996
Uniform Civil Procedure Rules 2005

Cases Cited:

Auburn Council v Nehme [1999] NSWCA 383; 106 LGERA 19
Baiada v Waste Recycling and Processing Service of NSW [1999] NSWCA 139; 130 LGERA 52
Burgechard v Holroyd Municipal Council [1984] 2 NSWLR 164; 53 LGRA 346
Burwood Council v Ralan Burwood Pty Ltd [2013] NSWLEC 173
Burwood Council v Ralan Burwood Pty Ltd (No 3) [2014] NSWCA 404; 206 LGERA 40
Caltex Australia Petroleum Pty Ltd v Manly Council [2007] NSWLEC 105; 155 LGERA 255
City of Canada Bay Council v F&D Bonaccorso Pty Ltd [2007] NSWCA 351; 156 LGERA 294
Connor v Blacktown District Hospital [1971] 1 NSWLR 713
Drummoyne Municipal Council v Lebnan [1974] HCA
Dualcorp Pty Ltd v Remo Constructions Pty Ltd [2009] NSWCA 69; 74 NSWLR 190
Ex parte Abraham Malouf; Re Gee (1943) 43 SR (NSW) 195
Fatsel Pty Ltd v ACR Trading Pty Ltd (1984) 54 LGRA 291
Gold and Copper Resources Pty Ltd v Newcrest Mining Limited [2014] NSWLEC 148
Harris v Hawkesbury Shire Council (1989) 68 LGRA 183
Hill End Gold Ltd v First Tiffany Resource Corporation [2010] NSWSC 375
Hillpalm Pty Ltd v Heaven’s Door Pty Ltd [2004] HCA 59; 220 CLR 472
Jones v Dunkel [1959] HCA 8; 101 CLR 298
Koompahtoo Local Aboriginal Land Council v KLALC Property and Investment Pty Ltd [2008] NSWCA 6
Kuligowski v Metrobus [2004] HCA 34; 220 CLR 363
Lawrom Nominees Pty Ltd v Kingsmede Pty Ltd [2000] NSWSC 1048
Le v Williams [2004] NSWSC 645
LDJ Investments Pty Ltd v Howard (1981) Strata Title Law and Practice, 30-035
Owners Strata Plan No 50411 v Cameron North Sydney Investments Pty Ltd [2003] NSWCA 5
Papua New Guinea v Daera Guba [1973] HCA 59; 130 CLR 353
Pascoe v Council of City of Wagga Wagga [1995] NSWCA 360
Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; 147 CLR 589
Quarry Products (Newcastle) Pty Ltd v Roads and Maritime Services (No 3) [2012] NSWLEC 57
Ramsay v Pigram [1968] HCA 35; 118 CLR 271
Rippon v Chilcotin Pty Ltd [2001] NSWCA 142; 53 NSWLR 198
Sahade v Owners Corporation SP 62022 [2013] NSWSC 1791
Sahab Holdings Pty Ltd v Registrar-General [2011] NSWCA 395
The Owners – Strata Plan No 37762 v Pham [2006] NSWSC 1287

Texts Cited:

J D Heydon, “Cross on Evidence” (7th ed, Butterworths, 2004)
Peter Butt, “Registrar’s power to correct errors in the register – A new beginning” ((2014) 88 ALJ 452)
K R Handley, “Res Judicata: General Principles and Recent Developments” (18 Australian Bar Review 214)
AF Rath, PJ Grimes, and JE Moore, “Strata Titles: A handbook comprising annotations and practice notes on the Conveyancing (Strata Titles) Act 1961, with regulations and forms” (Law Book Co of Australia, 1962)
Murray Wilcox, “The Law of Land Development in NSW” (Law Book Co of Australia, 1967)
Stephen Odgers, “Uniform Evidence Law” (10th ed, Thomson Reuters)

Category:

Principal judgment

Parties:

The Owners of Strata Plan 432 (Applicant)
James Donald Seddon (1st Respondent)
Vanessa Jane Larsen (2nd Respondent)
Manly Council (3rd Respondent)

Representation:

Counsel:
Ms L Byrne, barrister (Applicant)
Mr S Docker, barrister (1st and 2nd Respondents)
Mr M Seymour, barrister (3rd Respondent)

Solicitors:
Turnbull Bowles Lawyers (Applicant)
Surry Partners (1st and 2nd Respondents)
General Counsel, Manly Council (3rd Respondent)

File Number(s):

40963 of 2013

Judgment

A: Introduction

In Brief

1. These Class 4 proceedings are brought by the Owners Corporation of Strata Plan (“SP”) 432, which covers a residential flat building (“RFB”), known as “Pelican Court”, and located at 15 Crescent Street, Fairlight, in Manly Council’s area.

2. Pelican Court was developed during 1963, following the grant by Manly Council of (1) a “planning consent” (“PC”60/1954), early in June 1960, for 12 units, and (2) a “building approval” (“BA”524/62), on 20 November 1962, for 9.

3. The present proceedings concern the “proper and lawful use of Unit 15” (i.e. “Lot 15” in the SP registered on 6 August 1963, and ratified by the Owners Corporation on 22 August 1963), part of which space has apparently been used ever since the building was completed, in 1963, as a laundry, “as if it were common property”.

4. On or about 9 April 2009, pursuant to contracts exchanged on 5 March 2009, the first and second respondents, Mr Seddon and Ms Larsen acquired two lots in SP 432 – one of nine upstairs residential units (Lot 7), and one of six ground floor garage units (Lot 15).

5. Lot 15 is frequently, but wrongly, referred to as part of Lot 7, but it is clearly a separate lot, associated with, and providing parking and storage space for, Unit 7. These proceedings concern the desire of the present owners of both units to have exclusive possession and use of the whole of Lot 15.

6. SP 432, as registered, does not show the laundry space at its northern end, but the plans marked by Council as “approved” predate the registration of SP 432, and show the facilities in that location.

7. There is no firm evidence before the Court as to how such an “error” occurred, only inferences. However, the Court now is asked to find a solution to the resulting dilemma, and counsel proved unable to take the Court to any authority clearly on-point.

8. The Owners Corporation argues that the only inference available is that, as the "common" laundry/toilet, shown in the plans for Lot 15, was in existence, and was inspected by the Council at the time of the issuing of the Council’s compliance certificate on 16 July 1963 ([143] below), it was simply overlooked.

9. It is claimed that, by mistake, Council failed to require/instruct the surveyor to redraw the boundary on the SP to follow the line on the Council-approved plans, as to where the laundry and toilet were located, and then approved the SP of subdivision, clearing the way for its registration.

10. Counsel suggested during the hearing (e.g. Tpp24 and 254) that the Corporation would need (a) a correction of the registered SP (see [46] and [454] – [455] below), or (b) approval of a subdivision, or (c) to reconfigure, or purchase part of all of, Lot 15, or (d) to construct a new laundry facility elsewhere on the subject land, none of which solutions can really be achieved by these proceedings. All three respondents appear to agree (e.g. Tp27) that this Court should not be used to obtain factual findings, simply to support a claim to relief enforceable elsewhere.

11. Seddon and Larsen were the original respondents to the Corporation’s Class 4 proceedings, but Council was joined as the third respondent, at a fairly early stage. For simplicity, I will refer to the third respondent throughout this judgment as “the Council”, and to the first and second respondents, who are life partners and jointly involved in all relevant events and these proceedings, as “the respondents”.

12. All parties were represented by counsel – the applicant Corporation by Ms Louise Byrne, the respondents by Mr Sean Docker, and the Council by Mr Mark Seymour.

13. The hearing was conducted over five days between and including 20 and 27 May 2014, during which the Corporation “shifted its ground” somewhat. As a result, leave was granted, on 27 May (Tpp312 – 313), to all parties, to make additional submissions in writing, and all three counsel did so.

14. Accordingly, there are before the Court ten submission documents, four from the Corporation (“opening” 14 May, on “ground 3”, 22 May, on “estoppel”, 27 May, and “in reply”, 4 June), three from the Council (“opening” 15 May, “speaking notes”, 23 May, and “final in reply”, 6 June), and three from the respondents (“opening” 19 May, “speaking notes”, 22 May, and “in reply”, 10 June).

Pelican Court

15. The owners of six of the nine residential units in Pelican Court, as developed, each own also one of the six garage units, and each of the other three residential owners has exclusive use of an allocated on-site parking space (by virtue of a By-law – in Exhibit A1, tab A, fol 85). The distinction between garage lots and allocated parking spaces on surrounding land is canvassed in Rath’s seminal textbook on the Strata Titles System (AF Rath, PJ Grimes, and JE Moore, “Strata Titles: A handbook comprising annotations and practice notes on the Conveyancing (Strata Titles) Act 1961, with regulations and forms”, Law Book Co of Australia, 1962 – see pp15 – 16).

16. The respondents do not presently reside in Pelican Court – Lot 7 is leased out – but they use Lot 15 for general storage, not parking. A former owner ran a lawn-mowing business from that residual garage area, but “no owner of Lot 15 has ever had exclusive possession of the whole of what’s shown on the plan as Lot 15” (Tp23, LL37 – 38), and the respondents argue that the space available for use as a garage is inadequate for that purpose.

17. For many years, the owners of other residential units in the nine-unit complex had/have used a shared/communal laundry and toilet which were incorporated in what became Lot 15, in the absence of such facilities being located somewhere outside the current configuration of the building, on the common property.

18. Those facilities were built in their present location in 1963 (see photographs in Exhibit A4) – and it is now common ground that they were completed by the time the SP was registered on 6 August 1963, and have been regarded as common facilities ever since.

19. Larsen deposed (25 February 2014, par 36) that Lot 15 is located “on [the] lowest level of the building at the back and end of the building”.

Lot 15 and the Respondents

20. The respondents purchased Lots 7 and 15 under a contract of sale (Exhibit A6), which included “Additional Special Condition 15” in the following terms:

The Purchaser(s) acknowledge that the property comprises, of a common laundry and toilet which is used by the other unit holders and located in the vendors garage. The works were completed over 20 years ago by the previous owner. The vendors receive no payment or benefit from this arrangement. The Vendor(s) are unaware whether the same has been approved by the local Council. ...

21. The “title documents” in the contract (see Exhibit A6) note the existence of a covenant (no. J609505), and include:

1. a copy of SP 432 (registered 6 August 1963), on which Lot 15 is depicted as 233sq ft of garage space; and

2. a copy of the covenant (dated 20 March 1964, and registered on the title on 1 April 1964), which “may be released varied or modified only with the consent of the council ...”. The covenant binds the owner for the time being of Lot 15 to (1) permit the registered proprietors of Lots 1 to 9 to use or “enjoy” Lot 15, and (2) use Lot 15 only for “the storage or parking of a boat or motor vehicle”.

22. Also included (in Exhibit A6) is a sketch plan which describes Lot 15 as the “Unit 7 garage”, and depicts the internal spaces occupied by the laundry and toilet “cubicles” (1.83m x approx 2.4m, and 1.83m x 0.86m, respectively). Other evidence indicates that Lot 15’s internal walls are comprised of 1.2m of brick, topped with painted fibro or similar sheeting, and that the slab floor of the laundry/toilet area is 5cm lower than the rest of the Unit 15 slab (Tp77).

23. The respondents concede that they purchased on notice of the laundry, but deny that they were on notice of any error in the SP.

24. They complain, however, that, with a substantial part of the area of Lot 15 being taken up with communal laundry/toilet facilities, the residual space available to them for parking is inadequate for other than a “small” vehicle. As currently configured internally, Unit 15 provides parking space only 13.5ft long, instead of the normally stipulated 18ft, and the respondents want the whole of Lot 15 to be returned to garage space, to be available for adequate private parking.

25. The respondents say (Tp27) that the Corporation’s obligation to provide laundry etc facilities cannot be discharged by its committing a trespass on their private property in Lot 15, at the same time as it enforces a restrictive covenant requiring the respondents to use Lot 15 as a garage. (The Corporation (Reply sub 16) rejects the term “trespass”, arguing that any “intrusion” on Lot 15 is at least “authorised”.)

26. They also argue (Tpp27 and 234) that, by reason of earlier proceedings elsewhere, from which no appeal was brought, the Corporation is estopped from asserting an interest in Lot 15, enforceable against the respondents.

27. Among the contract documents (in Exhibit A6) are a letter, and a sketch plan, both dated 8 September 2006, from the respondents’ predecessors in title (the Pauls) to John Jocumsen (the strata manager’s representative), in the following terms:

I refer to your letter dated 31 August 2006 requesting approval for refurbishment activities and continued use of the laundry at 15 Crescent Street Fairlight.

As you are aware the laundry and toilet are currently part of the unit entitlement of Lot 7 and have been used by the other occupiers of the building on a casual arrangement.

We can advise you that this arrangement can continue for the foreseeable future however should we require access to the full garage area we will endeavour to give the owners corporation at least 3 months notice, while we remain owners of the lot.

It is appreciated that the Owners Corporation are willing to refurbish the laundry and toilet and we have no objection to this activity taking place.

28. The respondents have now incorporated into Lot 7 its own laundry facilities (see By-law in Exhibit A9), and they have also obtained from the Council a complying development certificate (“CDC” – no 56/10) in respect of their proposed removal of the internal, non-structural walls that partition the laundry and toilet spaces within Unit 15 (works described, erroneously, in CDC 56/10, applied for on 5 October 2010 and granted 27 October 2010, as the “non-structural wall within Unit 7”).

29. They also notified the Owners Corporation that they intended to remove the tubs, disconnect the services in the laundry and toilet, seal up the floor wastes, and close the present external entrances to those facilities, which are clearly depicted in photographs (Exhibit A4). (The coin-operated washing machine is/was rented by the Owners Corporation from a business known as “Mini Mat Laundry Equipment”.)

The structure of this judgment

30. Having now briefly introduced the basics of what has proven to be an extremely complex case, this judgment will deal with the following topics, before I set out my reasoning and orders (from [287]):

B:   These and some earlier relevant proceedings ([32])

C:   The “pleading” documents as they evolved ([48])

D:    The evidence, both sworn and documentary ([60])

E:    Various other statutory provisions raised in argument ([211])

(These are dealt with in groups: firstly, the Local Government and Planning legislation ([212]); secondly, the Evidence and Interpretation legislation ([254]); and thirdly, the Real Property and Strata Titles legislation ([263]).)

31. I will then set out my reasoning and orders:

F:   The grounds of challenge, the issues which finally emerged, and my consideration of them ([287])

G:   Other questions and conclusion ([435]).

B: Earlier and Present Proceedings

32. On 20 September 2010, the Owners Corporation sought, from the Strata Title division of the then Consumer Trader Tenancy Tribunal (“CTTT” – in proceedings No. SCS 10/43413), orders against the respondents (Larsen 25 February 2014 par 27, and [26] above).

33. The catalyst for those CTTT proceedings was the attempted enforcement by the respondents of their asserted property rights over Lot 15, by closure of the rear access to it.

34. The Corporation’s application was dismissed by the “Adjudicator” (see [167] below), on 17 January 2011, and negotiations between the disputing parties then continued during 2011 and 2012 (Larsen 25 February 2014 pars 31 and 32), and into 2013.

35. A March 2013 proposal to subdivide Lot 15, in consideration of an ex-gratia payment to the respondents, was not supported by Council (par 33, and Tp65 – 66), which would prefer the option involving the location of a new laundry/toilet elsewhere on site (Tp69). (Note here options in [10] above.)

36. The Owners Corporation, and unit owners other than the respondents, prefer the status quo, and do not want the facilities relocated (Tpp70 – 71), but relocation options were explored, and it was thought that, apart from questions of cost, the position of the sewerage line and stormwater drainage might impede such a project (Tpp87 – 89).

37. The Owners Corporation has continued to seek a resolution of the problem, outside the present litigation (Tp94, LL1 – 11).

38. However, on 3 December 2013, the respondents gave notice of their intention to commence the CDC works, and, in response to that notice, the Owners Corporation, on 10 December 2013, commenced these present proceedings, but against only the respondents.

39. The Corporation obtained from Biscoe J an interlocutory injunction, which has subsequently been continued by consent, restraining the respondents from “hindering or interfering with or preventing the use of the common laundry and toilet facilities until further order”.

32. On 11 December 2013, the respondents’ proposed works were granted a construction certificate (“CC”).

33. On 18 December 2013, the Council was joined as third respondent to these proceedings, when the Owners Corporation decided to seek, by way of further relief, a declaration as to the invalidity of the CDC.

34. An amended summons was filed on 20 December 2013, and the Council appears in the proceedings only to defend its grant of the CDC, and refute the argument that BA524/62 “became” a development consent (“DC”).

35. The Owners Corporation argues that the respondents’ proposed work involves common property, including “fixtures and fittings” (taps, tubs, toilet, lights etc), and/or personal property vested in the Owners Corporation, and points to the Strata Schemes Management Act 1996 (“the 1996 Strata Act”).

36. The Corporation further argues that the subject site and the apartment building enjoy the benefit of a “deemed [DC] under the Environmental Planning and Assessment Act 1979 [(“EPA Act”)]”, in accordance with BA524/62, which included a condition (no 7) in the following terms (Exhibit A1 tab A, fol 9/106):

Laundry facilities being provided in accordance with the provisions of Ordinance 71, and the plans being amended accordingly; [i.e. as manually added to the plan at fol (iii)/106]

45. All three respondents deny that BA524/62 is a “deemed [DC]”, and/or that it includes conditions which have continuing effect, and/or that the respondents’ CDC can depend upon it. They say (Tp105, LL21 – 22) that BA524/62 “is and only is a building approval”, under the Local Government Act1919 (“the 1919 LGA”).

46. The respondents complain that the Owners Corporation is really seeking from the Court a series of findings that may provide a basis for seeking a remedy elsewhere – for example, the correction of the apparent surveying error in SP 432, as registered – and they reject that course as “not an appropriate process” (Tp27, L35). They say that the relevant tribunal has already rejected the allegation of error, so creating an issue estoppel against the applicant (LL32 – 42), and they also deny that they purchased Lots 7 and 15, “on notice” of any such error (Tp29, LL43 – 47).

47. Much of the history of the relevant planning and development control regimes, of the Pelican Court development itself, and of the various approvals regarding it, predates the enactment of the EPA Act in 1979.

C: The Pleadings

48. The original pleading documents filed in the matter were soon overtaken, with the summons being first amended, on joinder of the Council, within ten days of filing (see [41] above).

49. At the beginning of the hearing, on 20 May 2014, after some argument, the Court granted the Owners Corporation leave to make three main further amendments, and so to file a “further amended summons” (“FAS”).

50. Firstly, it deleted from the summons its reliance upon PC 60/1594, continuing its reliance upon only BA524/62 to translate into a deemed DC. In her closing reply to the oral submissions of the three respondents, Ms Byrne, on behalf of the Owners Corporation, asserted that the 1960 consent had, in fact, lapsed in 1962, by virtue of cl 41(5) of the County of Cumberland Planning Scheme Ordinance (“CCPSO”), set out below at [192]. (Tp297, LL30 – 46).

51. All three respondents protested that the Court should not entertain that late assertion of lapsing. It should have been specifically pleaded, and the Owners Corporation should be confined to the case it had pleaded in its original summons: Uniform Civil Procedure Rules 2005 (“UCPR”) 14.14 and 59.4(c).

52. Secondly, the Owners Corporation added, to prayer 1, a fourth particular of breach of the EPA Act, namely, a failure by Council to carry out an inspection of the site prior to issuing the CDC.

53. Thirdly, the amendments made some adjustments to the form of restraining order sought in prayer 3.

54. For completeness, I now set out, in full, the Owners Corporation’s FAS (some emphasis added), filed pursuant to the Court’s leave to amend, on 20 May 2014:

1   A declaration that the first and second respondents are carrying out or threatening to carry out works at 15 Crescent Street, Fairlight, being Lot 15 and the common property to SP 432, in breach of [the EPA Act] 1979;

Particulars of breach

(i)   s76A(1)(b) & 122(b)(iii) – the works are in breach of deemed development consent comprised by planning consent and building approval No 524/62 granted by Manly Council in 1962;

(ii)   s84A(1)(b)(ii) & s122(b)(ii) – the works are in breach of Manly LEP 1988, clause 10A(2) and Schedule 9(g) (as in force at the relevant time);

(iii)   s84A(2)(b) & (3) and EPA Regulation 2000, Schedule 1, Pt 2, clause 3(e) – the Respondents failed to obtain the written consent of the Applicant [i.e. The Owners Corporation] to the application for approval for the works;

(iv)   s122(b)(i) & clause 129B EPA Regulation 2000 – the Third Respondent failed to carry out an inspection of the site of the development prior to issuing the CDC.

2   A declaration that the Complying Development Certificate No CD56/10("CDC") issued by Manly Council on the 27th October 2010 to the First and Second Respondents is null and void and of no effect;

Particulars

(i)   The First and Second Respondents purported to carry out the works referred to in prayer 1 above under the authority of the CDC;

(ii)   by reason of the matters set out in particulars at prayer 1(i) to (iv) the CDC was invalidly issued.

3   An order restraining the first and second respondents, by themselves, their employees, agents and contractors, from: (i) carrying out any works in the northern part of Lot 15 Strata Plan 432 occupied by laundry and toilet facilities belonging to the Owners Corporation and in relation to any common property therein situated; and (ii) preventing the use of the said laundry and toilet facilities by the lot owners, their tenants, agents and contractors; without the consent in writing of the Owners Corporation for Strata Plan No 432 for the residential flat building at 15 Crescent St Fairlight in the State of New South Wales.

4   Such further or other orders as the Court sees fit;

5   Costs.

55. The hearing before me was conducted on the basis of (1) Amended Points of Claim (“APOC”) filed on 21 May 2014; and (2) separate responsive (Amended) Points of Defence (“POD”), filed by the respondents and by the Council, in reply to the APOC, on 22 May 2014.

56. The applicant pleaded in its APOC (par 11):

The construction of the CDC is an issue for the court. It is either void for uncertainty because the work does not involve removal of a non-structural wall within Unit 7 as that area of the RFB would ordinarily be understood in common parlance as being Unit 7 located on the third floor of the building. In fact the work sought to be undertaken is to Lot 15 which is located on the ground floor. If the CDC is read with the plans and SEE referenced on its face it is clear the works approved relate only to that part of the RFB known as Lot 15 and include more than just the removal of a non-structural wall. In fact the works depicted on the plans and described in the SEE involve demolition of the laundry and toilet facilities, the removal of the wall dividing these facilities from the rest of Lot 15 and the sealing up of the entrance to them from the outside of the building. This is the work that the First and Second Respondent attempted to commence that gave rise to the urgent proceedings. In addition a change of use of that part of the RFB was to be achieved by the works, not just building work.

57. In reply, the Council pleaded, in its POD (par 3):

With respect to [11], the Third Respondent says that the CDC is certain on its face as to its effect , with any reference to Lot 7 being a typographical error causing no uncertainty, and further says that the CDC does not authorise a change in use by the removal of internal walls in a registered lot as the use remains residential.

58. The Council also pleaded delay (par 5):

The Applicant has excessively delayed commencing proceedings to challenge the CDC which was issued in October 2010 and not challenged until December 2013

59. The respondents pleaded in their comprehensive “Points of Defence to Amended Points of Claim” (again “POD” – pars 20(c) and (d)), that the defendant was estopped “from denying that the laundry and toilet facilities are not wholly within Lot 15 by reason of the finding in the CTTT Judgment to the opposite effect”, or “in the alternative…it is an abuse of process for the Applicant to contend that the laundry and toilet facilities are not wholly within Lot 15 by reason of the finding in the CTTT Judgment to the opposite effect and the Applicant’s failure to appeal the CTTT judgement” (pars 13(d), (e) and 20(c), (d)).

D: The Evidence

60. A two volume Court Book (Exhibits A1 and A2) contains a large number of allegedly relevant documents.

61. A third volume of documents, containing some of the Owners Corporation’s financial and other records (Exhibit A3) was verified by one of the affidavits of the Corporation’s Chairman, Roger Grevatt.

62. Council’s historical file (comprising “folders within folders” – Tp106, L7) was also placed in evidence (at Tp108, L10 – Exhibit C1).

63. Other affidavits relied upon in the substantive proceedings were provided by (1) the second respondent, Ms Larsen, (2) the Owners Corporation’s solicitor, Richard Phillipps, and (3) a former Council officer, Ellise Mangion. (On the contested application to further amend the summons, a further affidavit was read from Mr Phillipps, as well as one from Council’s in-house solicitor, Blake Dyer.)

64. Deponents Larsen, Grevatt, Phillipps and Mangion were all called for cross-examination during the hearing of the substantive proceedings.

65. As is to be expected, the documentary evidence before the Court overlapped somewhat, and involved a level of duplication, but it is also incomplete, as a lapse of more than 50 years – since Pelican Court was built, and the SP was registered – understandably has meant the loss of some older documents and records which would have assisted the Court. These facts have given rise to uncertainty and/or confusion regarding some dates.

66. I will come to the documents in due course ([102] below), but I turn, first, to summarize the affidavit and oral evidence.

The sworn evidence

67. Grevatt is a business analyst, and has been an occupier of the block since 1997. He became the owner of Lots 6 and 10 in March 2007, and was elected Chairman of the Owners Corporation at its annual general meeting (“AGM”) in 2007 (Tp75).

68. Grevatt provided (Tpp63 – 64) some useful particulars of the subject site – including the slope of the land, the actual location of Lot 15, and the relevant relative location of the uncovered parking spaces provided on site.

69. He complains that the Corporation was not asked for its approval for the CDC works in 2010, and did not know of Council’s grant of the CDC until after these proceedings were commenced. He compiled the various financial documents in Exhibit A3, to indicate the Corporation’s responsibility over the years, for maintenance, repairs, upgrading and servicing of the “laundry and common property toilet” within Lot 15.

70. He deposed to the longstanding practice of unit occupants using the facilities in Lot 15, and to the various alterations made to them by the Owners Corporation over the years (at least since Mr Sait moved in, during 1992).

71. He also deposed to various dealings he had with Ms Larsen, both before and since completion of the respondents’ purchase of Lots 7 and 15, and regarding the respondents’ desire to restrict access to Lot 15, especially since they renovated Lot 7.

72. He also referred to some attempts to find a resolution to the dispute between the respondents and the Owners Corporation, sometimes involving also the Council. He is aware that former owners of Lot 15 used the garage component of it, for a time, to house a family lawn mowing business.

73. During his oral evidence, Grevatt conceded that, although fairly active in Owners Corporation affairs, he and it rely heavily on their strata manager (Tpp78 – 81). He could not recall precisely when he became aware of the CDC (Tpp81 – 87).

74. Much of solicitor Phillipps’s evidence has informed the above summary of events, although he came into the matter only late in 2013 (Tpp96 – 97), and is not sure how long before the preparation of Points of Claim in January 2014 he became aware of the CDC (Tpp98 – 100).

75. He deposed to some 2013 settlement negotiations, including a proposition put to Council that Lot 15 be subdivided ([10] above). He was advised by Council that such a proposal “would not be recommended for approval”, and has since turned his attention to trying to correct “an error in the Register”, under s 12(1)(d) of the Real Property Act 1900: see [264] below, and Sahade v Owners Corporation SP 62022 (“Sahade”) [2013] NSWSC 1791.

76. He also estimated the Owners Corporation’s costs, as at Day 1 of the hearing, at possibly $50,000. (See Tpp97 – 98).

77. The respondent Larsen is an interior designer by profession, part-owner of Units 7 and 15, and a sometime “property developer” (Tp125, LL20 – 21). She affirmed two affidavits, the first dated 25 February 2014, and the second dated 20 May 2014.

78. Larsen and Seddon are the registered proprietors, as joint tenants, of each of Lots 7 and 15, having settled their purchase of both on about 9 April 2009. The purchase price was $337,500 (Tp140, LL24 – 28).

79. She deposes (25 February, par 5):

I was aware of the existence of the laundry and toilet facilities in Lot 15 and that they were used by other owners and tenants of Strata Plan 432 on a casual arrangement when we bought Lots 7 and 15 but I also knew that the whole of Lot 15 was being sold to us and was valued as such by our lender.

80. She was and is aware that their lots are subject also to the terms of the restrictive covenant.

81. She also deposes to a detailed knowledge of many of the letters and other documents in Council’s files, and other documents obtained by the respondents’ solicitors from Land and Property Information NSW.

82. She takes issue with several assertions made by Grevatt in his affidavit of 24 January 2014, and deposes (par 14) to a representative of the vendors of Lots 7 and 15 having, on 5 March 2009 emailed Grevatt and the Strata Manager that:

as a courtesy I can advise today that we have reached unconditional exchange of contracts for sale of our property at 7/15 Crescent Street Fairlight with settlement open ending as we need to provide vacant possession could you please confirm that the washing machines will be removed from unit 7 garage laundry as soon as possible and before 5 April 2009.

83. On 11 March 2009, Larsen emailed to Grevatt (par 15) a request that the washing machine be removed, and (par 16) the strata manager instructed the lessor of the machine “to remove the laundry equipment before 5 April 2009”. On 30 March 2009, a general meeting of the Owners Corporation resolved that the washing machine “be reinstated”, and that no common laundry and toilet would be built on common property to replace the facilities in Lot 15 (par 21).

84. From early April 2009 until about the end of August 2010, the respondents engaged in negotiations about the facilities located in Lot 15, but, on 31 August 2010, the Corporation rejected “all claims of ownership” by the respondents “over the area occupied by the laundry and toilet” (pars 24 and 25).

85. The respondents then decided “to assert [their] property rights over Lot 15, “locked the laundry door, and organized for the lessor to remove its washing machine, but some other residents “removed the laundry door with a chainsaw or the like”, in Larsen’s presence. Police were called, and the washing machine was “put back against the respondents’ wishes” (par 26).

86. Larsen opines that the proposed works to Lot 15 will have no impact on shared electricity, water supply, and drainage services to the rest of the block, and are confined to the internal space of Lot 15 (par 36).

87. The respondents’ strata levies on Lot 15 are based on the same unit entitlement as the other garage lots (10 to 14 – par 40), but, if the laundry and toilet are not removed, the balance of Lot 15 is, in her opinion, too small for use as a garage (par 39).

88. Larsen’s second affidavit is concerned mainly with the question of the Council’s making a physical site inspection of Lot 15, prior to the grant of the CDC. She deposes to receiving a call – during the week prior to one on 19 October 2010 advising of that approval – from “somebody from” Council wanting access to Lot 15.

89. In her oral evidence, Larsen assisted the Court to better understand how the laundry/toilet facilities were accessed and operated before the present dispute arose. She also confirmed that the access ramp was “rebuilt” (or, perhaps, properly established) in 2009, not long after the sale of Units 7 and 15 to herself and her partner (Tp123, LL1 – 11). That work generated an email exchange (including photographs), between herself and Council officer Brett Maina (Exhibit A8), due to her concern about safety for “patrons going into our title” (LL30 – 42).

90. She objected to the Owners Corporation “spending the money when we were going to be removing the laundry and toilet”, but she “wasn’t getting anywhere” (Tp124, LL35 – 49).

91. She was also tested on:

1. the feasibility of establishing a laundry elsewhere on the property (Tp126),

2. making changes to the SEE she originally put forward regarding her works on/in Unit 15 (Tpp127 – 133), but not including in it any mention of the fact that the laundry and toilet were being used by “anyone else in the building” (Tpp137 – 140),

3. the proposed permanent closure of the external access to the rear of Unit 15 (Tp129),

4. the renovations done to Unit 7, involving a change in the by-laws which was initiated by the strata manager (Tpp133 – 137, Exhibit A1, tab B, fol 731, and Exhibit A9), and

5. the alleged Council telephone call she “clearly” remembers, regarding access to inspect her units in regard to her CDC application (Tpp141 – 142).

92. Grevatt put on a lengthy (fifth) affidavit in response to Larsen’s primary affidavit, but I have already summarized above ([67] – [73]) the principal points made in all five of his affidavits, and in his oral evidence.

93. Ellise Mangion was a town planner at Manly Council from October 2009 to March 2014.

94. She was assigned to assess the CDC application, and authored the “Delegated Authority Report” embodying its approval (Exhibit A1, tab E, fols 35 – 36).

95. She deposes to carrying out such assessments at a rate of 10 per month, but says (par 4) that “nothing ... stands out ... as being significant” about this particular project or its assessment.

96. She cannot recall carrying out a physical inspection of the subject site, or preparing a report on any such inspection, or taking and filing any photographs taken during any such inspection, but she told the Court (par 6) “that it is unlikely that [she] did not undertake a site inspection”.

97. She cannot (par 8) see “any reason why [she] would have varied [her] practice or that of Manly Council” in this case. It “was and remains [her] standard practice” (par 6), ever since she entered her profession in September 2008. As Mr Docker put it (Tp255, L49), it was her “practice and habit”.

98. In Mangion’s experience, all town planners in her time at Manly Council adopted that “standard practice” (par 7), and understood and followed Council’s records management policy (Tp150). (That policy, as it presently stands, is before the Court as Exhibit A10, and that which was in place as at October 2010 is Exhibit A11).

99. However, she deposes, “it appears to have been an administrative oversight that the record of inspection was not placed into the file ...” (par 8, and Exhibit A7).

100. Mangion was cross-examined, in particular, as to whether she merely relied on a “desk-top analysis” of Council documents, rather than making an actual physical inspection of the site. She explained (Tp153, LL12 – 25) that Council administrative staff always printed out a range of planning information, and put it on file, as soon as a DA or an application for a CDC was received and allocated for assessment (see Exhibit A1, tab E, fols 37 – 43).

92. The following exchange occurred in this regard, between Mangion and Ms Byrne (Tp153, L38 – p154, L15)

Q. ... So it’s entirely possible in a busy period for you to process a CDC, for example, without going to the site, isn’t it?

A. No.

Q. Well, I suggest to you that, in this instance, you looked at this information and you processed this CDC based on the desktop review and the file review of the land and what was involved?

A. That’s not my standard practice.

...

Q. But I’m suggesting to you that, in this instance, that’s what you did--

A. I don’t remember.

Q. --because you were very busy?

A. I do not remember.

Q. You don’t remember?

A. I do not have any recollection that I--

Q. That you didn’t do it that way?

A. I, that I didn’t, or did or did not do a site visit or I did in the way that you are stating.

The documentary evidence

102. I turn, now to the very extensive documentary evidence.

Court Book Volume 1

103. In Volume 1 of the Court Book (Exhibit A1), documents are grouped by source.

104. Those included under Tab A are described as “historical Manly Council Documents – 1960s”, and bear dates between 1962 and 15 April 1964.

105. Under Tab B are relevant Land Titles documents; under Tab C, correspondence and the CTTT judgment; under Tab D, photographs; under Tab E, further Manly Council documents, namely those bearing upon the CDC.

106. Included under Tab F are copies of the three primary Richard Phillipps affidavits, the four primary Roger Grevatt affidavits, and the first Larsen affidavit.

107. Volume 2 of the Court Book (Exhibit A2), to which I will return ([181] below), contains various relevant planning and building instruments.

Documents tendered, supplementing Volume 1

108. The Volume 1 materials were supplemented by other documentary evidence, which, for convenience, will be noted at this point.

109. At the beginning of the second hearing day, during the tendering by Ms Byrne of various documents, the Council (in circumstances described at Tpp106 – 108) elected to tender for the use of the Court the original Council file(s) from the 1960s (Exhibit C1). That tender proved to be of great assistance to the Court in dealing with this matter.

110. Two other 1960 letters from the town clerk to solicitor C J Berry, were separately tendered during the hearing – one dated 16 June 1960 (Exhibit R1), and the other dated 21 December 1960 (Exhibit A5). (Carbon copies of both of these letters are also to be found in Exhibit C1.)

111. The original application for PC was made by letter dated 9 May 1960 from Berry to the Town Clerk, enclosing a sketch plan (both in Exhibit C1).

112. On 12 May 1960 (?), the CCC wrote to Council (also in Exhibit C1) saying that it was “not desired to make any representations” about the proposal.

113. A letter from the Council to Berry dated 1 June 1960 (with “25 May” crossed out – also in Exhibit C1) advised that location of the site within a “Foreshores Scenic Protection Area” required Council to consult with the Cumberland County Council (“CCC”) before making its decision.

114. In a letter dated 8 June 1960 (Exhibit C1 – blue tag 2), Council advised that, as the CCC had no objection to the proposal, Manly Council had approved the granting of consent for 12 single-bedroom flats (c.f. 9), over three storeys, to be built at 15 Crescent St, subject to the submission of satisfactory plans and specifications, which must conform to the requirements of the 1919 LGA and the ordinances made thereunder. Detailed plans and specifications were invited.

115. The letter of 16 June 1960 (Exhibit R1) referred to earlier correspondence regarding PC 60/1594, in particular the above-described letter dated 8 June 1960, and set out the conditions attaching to that 8 June approval:

•   Condition 4 relevantly required that vehicle parking spaces outside of garages were to be not less that 18ft by 8ft, paved and drained, and specifically reserved for the parking.

•   Condition 7 required that a registered surveyor’s certificate be submitted to Council immediately upon completion of the foundations for the building.

•   Condition 9 required the provision of ‘an additional water closet ... in this building, ... to be accessible from the yard area’, and

•   Condition 10 required that the dimensions for the allotment as indicated on the sketch plan submitted be confirmed by the applicant (for consent).

116. The last paragraph of the letter says:

Your attention is also drawn to the need to obtain building approval for this proposal prior to any work being commenced and in this regard you are invited to submit to Council duplicate copies of detailed working drawings and specifications as a formal building application.

117. Sometime late in 1960, after 8 June 1960, and probably after 16 June 1960, Council adopted a code for “control of residential buildings in Foreshore areas”, with which code “any departure” from any project as earlier approved must comply.

118. Exhibit C1 includes (blue tag 1) the file copy of the minute of the Council’s Health and Building Committee meeting/decision on 1 November 1960. The proposal at that time was still for 12 single-bedroom flats, on 3 levels.

119. The Council’s letter of 21 December 1960 (Exhibit A5) replied to a handwritten letter from Mr Berry, dated 25 October (in Exhibit C1), seeking Council’s confirmation of the “draft permission already granted”, and referred to some subsequent discussions regarding the development. The letter of 21 December commenced with the following paragraph (emphasis added):

... I have to advise that as the area of land indicated in your original planning application dated 9th May, 1960, is not now available, the planning consent granted previously by Council is now null and void.

120. The letter went on to inform Mr Berry that it would be necessary for development on the site to conform with Council’s development control code. Building was restricted to a maximum of 4 storeys and 16 units, and Schedule 7 to the 1919 LGA stipulated the percentage of site which may be occupied. Attention was also directed to a then recent Council decision fixing minimum areas for various smaller units, and prohibiting external stairways and access balconies.

121. The letter concluded:

In view of the foregoing, you are invited to submit for Council’s consideration a completely new development application conforming with these requirements and other statutory regulations.

122. The first major piece of Strata Titles legislation – the Conveyancing (Strata Titles) Act1961 (“the 1961 Strata Act”) – received assent on 27 March 1961, and apparently commenced on 8 January 1962.

Other Tab A historical Council documents

123. The application for BA on 7 November 1962 is document 1 (fols 1 – 3/106) in Exhibit A1 tab A, but, before it in that section of the bundle, is a collection of plans numbered “(i)” to “(v)”.

124. Plan (iii) clearly indicates that, during the course of consideration of the building proposal, the intention to include a communal laundry and toilet in the car parking area provided within the unit block was altered by hand, so that those facilities would be included in what the Court now knows to be Unit 15, rather than Units 12 and/or 13. On plan (iii) each of the separate laundry and toilet is indicated to have its own doorway into the backyard, as well as a normal garage entry doorway from the driveway.

125. Plan (iv), which is endorsed “amendment approved”, and is dated 8 May 1963, shows those facilities as located in what is now known as Unit 15.

126. Plan (v) is in fact a barely legible photocopy of endorsements stamped on, or taped to, the back of a plan subsequently identified to the Court, very clearly in Exhibit C1, as the original of plan (iii). The date of approval of BA524/62 is stamped as “20 November 1962”, and the printed minutes taped to it are of the meeting stated to have been held by the Health and Building Committee on 13 November 1962.

127. By the time of the 7 November 1962 application, the number of units proposed for the site had dropped from 12 to 9 three-room units. The applicant was REX Building Co, and the fees were paid (fol 3) by the owner, Pelican Court Pty Ltd.

128. The 1962 Council minute makes clear that the consideration of the BA had regard to the provisions of the then draft planning scheme ordinance (“PSO”), restricting it to 4 storeys and 16 units. The document noted that “the area occupied by carparking ... exceeds the permissible by 19sq feet”. The Council minute refers to Council’s decision of 8 November 1960 (Exhibit C1 blue tag 1), “in respect to [PC]”, and refers also to the advising of changes in Council requirements on 21 December 1960, noting that “the building application now submitted indicates that this building is proposed having external open stairs and external access balconies”.

129. The recommendation to the Council was that the site be inspected by the committee, for closer consideration of the matters in those notations, and of the proposal for open access stairs and balconies, and a front elevation of completely faced brickwork...”. It then noted that, “apart from this, approval of the application is recommended subject to” 15 conditions, including condition 7, which provided:

laundry facilities being provided in accordance with the provisions of Ordinance 71, and the plans being amended accordingly.

(By contrast, the 1960 PC’s condition 7 – see [115] above – concerned survey requirements)

130. I turn now to note some of the other documents included under Tab A of Exhibit A1, following those plans, and the 1962 building application.

131. Folio 5 is some sort of checklist, on an assessment report dated 9 November 1962, which notes flats as permitted in the Residential B Zone, and proclaimed residential district 5. The draft ordinance required one off-street car space per unit. The precise areas of the project are noted at fol 6, and some “considerations on assessment” are noted at fol 7. The stamps and attachments noted above ([123] – [126]) are copied again, at fols 8 – 10(2).

132. At fols 11 and 12 is a copy of the formal advice, dated 22 November 1962, of BA granted to REX Building on 20 November 1962 (fol 10/106), and including, specifically, the new condition 7, regarding amendment of the plans to accommodate the laundry facilities.

133. The detailed specification (at fols 13 – 35) suggests that each of the 9 flats would contain only one bedroom, and that a separate laundry, WC and a 14 foot rotary hoist will be “provided externally”. External traffic areas were to be paved to provide parking for 9 cars, including 6 under the building. All pages of the specification are stamped “Municipality of Manly”. The original (bound) copy of that specification is also to be found in Exhibit C1, and bears (on the back of its page 23) the traditional stamp signifying its approval by Council, dated 20 November 1962 (blue tag 3).

134. Folio 25 of the specification noted the external doors to the laundry and WC, fol 28 the nature of floor waste grating for the laundry floor, and fols 29 and 30 the provision of laundry tubs etc. Among the electrical specifications at fol 32 is the following: (b) all lighting including fixing of fittings selected under P.C. items, to all stairs halls, public corridors and common areas “including Laundries”. In the lighting and power point section at fol 33 there is mention of “public area” outlets, including for the laundry. In the “P.C. items” at fol 35, the tubs and two coppers are noted.

135. On 12 February 1963 (fol 41), Council wrote to REX, following an inspection which indicated that the levels for the garage floors were not in accordance with the approved plan, and that the end walls of the garages were being bricked in. REX was asked to submit amended details to Council for those and other matters. REX was also reminded to provide the registered surveyor’s certificate required. A survey certificate, dated 7 February 1963, appears at fol 44.

136. The screening of the stairs remained an issue as at a further inspection on 26 March 1963 (fol 48), and amended plans were submitted, but did not satisfy Council (fol 52).

137. A strata subdivision plan was submitted to the town clerk on 1 May 1963 (fol 50), and Council responded to Hooker Finance on 14 May 1963 (fol 51), indicating that:

where there are compelling reasons for so doing, Council will approve a Strata Subdivision Plan that provides for separate titles to garages etc. if the owner enters into a restrictive covenant to the effect that the garages will not be used or enjoyed otherwise than by a proprietor, tenant or other person entitled for the time being to occupy any of the living units.

138. Hooker Finance was also requested to “reconsider the matter and decide whether the garages could be attached to specified living units or alternatively left in common property”.

139. Council is recorded (fol 59) as accepting, in the period from 21 to 28 May, 1963, a recommendation that the strata subdivision be approved subject to the applicants (for strata subdivision approval) entering into a suitable covenant.

140. On 28 May 1963, Arthur T George & Co responded (fol 58) to Council’s letter of 14 May 1963, indicating that Hooker Finance wished to proceed with the plan in its then form, but agreeing to the restrictive covenant being endorsed on title.

141. The town clerk advised George on 3 June 1963 (fol 61) that its solicitors (J.E.A. Florance and Florance) would be instructed to draft a suitable covenant, and, on 2 July 2013, it forwarded to the developer’s surveyor (fol 66) the original strata subdivision “plan duly endorsed with Council’s Certificate of Approval”.

142. A final inspection, on or about 12 July 1963, is noted at fol 73.

143. Council’s Certificate of Compliance, under s 317A of the 1919 LGA, was issued on 16 July 1963 (fol 75). (The original is to be found in Exhibit C1.)

144. The SP was registered on 6 August 1963, and ratified by the Owners Corporation, which also certified the plans annexed to it, on 22 August 1963 (fol 83).

145. At fol 85, there is a notification of a change of by-laws under the 1961 Strata Act, recording a unanimous resolution, passed on 21 August 1963, to add to the by-laws By-law 36, empowering the “Body Corporate” to “mark out” portions of the common property as three parking spots for owners of nominated residential lots in the project. Council’s solicitors wrote to the Town Clerk on 2 September 1963 (fol 86), regarding the implementation of this parking policy.

146. Folios 94 to 106 indicate that caveats were used to ensure that transfers of lots were made subject to a covenant in the appropriate form, so that no separately titled garage units would be sold to anyone who did/does not own a living unit within the building. Self-evidently, not all residents purchase a garage space, but the original purchase of Lots & and 15 (by Madeline May Holdsworth) was registered, with the covenant on 23 March 1964.

Title documents – Exhibit A1, tab B

147. The “land title documents” under tab B of Exhibit A1 (31 folios in all) include the following:

148. At fol 7, a search of the common property notes changes of by-laws and the respective unit entitlements of the 15 lots – Each residential lot (1 to 9) is entitled to 38 units, and each garage lot (10 to 15) to 2 units.

149. Title searches indicate that Seddon and Larsen are joint tenants in both Lot 7 and Lot 15 (fols 10 and 11), and that Grevatt owns Lots 6 and 10 (fols 12 and 13). Scheduled in both instances is covenant J609505. Folios 17ff show the covenant being endorsed on memoranda of transfer, e.g. that from Pelican Court to Holdsworth.

Correspondence from 2006 – Exhibit A1, tab C

150. In tab C of Exhibit A1, there are 73 folios of correspondence, commencing in 2006, but especially in 2009.

151. The exhibit includes (fol 1/73) another copy of Anthony Paul’s letter and sketch drawing dated 8 September 2006, addressed to the strata manager (see [27] above).

152. Paul wrote again 2 February 2009 (fol 3/73), saying:

As you are aware the laundry and toilet at 15 Crescent Street Fairlight are within part of the garage (Lot 15) with Unit 7 (Lot 7) and have been used by the other occupiers of the building on a casual arrangement for some time.

This letter is provided to you as advice that this arrangement will be ceased today. As Unit 7 and the garage are for sale we have been requested to clarify the status of the garage for prospective purchasers.

It is requested that the owners and tenants (apart from unit 7) of 15 Crescent Street Fairlight discontinue accessing the laundry as of today. It would be appreciated if the owners corporation could arrange to have the serviced washing machine removed promptly. A notice will also be installed in the laundry.

We sincerely apologise for the inconvenience this may cause.

153. So “ended” in 2009 an arrangement apparently in place since 1963.

154. At fols 4 – 5 is an email from Grevatt to Larsen, dated 23 February 2009, advising her that she should be receiving from the Owners Corporation a letter basically stating that it “naturally objects to the demolition of the laundry”, which has “been in-situ for decades”, but conceding “that it can not do anything about it”. Larsen was offered the use of the garage next to hers, then used by the current renters of Unit 8. He also raised with her the differential level of laundry floor, and asked her to park in Unit 8’s garage while the disputants have “some breathing space” to explore a solution.

155. On 5 March 2009 (fol 6), Tony Paul sought from the strata agent and Grevatt an assurance that the washing machine would be removed from Lot 15, before 5 April, to enable him to provide vacant possession on settlement.

156. On 11 March 2009 (fols 7, 8, and 10), Larsen advised Grevatt that she had been informed that without public liability insurance the respondents were responsible for anyone who entered their “title in the laundry”. She and Seddon were not willing to take out public liability cover, because of the expense involved, and, therefore, had been advised to have the doors closed on the laundry, and the washing machine removed. The taking of money for the use of the machine made the laundry a commercially operated facility, again with insurance implications, she said, and she proposed some options for the body corporate, which she regarded as “the most appropriate and the least expensive”. She concluded (fol 8):

... I am very sorry that everyone has not realised when they purchased their apartments that the laundry was not on strata title. Maybe they should all consider suing their solicitors and making them pay, rather than us.

157. Also on 11 March 2009 (fol 9), the strata manager instructed Mini Mat Laundry Equipment, the owner of the laundry equipment in Lot 15, to remove it before Sunday 5 April.

158. Grevatt responded to Larsen (fol 10) later on the 11th about the various options. He asked her to undertake the reclaiming of the whole space, at the respondents’ own expense, but not to level the floor immediately, as under-floor services may need to accessed for re-routing.

159. On 12 March 2009 (fol 11), the strata manager (Jocumsen) notified all owners and residents of SP 432 that (1) “no records exist with respect to the laundry’s original construction nor any agreements made at the time”, (2) the common laundry/toilet was “built within [the] boundary of the privately owned garage (Lot 15) as indicated on the Strata plans”, (3) vacant possession was required for sale of Unit 7, and, accordingly, (4) the washing machine was to be removed, and “the laundry and toilet doors will be sealed shut”.

160. On 30 March 2009 (fols 13 and 14), the Owners Corporation resolved “not to add to the common property a common laundry and toilet to be built on the common property”, to replace those facilities located within Lot 15. It further resolved to reinstate the washing machine to the Lot 15 laundry, and to remind owners that personal washing machines and/or dryers may not be installed within an allotted garage space without the approval of the Owners Corporation. (The Owners Corporation also declined to grant permission for Larsen and Seddon to keep a cat in Lot 7 and/or on the common property.)

157. On 31 March 2009 (fol 15), the then solicitor for the Owners Corporation, Graham Cochrane, advised Anthony Paul that it “was more likely than not that there had been an error by the surveyor in describing the boundaries” of Lot 15.

158. The Notice of the AGM of SP 432 on 31 August 2010 (fols 16 to 18) placed on the agenda a “special resolution”, which would decide upon a course of action for the Owners Corporation regarding the “claim of ownership” of the “communal laundry/toilet” by the owners of Lot 15 (Unit 7). The respondents’ intention to demolish was recorded in the notice, and the background to the resolution noted (1) that the architectural plans approved on “8/5/63” (see Plan (iv) in [125] above) show the facilities, which were built as part of the overall building project, (2) that they had remained in communal use for 47 years, and (3) that they were built as a specific requirement of Manly Council’s decision.

159. Financial options resulting from a mediation session in April 2010 were canvassed (fol 17), and alternative resolutions were proposed.

160. The minutes of that 31 August 2010 AGM (fol 19) show that the Owners Corporation “specially resolved to reject all claims of ownership by the owners of Lot 15 (Unit 7) over the area occupied by the communal laundry and toilet”. This represented a significant change in attitude over some 18 months from February 2009 from “can not do anything about it” ([154] above), to “reject all claims”.

161. On 17 September 2010 (fol 20), one of the owners involved in the removal of the laundry door contended that it “was illegally locked by the owners of Unit 7”.

162. The CTTT application dated “20.9.10” (fols 21 and 22) requested “an order by an adjudicator”, and included written submissions in respect of the requested orders (fols 23 and 24). Those submissions noted that, “although the facilities appear on approved architectural drawings, ... they have in fact been constructed on Lot 15, ... not on common property”, as a result of an error in the SP as registered on 30 July 1963 (?), and that the owners of Lot 15 had revoked further access by other owners, and changed the locks. The orders requested were (a) that the owners of Lot 15 remove the locks, (b) that no works be permitted to alter the structure until authorised by the Owners Corporation or further order, and (c) that the owners of Lot 15 were not to cause or permit construction or demolition of the laundry and toilet until such works are authorised by the Owners Corporation or further order.

163. Agreement was not reached at a mediation, and the application was dismissed by the CTTT adjudicator on 17 January 2011 (fol 25). Adjudicator O’Keeffe accurately recorded the relevant history (at fols 28 – 29), and then said (par 8 on fol 29):

I accept the respondents’ submission that the laundry and toilet area is ‘erected on and entirely within a portion of Lot 15’. Indeed it appears common ground that such is the case. Nevertheless, the applicant submits that an error occurred at the time the strata plan was registered. However, there is no evidence to support this contention and the plans suggest otherwise. The similar sized area of the lot and the equal number of unit entitlements gives weight to their argument. Furthermore, there is no persuasive evidence that the respondents have done or intend to interfere with common property contrary to their duty as provide (sic) by section 116.

168. There are details of the likely costs of various options (fols 30 – 32).

169. The later documents in tab C of Exhibit A1 reflect ongoing conversations about possible solutions. A letter from Phillipps on 10 December 2013 (fol 52) indicates no prior familiarity with the CDC upon which the respondents rely (see also email at fol 58). Folio 69 makes clear that a construction certificate (“CC”) is not required, as the Council combines a “complying development approval” with a “complying development certificate”, and considers that to have the same effect as a CC.

170. The respondents’ Notice of Commencement of Building or Subdivision Work, lodged on 3 December 2013 (fol 70), relies upon CDC 56/10, dated 27 October 2010 (fol 71), and notification thereof (fol 72). It was this Notice which precipitated the urgent interlocutory proceedings before Biscoe J ([39] above).

The balance of Exhibit A1 – tabs D, E and F

171. Tab D of Exhibit A1 contains various photographs and sketch plans etc of the facilities and building work within Lot 15, and of Lot 15’s proximity to the uncovered carparking spaces provided for residents, and located on the common property.

172. Tab E of Exhibit A1 contains principally, the 2010 CDC documentation from the Council file, regarding alterations to Lot 15 (CDC 56/10), and concludes with the inclusion (again) of Larsen’s emailed notification to Council 3 December 2013, of commencement of the work the CDC purported to approve (fol 49/49, c.f. tab D fol 70/73 above).

173. The CDC application (lodged 5 October 2010) is at fols 1 to 4. A computer record was added to tab E (at Tpp38 – 39, as fols 50 – 51). That record indicates that the proposal submitted on 5 October 2010 was not “notified”.

174. The CDC application was supported by a Statement of Environmental Effects (“SEE”), of which there were apparently two versions prepared by Ms Larsen (Tpp129 – 130, and see fols 5 to 19 c.f. fols 20 – 33). The earlier draft of the SEE included a proposal for a hebel wall at the northern end of the garage.

175. The Council’s undated assessment report, or “delegated authority report”, about which evidence was given by Mangion, commences at fol 15.

176. Mangion acted upon the SEE as received by Council on 5 October 2010. As already noted above ([93] – [101]) there is some question about the procedure Mangion followed in this particular case, but she assessed the proposal, having regard to s 79C of the EPA Act, the then applicable Manly Local Environmental Plan 1988 (“1988 Manly LEP”), and the relevant development control plan, and recommended it to the Manager of Development Assessment for conditional approval.

177. The Notice of Determination is at fols 44 – 45/49, and the actual CDC at 46 – 47/49. Both are dated 27 October 2010.

178. The complying development is wrongly described in the documents (see fol 46) as “removal of non-structural wall within Unit 7 of an existing [RFB]” (my emphasis). None of the contents of tab E would appear to make clear that the “garage/laundry of Unit 7” had, in fact, a different lot number (15).

179. The Court takes the view that even a physical inspection would probably not have indicated that fact, but the SEE makes clear that the proposed alterations affect Lot 15.

180. Tab F of Exhibit A1 contained affidavits read at the hearing, and noted earlier in this judgment ([67] to [101]).

Court Book Volume 2

181. Volume 2 of the Court Book (Exhibit A2) contains the following planning and building control instruments, etc:

Tab 1:   County of Cumberland Planning Scheme Ordinance (“CCPSO”), copy certified 12 May 1958

Tab 2:   An extract from what the index calls “Part IV Ordinance 71” dated 2 June 1960. (The extracts include elements of Parts I, II, II, and IV.)

Tab 3:   Manly Planning Scheme Ordinance (“MPSO”) 20 December 1968

Tab 4:   “The 1988 Manly LEP” (the historical version covering period 27 August 2010 to 24 February 2011).

Tab 5:   BCA National Construction Code section/clause “F2.1”, dated 2011 (said to have replaced Ordinance 71).

182. I turn now to consider some aspects of those documents.

Exhibit A2, tab 1 – Cumberland PSO

183. The CCPSO (Exhibit A2, tab 1) was first proclaimed on 27 June 1951, and Amendment No 1 to it on 2 August 1957. (It was the subject of much commentary in Murray Wilcox’s landmark text on “The Law of Land Development in NSW”, published by the Law Book Co of Australia in 1967.)

184. Relevant provisions of the CCPSO, to which the Court was referred during argument, were as follows:

185. Clause 4 applied the Ordinance to “all land within the Cumberland County district”, and cl 6 charged councils to be the “responsible authority” for carrying into effect, and enforcing, the provisions of the Ordinance. Clause 11 prohibited erection of a building, or the carrying out of work of a permanent character, without consent.

186. Part III dealt with “Building Restrictions and Use of Land”.

187. Clause 24, being the first clause in Part III, included various definitions which applied, “unless the context or subject matter otherwise indicates or requires”.

188. “Residential building” was defined to mean “a building, other than a dwelling-house, designed for use for human habitation, together with such outbuildings as are ordinarily used therewith, a [RFB], ...”; but it did “not include any building mentioned, whether by inclusion or exclusion, in the definitions of ‘places of instruction’ and ‘institution’”.

189. Clause 26 of Part III introduced a zoning table, Part I of which table identified, in the following columns, (I) zone, (II) reference to the scheme map; (III) purposes for which buildings may be erected or used without consent of responsible authority: (IV) purposes for which buildings may be erected or used only with the consent of the responsible authority; and (V) purposes for which buildings may not be erected or used.

190. In respect of “Living Area” (the zoning of the subject site at all material times), only “dwelling houses” were mentioned in Column III. Column IV relevantly mentioned, inter alia, “residential buildings”, and “any other purposes not referred to in Column III or Column V”. Column V specified uses not relevant to the present matter, and Part II of the zoning table dealt with only “living area (restricted)”, and also made no provisions relevant to the present case.

191. Clause 27, also in Part III, provided as follows:

Where application is made to the responsible authority for its consent to the erection or use of a building in a zone in which a building of the type proposed may be erected and used only with its consent, the responsible authority shall decide whether to give or withhold consent, and in the former event what conditions, if any, shall be imposed:

Provided that before determining any such application the responsible authority shall take into consideration –

(a)   the provisions of any planning scheme (including this scheme) affecting the land;

(b)   the character of the proposed development in relation to the character of the development on the adjoining land and in the locality;

(c)   the size and shape of the parcel of land to which the application relates, the siting of the proposed development and the area to be occupied by the development in relation to the size and shape of the adjoining land and the development thereon;

(d)   any representations made by any statutory authority in relation to the application or to the development of the area, and the rights and powers of any such authority;

(e)   the existing and likely future amenity of the neighbourhood including the question whether the proposed development is likely to cause injury to such amenity including injury due to the emission of nose, vibration, smell, fumes, smoke, vapour, steam, soot, ash, dust, grit, oil, waste water, waste products or otherwise; and

(f)   the circumstances of the case and the public interest.

192. Part VI of the CCPSO dealt with “Consents”, and cl 41 provided as follows:

(1) Any application for the consent of the responsible authority under the provisions of this Ordinance shall be made in writing to the responsible authority by the owner or his representative appointed in writing and shall be accompanied by the following plans and particulars: –

(a)   if the application is for consent to the use of a building or work or to the use of land, a plan in triplicate sufficient to identify the land to which the application relates and particulars in writing in triplicate of the purpose for which the building, work or land is used at the date of the application and the purpose for which consent is sought;

(b)   if the application is for consent to the erection of a building or the carrying out of a work, a plan in triplicate sufficient to identify the land to which the application relates and particulars, illustrated by maps and drawings in triplicate, sufficient to describe the building or work, its location on the site and the purpose for which it is to be used:

Provided that if an application relates only to the alteration, enlargement, extension of or addition to a building it shall be sufficient to show on the plan the site of the building and the alteration, enlargement, extension or addition in relation to such building and to furnish particulars relating only to the alteration, enlargement, extension or addition.

(2) Where, in pursuance of the Act (except Part XIIA thereof) or of an Ordinance made under the Act (except the said Part), and application is made to the responsible authority for its approval to erect a building such application shall, if the matter to which it relates requires the consent of the responsible authority under this Ordinance, be deemed to be an application for such consent, unless the application does not contain the information and particulars required by subclause one of this clause and the responsible authority so informs the applicant on or before giving its decision under the Act (except Part XIIA thereof) or under an Ordinance made under the Act (except the said Part).

(3)   (a) The responsible authority may grant the application unconditionally or subject to such conditions as it may think proper to impose or refuse to grant such application.

(b) The responsible authority shall cause notice to be given to the applicant of its decision and in the case of a consent given subject to conditions or of a refusal, the reasons therefor shall be indicated in the notice.

(4) An application shall be deemed to be refused if the responsible authority neglects or delays to give within forty days after service of the application a decision with respect thereto.

(5) Any consent given under this clause to the carrying out of development in a Living Area Zone shall be void if the development to which it refers is not substantially commenced within two years after the date of the consent: Provided that the responsible authority may, if good cause be shown, grant annual extensions or renewals of such consent beyond such period up to a further period of three years.

193. Clause 43 required that, before determining any application, the responsible authority must consider whether the development fell within a Foreshore Scenic Protection Area, and, if so, consult with the Cumberland County Council, and take into consideration any representations made by that council.

Exhibit A2, tabs 2 and 5 – Ordinance 71 and the BCA

194. In early 1960s, Ordinance 71 (Exhibit A2, tab 2), made under the 1919 LGA, relevantly provided, in cl 3, a definition of “RFB” to mean “a building containing two or more flats, but ... not ... a row of two or more dwellings attached to each other such as are commonly known as semi-detached or terrace buildings”.

195. Clause 4(a) provided:

Before the erection of a building is commenced, two copies of the plans and specifications thereof and of a plan and specification of any fences already erected or to be erected on or on the boundaries of the allotment on which the building is to be erected, together with an application in writing for approval thereof, shall be submitted to the Council and in the case of an application for approval to erect a dwelling-house not conforming to the requirements and specifications prescribed or approved by or under this Ordinance as to structural design, detail structural drawings shall also be submitted to the Council:

Provided that the Council may, if it sees fit, dispense with the necessity for the submission of a plan and specification of the fences or of plans and specifications to make minor alterations in an existing building or to erect building to be used exclusively for the purpose of a green-house, conservatory, summer-house, private boat-house, fuel shed, tool-house, cycle shed, aviary, milking bail, hay shed, stable, fowl-house, pigsty, barn, verandah, or the like: Provided also that any building (other than a verandah or an aviary) used or intended to be used for the keeping of domestic animals shall be wholly detached from any dwelling-house: Provided also that where it is desired to make some minor alteration to a building not materially affecting its stability, lighting, ventilation, or size of rooms, the application may in the first place be made without submitting plans and specifications, which shall, however, be submitted if the Council so require.

196. Part IV of the Ordinance dealt (cl 52) with “RFB”, and, in a specific provision (cl 56), with “kitchens, bathrooms, water closets etc” in “Domestic Offices”.

197. Clause 56 included the following relevant sub-clauses (which are not limited to “domestic offices”):

(b1)   Separate laundries shall be provided in a [RFB] at the rate of one for every four flats or part thereof with washtubs and copper or other means of washing clothes installed in each and the water laid thereto:

Provided that one laundry only shall be required to be provided for each eight flats or part thereof if –

(i)   two sets of wash-tubs and coppers or other means of washing clothes are permitted by the council to be installed in each laundry and the water laid thereto; or,

(ii)   mechanical equipment for washing and completely drying clothes is installed in each laundry.

...

(f)   Where a [RFB] contains not less than six and not more than twenty-three flats or where two or more [RFBs] are erected on land and such [RFBs] contain in the aggregate not less than six flats and not more than twenty-three flats and the land on which the [RFBs] are situated is not subdivided, a water-closet shall be provided in addition to the water-closet referred to in subclause (a) of this clause and the door of such water-closet shall be directly accessible from the outside of the building.

198. It is contended that the section/clause of the BCA numbered “F2.1” (Exhibit A2 tab 5), replaced Ordinance 71 in dealing with the “Facilities in Residential Buildings”, and remains current.

199. F2.1 contains a table, which requires that, “within each sole-occupancy unit”, laundry facilities, where provided as a separate laundry for each four sole-occupancy units or part thereof, should comprise:

(i)   clothes washing facilities comprising at least one washtub and one washing machine; and

(ii)   clothes drying facilities comprising –

(A)   clothes line or hoist with not less than 7.5m of line per sole-occupancy unit; or

(B)   one heat-operated drying cabinet or appliance for each 4 sole-occupancy units.

Exhibit A2, tab 3 – MPSO

200. The MPSO, dated “20 December 1968”, and gazetted on that date (Exhibit A2, tab 3), relevantly provided (cl 4), as a result of decisions taken in 1946, and then in 1969-70, and 1971, that the term “RFB” meant:

a building containing two or more flats, but does not include a row of two or more dwellings attached to each other such as are commonly know as semi-detached or terrace buildings and “flat” means a room or suite of rooms occupied or used or so constructed, designed or adapted as to be capable of being occupied or used as a separate domicile.

201. What remained of cl 57 (see note on folio 33 regarding deletions) provided:

(2) A person shall not erect or use a building for the purpose of a [RFB] unless provision is made within the site of the building for –

(a)   vehicle parking space of an area not less than 18 feet by 8 feet 6 inches for every flat within the building; and

(b)   proper vehicular access to such parking space.

(3) For the purposes of subclause (2) of this clause “vehicular parking space” includes any garage or court available for use by vehicles.

202. In “Part VIII – General”, specific provision was made for rights under the CCPSO, in the following terms (cls 66 and 69):

66. (1) Subject to subclause (2) of this clause the revocation, pursuant to paragraph (d) of subsection two of section 342L of the Act, of the County of Cumberland Planning Scheme to the extent to which it applies in respect of all land within the Municipality of Manly shall not affect –

405. He relied upon Larsen’s affidavit of 25 February 2014, in which she deposed (at [36]):

I agree that there is electricity and water supply to Lot 15 through walls and the ceiling and that there is water drainage from Lot 15 through the floor. The proposed works will not effect the electricity supply or wires. In my observation, the pipes which supply water to Lot 15 are only for Lot 15 and do not supply any other Lot or the common property. Lot 15 is on lowest level of the building at the back and end of the building and the water meter is at the front of the building near the street. Some taps and pipes are to be capped but all capping will be wholly within the space of Lot 15. We are not proposing to cap the floor waste but the toilet drain will be capped above the level of the floor.

406. I agree with Mr Docker. It may be true that the pipes and wires supply services to the common facilities on Lot 15 which are used by other lot owners, but I am not satisfied, on the balance of probabilities, that the wires/pipes supply services to any lot other than Lot 15. In my opinion, the relevant definition of “structural cubic space”, correctly construed, requires the pipes/wires to supply more than one “lot” – not just assist other lot owners – so that such services are “enjoyed” by those other lots. Use by other Lot owners is insufficient to alter the nature of the ownership of the pipes/wires.

407. The definition of “structural cubic space” included (sub-pars (b) and (c)) “any pipes, wires, ... not for the exclusive use of one lot and ... any cubic space enclosed by a structure enclosing any such pipes, wires ...”. Campbell J said in Le v Williams [2004] NSWSC 645 (at [55] and see Tp243, LL3 – 21):

Fixtures within the cubic spaces of a strata title lot (not including structural cubic spaces) are part of the lot: Lawrom Nominees Pty Ltd v Kingsmede Pty Ltd and Another [(“Lawrom”)] [2000] NSWSC 1048; (2000) 10 BPR 18,417 at [65] per Hodgson CJ in Eq. Thus, even if such fixtures are affixed to a wall, ceiling or floor which is common property, the fixtures themselves are owned by the registered proprietor of the lot. It is unusual, in real property law, for a fixture to be owned by someone different to the owner of the real estate to which it is affixed, but that unusual consequence follows, so far as owners’ fixtures are concerned, from the structure of the Strata Schemes (Freehold Development) Act 1973.

408. Accordingly the works are not on common property, and do not require owner’s consent. See also Burgechard v Holroyd Municipal Council [1984] 2 NSWLR 164; 53 LGRA 346 (Roden J), upon which Hodgson J relied in Lawrom.

409. Ground (3), therefore, fails.

Ground (4) – Council inspection

410. Ground (4) asserts that no “inspection” of Lot 15 was undertaken by the Council, prior to the grant of the CDC, as required by cl 129B(1) of the 2000 Regulation. A record of such inspection is required to be kept by the Council pursuant to cl 129C (see [248] above).

411. It is common ground that no record of inspection can be found in respect of the CDC. Ms Byrne submitted that, from this absence, the Court can infer that no inspection took place, thus invalidating the CDC.

412. Mr Seymour submitted that such an inference should not be drawn. Alternatively, he argued that (1) on a proper construction of cl 129B(1), a failure to inspect does not render the CDC invalid, and/or (2) a “desktop survey” of material concerning the subject land would suffice.

413. I have earlier summarized the evidence of Ellise Mangion (the town planner assigned to assess the CDC application), on the inspection issue (see [93] – [101]).

414. Larsen deposed (affidavit 20 May 2014) that, “towards the end of the week” prior to the issuance of the CDC, she received a phone call from a Council officer whose name she could not recall. During that conversation, the Council officer allegedly said that he/she was ringing to make sure the Council could get access to the relevant area, so that an inspection could take place. Larsen replied that access could be gained through the laundry door, which was unlocked, and that she would make sure to leave the garage door unlocked as well. Ms Byrne tested Larsen on this evidence at (Tp141, L11 – p142, L4), and Larsen was adamant that she received a telephone call from a Council officer requesting access.

415. The hearsay aspects of this evidence are clear, and were the subject of considerable debate (Tp114, L39 – p116, L38). The evidence was admitted, but not for its hearsay purpose.

416. However, during her cross-examination of Larsen, Ms Byrne raised the issue of her credit, in particular the question of whether she actually remembered such a conversation taking place. Following this, the following exchanges took place at (Tp142, L26 – p143, L6):

SEYMOUR: Your Honour, I do have an application, based on the conclusion of my friend’s cross examination of the witness, and that is that your Honour revisit the issue of whether that paragraph 2 [(sic)] of the affidavit sworn yesterday can be used for a hearsay purpose. The basis is this. My friend has now challenged this witness on her credit, whether she would have remembered that conversation and the witness has said, “Yes, I remembered it.”

That’s now relevant to the credibility issue of the witness and, based on section 60, because it’s admitted for that purpose it can now be used for its hearsay purpose. It was my friend’s choice to cross examine the witness in that way. The Act is clear in its terms that, once it’s in for a credibility purpose, it can be used for a hearsay purpose. My application is that the court now use that paragraph for that purpose.

DOCKER: I join in the application, your Honour.

BYRNE: Well, I was asking the questions so I didn’t take notes, but I’m told by my instructing solicitor that she didn’t validate the actual words.

HIS HONOUR: But that’s the whole point, isn’t it? You asked would she be able to really remember that if she didn’t remember what the person’s name was. No, I think the application is well founded.

BYRNE: In any event, I say that because of, one, the late service of the affidavit and the non-identification of the person, giving my client very little chance to test the conversation, section 136 applies and it’s unfairly prejudicial to my client. Now, I heard what Mr Docker said about that, but the fact of the matter is we served the proposed amended further amended summons on 11 April, your Honour - 11 April - and they had to make a forensic decision, as any lawyer does, as to whether the amendment is likely to be allowed and prepare accordingly. So that’s my application.

417. Section 136 of the Evidence Act 1995, as noted above ([258]) provides:

The court may limit the use to be made of evidence if there is a danger that a particular use of the evidence might:

(a)   be unfairly prejudicial to a party; or

(b)   be misleading or confusing.

418. Given the late service of the Larsen affidavit, and her inability to verify that it was indeed a Council officer with whom she had the conversation she alleged, I agree that admitting evidence of this conversation to prove the facts contained therein, namely that a Council officer requested access to the property for the purpose of an inspection, would be unfairly prejudicial. Accordingly, I have not had regard to the evidence of this conversation for its hearsay purpose.

419. Ms Byrne submitted (Tp212, L41 – p213, L8):

As to the evidentiary requirements, firstly we say the evidence doesn’t rise high enough that an inspection actually occurred. Secondly, there’s no record of the inspection. Thirdly, we tendered the notice to produce which asked for the record of inspection and there was nothing produced, and that became exhibit A7. There’s a principle that’s enunciated by the Court of Appeal in a case called [Baiada v Waste Recycling and Processing Service of NSW (“Baiada”) [1999] NSWCA 139; 130 LGERA 52]. What the Court of Appeal is saying there is that a decision maker has an evidential burden of proving the negative proposition. At paragraph 55:

“Where relevant facts are peculiarly in the knowledge of a defendant and where the defendant has the greater needs to produce evidence relating to those facts, then providing the plaintiff establishes sufficient evidence from which the negative proposition may be inferred, the defendant carries what has been called an evidential burden.”

So we say there’s no evidence of the actual inspection and counsel was unable to produce any documents of the inspection.

420. In Baiada, Mason P actually said (at [55]):

Where, however, relevant facts are peculiarly in the knowledge of a defendant or where the defendant has the greater means to produce evidence relating to those facts, then provided the plaintiff establishes sufficient evidence from which the negative proposition may be inferred, the defendant carries what has been called an evidential burden ... This principle would have assisted the appellants in seeking to disprove the existence of consent granted to the respondent. However, they succeeded on this point and no notice of contention has been raised against them.

421. His Honour later said (at [60]):

Nevertheless, in my view the appellants did establish to the requisite standard that no consent had been granted by the Council to itself. My reasons follow:

“(a) The registers were as probative in relation to the non-existence of consent to the Council as they were in relation to the non-existence of the relevant consent to the respondent. ...

(b) ... this particular application of the presumption of regularity cuts both ways in the present case. True it is that the appellants bear the onus of establishing the failure to do an action (ie obtain consent) the breach whereof is punishable at law. But the same can be said about the Council's obligations stemming from the BPSO and Ordinance 32 to record any consent in the register. ...

(c) The evidentiary groundwork was not laid for drawing the distinction that was ultimately critical to the determination of this case at trial. Indeed, it is somewhat unclear why his Honour was prepared to infer that no consent had been granted to the respondent, but was not prepared to infer that no consent was granted by the Council to itself. The same primary material is relevant to each. ...

(d)This was a case where it was proper to infer that, if the respondent held a relevant consent or evidence thereof, then it would have been produced. The proceedings were civil proceedings in which the appellants established evidence from which an inference favourable to their ultimate contention was clearly capable of being drawn. The respondent had it within its means to produce evidence of consent if it had it. Its failure to do so leads to an inference that no such evidence exists ... Jones v Dunkel (1959) 101 CLR 298 ...

(e)In my view the inference of lack of consent can more safely be drawn in the light of the letters of particulars from the Crown Solicitor's office which are extracted above. Coming from the solicitor for a party in the context of providing a response to a request for particulars, the letters are properly to be read as admissions that no ‘relevant approval’ was obtained other than the approvals identified in the letter of 13 December 1997 (none of which were found to constitute an approval under the BPSO). ...

(f)It is true that the appellant did not call anyone to prove the system of record keeping at the Council during the relevant period. But the appellants were not obliged to do so having regard to the probative effect of the registers produced.

(g)Talbot J considered that the accuracy of the register was undermined by the absence of any record relating to the development consent referred to in para (g) of the particulars provided by the Crown Solicitor's Office on 13 December 1996 ...

(h)To my mind, this is an area where the law should lean in favour of doing things ‘by the book’. A Council is not above the law, and should as a general proposition stand accountable for its actions. The creation of proper records evidencing the seeking and granting of consent serves several functions, including that of being the means of forcing a decision-maker to ensure due consideration of relevant issues and interests. Bearing in mind that the civil onus is involved, I see no reason why a court should hasten to draw a favourable inference in circumstances where the Council itself was shown to have been unable to produce the ultimately relevant consent.”

422. In light of Mason P’s reasoning in Baiada (c.f. J D Heydon, “Cross on Evidence”, Butterworths, 7th ed, 2004, p181, par [3240], and Connor v Blacktown District Hospital [1971] 1 NSWLR 713, at 721), I am of the opinion that it should be inferred in the present case that no physical site inspection took place.

423. The Council had an obligation under s 129C to make a record of site inspections carried out for the purpose of CDC assessment pursuant to s 129B. Had there been a physical site inspection, it can reasonably be inferred that such an inspection would have been recorded, particularly as Mangion said that it was “standard practice” to make such records. The absence of such a record provides a reasonable basis for the negative inference that there was no physical inspection.

424. The evidential burden on the inspection question rests on the Council, and Mr Seymour observed that, as s 129C(3)(c) provides that a record must be kept of the “type of inspection”, Mangion’s “desktop” perusal of the documentation which, she said, Council personnel include on the application file to assist assessment officers such as herself, should be sufficient. He submitted (Tp291, L50 – p292, L12):

If there are different types of inspection that implies that there’s a range of things that someone can do to inspect a premises and physical attendance there is only one type. So there must be times when you can carry out something less than physical inspection at the site and here I can remind your Honour we have internal alterations to a garage in a residential flat building when the assessing officer has those printouts on the file - does your Honour remember seeing those printouts that are put on every file that had an aerial photograph showing the footprint of the building in its locality and in its streetscape? And your Honour knows from the schedule that I took your Honour to on Friday, there are no requirements when it comes to internal alterations. You can carry out internal alterations to your heart’s content because there are no prescribed conditions on doing it.

425. Ms Byrne responded (written reply subs 4 June 2014, pars 11 – 12) as follows:

11.   An ‘inspection of the site of the development’ could not be read down to be satisfied by a desktop survey as submitted by Mr Seymour. The time period in which a CDC has to be determined means that a prompt and thorough inspection of the site of the development to determine if in fact the proposed development fits within the category of complying development under the EPI is essential. Subclauses 129C(3)(i) and (j) are specifically directed to this purpose. To suggest as Mr Seymour did that a ‘tick the box’ analysis from an assessing officer’s desk is sufficient is to set at naught the statutory mandate for a determination by the assessing officer that the proposed development is in fact in the location on the site and of the magnitude and scope stated on the application. This is particularly important for works to a RFB that is the subject of a plan of strata subdivision and to the issue of whether owner’s consent of the body corporate might be required before the CDC can be determined.

12.   Given that an accredited certifier can also issue [CDCs], to read down the prescriptive requirements in clause 129C as submitted by Mr Seymour creates a dangerous precedent. The court is well aware of serious failures by private certifiers since the EPA Act was amended to allow private certification of development in NSW. A variety of scenarios can be envisaged whereby an application for a CDC could be used to mask an unlawful use or unlawful demolition or serious environmental impacts which would not be discoverable unless the officer or accredited certifier actually physically inspected the site and made the records of inspection set out in clause 129C.

426. I agree with those submissions of Ms Byrne, and, therefore, conclude that the inspection requirement was not satisfied, by either means. It is, therefore, now necessary to determine the consequences of such a failure.

427. Mr Seymour then submitted that a failure to “inspect” the property would not necessarily invalidate the CDC. Such invalidation issues were the subject of consideration by me at first instance in Burwood Council v Ralan Burwood Pty Ltd [2013] NSWLEC 173, and then by Sackville AJA on appeal: Burwood Council v Ralan Burwood Pty Ltd (No 3) [2014] NSWCA 404; 206 LGERA 40.

428. The word “must” in cl 129B of the 2000 Regulation does not always mean “mandatory”. Mr Seymour said (Tp291, LL38 – 48):

So my friend says “must” indicates mandatory. Well, if that’s so, then everything about a complying development certificate is ... (not transcribable) ... including how it’s delivered to the council. Get that wrong and the whole thing is invalid. I mean, the word has been used but it can’t be derived that there is an absolute legislative intent that every time it’s used it means invalidity if you don’t do it. It’s a common word. It’s a neutral factor.

429. In contrast, Ms Byrne submitted (reply sub 10) that the use of the words “must not issue a development certificate unless an inspection is carried out”, in s 129B, clearly indicates that inspection is a mandatory requirement, so a failure to inspect would result in the invalidity of the CDC (Tp214, L31 – p215, L26).

430. I agree again with Ms Byrne. While it is true that the word “must” appears frequently in the regulations, sometimes it is perhaps employed loosely, and may not always signify a truly mandatory requirement, s 129B uses the clear words “must not”, and it seems to me that the Court should enforce the clear prohibitive wording of the provision.

431. For those reasons, I am satisfied that, on the balance of probabilities, the Council failed to carry out an inspection of Lot 15 prior to the grant of the CDC, and that such a failure renders the CDC invalid.

432. Accordingly, ground (4) is made out.

Summary on the Grounds of Challenge

433. In summary, the applicant succeeds on grounds (1), (2), and (4), but fails on ground (3), of its challenge.

434. It is, therefore, necessary now to turn the Court’s attention to questions of discretion, relief, and costs.

G: Discretion, Relief, and Costs

Delay

435. The Council raised the question of delay on the applicant’s part, arguing that the delay of more than three years in bringing these proceedings after the CDC was issued disentitles the applicant to any relief: Ex parteAbraham Malouf; Re Gee (1943) 43 SR (NSW) 195 (at 201 – 202 per Jordan CJ, and Council’s speaking notes, pars 41 – 43).

436. Mr Seymour said that the delay has caused prejudice to all respondents, as the memories of key witnesses, such as Ms Mangion, have faded. She could not be expected to recall precisely whether, in her busy assessment duties, she conducted an onsite inspection of a particular property over 3 years ago (Tp292, LL38 – 43).

437. He also criticised the applicant’s failure to enquire earlier as to whether CDC approval had been obtained for works to remove the common facilities, as the Owners Corporation was otherwise on notice of the respondents’ intention to exercise their rights over the whole of Lot 15, including the common facilities, many years previously (Tp292, L45 – p293, L34). He said (Tp293, L39 – p294, L2):

… your Honour can find that the delay has not been satisfactorily explained and that the applicant is just not worthy of a grant of relief. Now, I’ve framed that in paragraphs 41 to 43, both in terms of delay on itself is a ground for refusing judicial review and that’s Jordon J in Malouf’s(?) case that I’ve cited in paragraph 43. His Honour is saying where there’s unexplained delayed judicial review can simply be refused.

But I’ve also framed it in terms of discretion, your Honour. If your Honour was against everything that the council has put and there is a ground that your Honour is unsatisfied that the assessment in some respect of this complying development certificate we would submit to your Honour that given the length of delay and given the starting of proceedings without having done any search of the records and the subsequent change to the case to allege these challenges against the CDC, we would say it’s an appropriate case where your Honour would decline relief in any event.

438. In reply, Ms Byrne submitted that the Council’s making of a submission on delay is contrary to authority. She referred to Fatsel Pty Ltd v ACR TradingPty Ltd (1984) 54 LGRA 291, where Bignold J held (at first instance, at 295, not overturned on appeal) that, as s 123 of the EPA Act provides a statutory remedy which is not equitable in nature, equitable considerations, presumably including delay, are “irrelevant” (Tp295, LL8 – 28).

439. She also submitted that it was entirely reasonable that the applicant would wait, before commencing proceedings, until the respondents communicated their intention to act upon the CDC, particularly as the Owners Corporation had not been notified of the CDC approval (Tp296, L39). She said (Tp296, LL7 – 11):

Now the CDC is valid for five years. So why would you rush off to the Land and Environment Court seeking the inconvenience of rustling up the duty judge. As your Honour would know, one has to have a reason. Why would you do it any sooner than when there was the threat to actually commence the work

440. Given the fact that the applicant was not notified of the CDC when it was issued in 2010, I find it entirely reasonable that these proceedings were not brought until it not only became aware of the CDC, but also of the respondents’ imminent intention to rely on that CDC to commence works.

441. Accordingly, I find that delay is not a bar to the applicants’ obtaining relief, if otherwise appropriate.

Declarations

442. My findings on the grounds of challenge clearly entitle the applicant to its declarations. However, my rejection of ground (3) requires that I not declare that the proposed works involve common property.

Injunction(s)

443. The question of what injunctions ought follow is not so straightforward.

444. In prayer 3 of its FAS, the applicant seeks an order restraining the respondents from:

(i)   doing any works on the common property or facilities; and

(ii)   preventing the other Lot owners from using those facilities in Lot 15.

445. Mr Docker concedes, on behalf of the respondents, that the Court may restrain the respondents from acting on the CDC, but argues that it cannot restrain them from exercising their proprietary rights in respect of Lot 15, as to do so would sanction an ongoing trespass on their land, and would exceed the minimum relief appropriate to give effect to any success in the challenge. Mr Docker relied, in this regard, on Holland J’s decision in LDJ Investments Pty Ltd v Howard (“LDJ Investments”) [1981] Strata Title Law and Practice 30-035, at p 50,409, where His Honour talked about “wrongful” use and occupation of a plaintiff’s land in a Strata’d project as a “trespass”.

446. In his original written submissions, filed 19 May 2014, Mr Docker had said (par 24):

Prayer 3 in the Amended Summons seeks an injunction restraining Seddon and Larsen “from hindering or interfering with or preventing the use by” various others of Lot 15. Even if any grounds 1-3 are established, such relief goes well beyond the minimum relief necessary or appropriate to give effect to any of those grounds. This is because grounds 1-3 are raised in aid of the contention that the CDC is invalid. If it is invalid, the Court may restrain Seddon and Larsen from acting pursuant to the CDC but the invalidity of the CDC does not justify restraining Seddon and Larsen from exercising their proprietary rights in respect of Lot 15. To do so would be to sanction the ongoing trespass that is occurring on Lot 15 ...

447. In his oral submissions on 23 May, he submitted (Tp255, LL11 – 22):

In respect to discretion and the injunction, in my submission your Honour wouldn’t make an injunction that in any way requires the first and second respondents to continue to provide laundry facilities or toilet facilities in the lot or to provide access for that purpose. Firstly, because that would be sanctioning a trespass. Secondly, it would be inconsistent with the restrictive covenant that applies to the lot. Thirdly, what it would be doing is making the first and second respondents satisfy The Owners Corporation’s obligations in respect to the condition, which is particularly inappropriate in any event, but particularly in this case in circumstances where there’s an available alternative to The Owners Corporation who is choosing not to take it. Your Honour might recall that Mr Grevatt said that The Owners Corporation had no plans to build another laundry in cross-examination

448. Mr Docker later added, at the conclusion of his oral submissions on the respondents’ behalf (Tp258, LL27 – 36):

The last point I make is that in terms of an injunction there’s no evidence, firstly, that there’s been any breach yet. It’s all about apprehended breach. Also, in terms of what work is to be done the evidence is that it’s only what is referred to in the scope of works that was lodged with the CDC application. In my submission there would be no need for an injunction. If your Honour were to set aside the CDC then there’s no suggestion that the first and second respondents would proceed with the work anyway, and the rest of the injunction goes well beyond that and tramples on our property rights and so forth. So even if your Honour were to set aside the CDC, in my submission your Honour wouldn’t make an injunction.

449. The applicant’s argument that some distinction must be drawn, and acted upon, as between what is, at law, a trespass to land, and some type of “authorized intrusion”, by which I presume the applicant to mean what could technically be a trespass, but is allegedly authorized by some form of consent or user, was not developed, and I find no substance in it.

450. Mr Docker also submitted (par 25) that the Court lacks jurisdiction to enforce any proprietary rights or personal equity which the Owners Corporation may have in respect of Lot 15, such as to require correction of the register in respect of SP 432.

451. I agree with these submissions.

452. Whilst it is true that removal of the common facilities from Lot 15 would be contrary to the DC, the respondents remain the lawful owners of the land upon which those facilities are presently located, and orders which hinder the respondents’ assertion of their proprietary rights would be inappropriate.

453. This outcome means that, in many ways, the “dilemma”, of which I spoke in the Introduction to this judgment (at [7]), remains.

454. I have earlier referred ([264]) to the corrective provision in s 12 of the Real Property Act 1990. For many years the courts took the conservative approach to s 12, as Holland J did in LDJ Investments (see p 50,410).

455. That approach has softened in more recent times: see now Sahab Holdings Pty Ltd v Registrar-General [2011] NSWCA 395; Sahade per Kunc J; and the Case Note in (2014) 88 ALJ 452, at 458 – 9.

456. This present case has some factual similarities to LDJ Investments, where elements of a carparking area in a strata’d RFB in Point Piper were divided by a non-structural wall, which was omitted from the SP, and a dispute arose between the incoming owners of the two lots, one of whom, in choosing which lot to buy, was the victim of an “implied representation”, which he did not check out, and which proved incorrect. Only 3.8m² of space was in dispute.

457. In fact, the wall stood entirely on the plaintiff’s lot, and was not an encroachment.

458. Holland J took a conservative approach to the corrective power of the Registrar-General, but, “on the merits”, he made an order for possession, and a declaration of rights, and granted an injunction to the plaintiff, observing (at p 50,407) that the defendant was “the innocent victim of a mishap”.

459. His Honour found (at p 50,409 – as noted above in [445]) that the “wrongful act” was not the wall, but the use and occupation of the plaintiff’s land, which was a trespass. He opined (at p 50,409), that it was “not ... oppressive” to require the defendant to conform to his title, because he contracted to purchase according to a plan annexed to his contract, a plan which it was open to him to search.

460. His Honour, relevantly for the present case, commented (p 50,408):

unfortunately for the defendant, property law is cold hearted and whilst he may have the merits in his favour – I think he does – he does not have the law. Merits on the plaintiff’s side are at best, I think, dubious but not so the law. The plaintiff’s claim is made in the field of proprietary rights, where the law seldom permits sympathy or moral’s to intrude.

461. I will grant an amended form of the injunction sought in Prayer 3(i), but, in my discretion, I decline to grant the injunction sought in Prayer 3(ii).

Costs

462. Costs are sought by the applicant in Prayer 5 of the FAS, but, in her written “reply” submissions on 10 June 2014 (par 16), Ms Byrne said the applicant wished to be heard on costs.

463. In his written submissions on Council’s behalf, Mr Seymour twice (sub par 36, and final sub par 15) said only that costs should be ordered in Council’s favour if the applicant’s summons were to be dismissed. He did, however, frequently express, during the trial, Council’s concern regarding the amount of costs involved in these proceedings.

464. As earlier noted, the respondents drew the Court’s attention to ss 229ff of the 1996 Strata Act (see [286] above). In his speaking notes of 22 May 2014 (par 4) Mr Docker sought a s 229 order, but in his oral submissions on that same day, he said (Tp217, L43 – p218, L5):

The other thing I should, before I go into ground 3, raise is that there’s a section in the Strata Schemes Management Act 1996 which is section 229 that deals with costs in relation to cases or actions between strata owners corporations and lot holders. My primary submission in relation to costs, your Honour, is that it ought to await your Honour’s decision, but I just wanted to put it on the record perhaps mostly for Ms Byrne’s benefit, but the first and second respondents will be seeking an order under that section which provides that the court can make an order preventing an owners corporation from levying against the lot owner against whom it’s litigating to pay its own fees. As your Honour knows, the way in which owners corporations raise their fees is by levying the lot owners and that section is in there to protect lot owners who are being sued by owners corporations from having to contribute to The Owners Corporations’ fees.

465. In all these circumstances, it is appropriate that the question(s) of costs be reserved.

Orders

466. The Orders of the Court are, therefore:

1. The Court declares:

1. that the first and second respondents are carrying out or threatening to carry out works at 15 Crescent Street, Fairlight, being Lot 15 SP 432, in breach of the Environmental Planning and Assessment Act 1979; and

2. that Complying Development Certificate No CD56/10 issued by Manly Council on the 27th October 2010 to the first and second respondents is null and void and of no effect.

2. The Court orders that the first and second respondents, by themselves, their employees, agents and contractors be restrained from carrying out any works in the northern part of Lot 15 Strata Plan 432 occupied by laundry and toilet facilities and/or in any common property associated with such facilities.

3. Costs are reserved.

4. All exhibits are returned.

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Decision last updated: 01 May 2015