White v Betalli - [2007] NSWCA 243

No judgment structure available for this case.

Reported Decision: (2007) NSW Titles Cases 80-120

New South Wales

Court of Appeal

CITATION: White v Betalli & Anor [2007] NSWCA 243

HEARING DATE(S): 26 April 2007

JUDGMENT DATE:
14 September 2007

JUDGMENT OF: Santow JA at 1; McColl JA at 77; Campbell JA at 195

DECISION: 1. Leave to appeal granted; 2. Appeal dismissed; 3. Appellant to pay the respondent’s costs.

CATCHWORDS: REAL PROPERTY – Strata and related titles and occupancy – validity of special by-law created pursuant to s 43 Strata Schemes Management Act 1996 - special by-laws created right in favour of one lot proprietor to use or occupy part of lot owned by another to store small watercraft - STATUTES - Statutory Construction - expressum facit cessare tacitum – whether only available source of power to create right purportedly created by special by-law was s 88B, Conveyancing Act 1919 - STRATA TITLES AND RELATED TITLES AND OCCUPANCY – Strata Schemes Management Act 1996 s 43 – whether special by-law “appropriate to the type of strata scheme concerned” or inconsistent with Management Act or any other Act or law - REAL PROPERTY – land titles – registration – whether interest sufficiently recorded on the register if folio states the registration of the dealing creating it and identifies the interest.

LEGISLATION CITED: Commonwealth Conciliation & Arbitration Act 1904
Conveyancing (Strata Titles) Act 1961
Conveyancing Act 1919
Interpretation Act 1987
Real Property Act 1900
Strata Schemes (Freehold Development) Act 1973
Strata Schemes Management (Miscellaneous Amendments) Act 1996
Strata Schemes Management Act 1996
Strata Titles Act 1973
Building Units and Group Titles Act 1980 (Qld)
Companies Clauses Consolidation Act 1845 (Imp)
Prescription Act 1832 (Imp)
Public Health Act 1875 (Imp)

CASES CITED: Andrews v Wirral Rural District Council [1916] 1 KB 863
Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia [1932] HCA 9; (1932) 47 CLR 1
Bursill Enterprises Pty Ltd v Berger Bros Trading Pty Ltd [1971] HCA 9; (1971) 124 CLR 73
Clissold v Perry [1904] HCA 12; (1904) 1 CLR 363
Clos Farming Estates Pty Ltd (Recs and Mgrs Apptd)(ACN 003 435 256) v Easton and Another [2002] NSWCA 389; (2002) 11 BPR 20,605
Copeland v Greenhalf [1952] Ch 488
Deputy Commissioner of Taxation v Clark [2003] NSWCA 91; (2003) 57 NSWLR 113
Deputy Commissioner of Taxation v Dick [2007] NSWCA 190
Forestview Nominees Pty Limited and Anor v Perpetual Trustees WA Limited [1998] HCA 15; (1998) 193 CLR 154
Grigsby v Melville & Anor [1972] 1 WLR 1355
Hamlena Pty Ltd v Sydney Endoscopy Centre Pty Ltd (1990) 5 BPR 11,436
Harada v Registrar of Titles [1981] VR 743
Humphries v Proprietors Surfers Palms North Group Titles Plan 1955 [1994] HCA 21; (1994) 179 CLR 597
Johnson v Barnes (1873) LR 8 CP 527
Lolakis v Konitsas [2002] NSWSC 889; (2002) 11 BPR 20,499
Marquess of Zetland v Driver [1939] Ch 1
Mercantile General Life Reassurance Co v Permanent Trustee (1988) 4 BPR 9534
Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50; (2006) 81 ALJR 1
Motteram v Eastern Counties Railway Company (1859) 7 CB (NS) 58; 141 ER 735
Mulwala & District Services Club v Owners Strata Plan 37724 [2000] NSWSC 1040; (2000) 50 NSWLR 458
Pennant Hills Golf Club Ltd v Roads and Traffic Authority of New South Wales [1999] NSWCA 110; (1999) 9 BPR 17,011
Pirie v Registrar-General [1962] HCA 58; (1962) 109 CLR 619
Puflett v Proprietors of Strata Plan No 121 (1987) 17 NSWLR 372
Quazi v Quazi [1980] AC 744
R v Powell (1854) 3 E & B 377; 118 ER 1183
R v Young [1999] NSWCCA 166; (1999) 46 NSWLR 681
Re Ellenborough Park [1956] Ch 131
Reilly v Booth (1890) 44 Ch D 12
Ridis v Strata Plan 10308 [2005] NSWCA 246; (2005) 63 NSWLR 449
Sydney Diagnostic Services Pty Ltd v Hamlena Pty Ltd (1991) 5 BPR 11,432
The Owners of Strata Plan No 3397 v Tate [2007] NSWCA 207
Tittman v Traill (1957) 74 WN (NSW) 284
White v Betalli & 1 Or [2006] NSWSC 537; (2006) 66 NSWLR 690
Wilcox, Judge of the Federal Court, Re; Ex parte Venture Industries Pty Ltd (1996) 66 FCR 511
Wilson & Anor v Meudon Pty Ltd & Anor [2005] NSWCA 448
Woollahra Municipal Council v Local Government Appeals Tribunal & Renwyn Pty Ltd [1975] 2 NSWLR 594
Wright v Macadam [1949] 2 KB 744

PARTIES: Lynda Margaret White - Claimant
Christopher Nadir Betalli - First Opponent
Nicole Lee Puckeridge - Second Opponent

FILE NUMBER(S): CA 40447 of 2006

COUNSEL: B W Rayment QC with R W Tregenza - Claimant
P W J Gray SC with P E Koroknay - Opponents

SOLICITORS: Andreones Pty Ltd - Claimant
David Le Page - Opponents

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S): SC 4772 of 2005

LOWER COURT JUDICIAL OFFICER: White J

LOWER COURT DATE OF DECISION: 30 June 2006

LOWER COURT MEDIUM NEUTRAL CITATION: [2006] NSWSC 537

1

CA 40447/06
SC 4772/05

SANTOW JA
McCOLL JA
CAMPBELL JA
14 September 2007

Lynda Margaret WHITE v Christopher Nadir BETALLI and 1 Ors

Headnote

Facts

A strata plan for land at Marina Crescent, Gymea Bay, divided the land into two strata lots: lot 2 owned by the appellant and lot 1 owned by the respondents. Lot 1 faces the street, while lot 2 is behind lot 1 and faces Port Hacking.

When the strata plan was registered, two special by-laws, 20 and 21, were adopted along with residential model by-laws 1–19.

Special by-law 20 provided:

Area “A” is adjacent to Port Hacking. It has an area of 15 square metres.

The appellant bought lot 2 on or about 13 April 2002. The respondents bought lot 1 on or about 31 March 2004. In June 2005 the appellant undertook landscaping work which reduced area “A” to 4 metres by 2 metres and also made it more difficult to move a boat to and from the water.

The appellant sought a declaration that by-law 20 was ultra vires and of no force and effect and an order restraining the respondents from storing watercraft on lot 2. The respondents filed a cross-claim seeking a declaration that by-law 20 was valid and consequential relief.

The primary judge held that the subject matter of by-law 20 was an appropriate matter to be regulated by a by-law within the meaning of s 43(1) of the Strata Schemes Management Act 1996 (the “Management Act”). Accordingly the by-law was valid. He found that the landscaping work done by the appellant was done in breach of the by-law and ordered that it be removed.

The appeal raised the following issues:

1. Whether the application of the principle in Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia [1932] HCA 9; (1932) 47 CLR 1 meant that the power to create easements and restrictive covenants in s 88B of the Conveyancing Act 1919 precluded the use of s 43 of the Management Act to make a by-law creating a right in the nature of an easement to store watercraft on area “A”.

2. Whether by-law 20 was invalid because the power to make by-laws in the Management Act could not be used to confer a right on the respondents to use and occupy part of the appellant’s lot.

3. Whether by-law 20 was rendered invalid by the operation of s 43(4) of the Management Act due to inconsistency with s 42 of the Real Property Act 1900 on the basis that lot 2 could not be burdened by the interest in favour of lot 1 where that interest was not recorded on the folio of lot 2.

Held, per Santow JA (Campbell JA agreeing), granting leave to appeal and dismissing the appeal:

On the Anthony Hordern question

Per Santow JA:

1. By-law 20 purported to create a right in the nature of an easement or restrictive covenant: [21]

2. The Anthony Hordern principle does not apply in the case of two particular and distinct sets of provisions conferring distinct although overlapping powers, especially where they are contained in different (albeit connected) statutory instruments.

3. The strata titles legislation creates an alternative mode with distinct legal requirements and consequences for creating what is in the nature of an easement or restrictive covenant distinct from that under the Conveyancing Act. [30] – [32].

4. Accordingly the Anthony Hordern principle does not apply: [33], [51].

Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia

Per McColl JA:

5. In order to invoke the Anthony Hordern principle, the appellant had to establish that by-law 20 created either an easement or a restrictive covenant within s 88B of the Conveyancing Act. [176].

Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia [1932] HCA 9; (1932) 47 CLR 1, Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50; (2006) 81 ALJR 1 applied

6. In order to create a valid easement the right claimed must be capable of forming the subject matter of a grant and must not amount to exclusive possession of the servient tenement: [177], [181].

Re Ellenborough Park [1956] Ch 131, Copeland v Greenhalf [1952] Ch 488 applied

Grigsby v Melville and Another [1972] 1 WLR 1355, Wright v Macadam [1949] 2 KB 744, Herada v Registrar of Titles [1981] VR 743, Clos Farming Estates Pty Ltd (Recs and Mgrs Apptd)(CAN 003 435 256) v Easton and Another [2002] NSWCA 389 Pennant Hills Golf Club Ltd v Roads and Traffic Authority of New South Wales [1999] NSWCA 110; (1999) 9 BPR 17,011 considered
Reilly v Booth (1890) 44 Ch D 12, Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd [1971] HCA 9; (1971) 124 CLR 73, Mercantile General Life Reassurance Co v Permanent Trustee (1988) 4 BPR 9534 referred to

7. By-law 20 confers exclusive use and enjoyment of area “A” on the respondents and as such is not capable of forming the subject matter of a grant: [178] – [191].

Copeland v Greehalf applied

8. By-law 20 did not create a restrictive covenant which might have attracted the operation of s 88B.

9. Given the appellant’s failure to establish the existence of an easement or a restrictive covenant, the Anthony Hordern principle does not apply.

Per Campbell JA:

10. It is not necessary to decide whether the rights that by-law 20 conferred upon the respondent’s lot could have been validly created as an easement given that upon either approach, the Anthony Hordern principle does not apply: [207].

On the validity of the by-law under s 43 Strata Schemes Management Act

Per Santow JA (Campbell JA agreeing), holding by-law 20 valid:

11. By-law 20 deals with a matter “appropriate to the type of strata scheme concerned” within s 43(1) of the Management Act: [39].

Per McColl JA, holding by-law 20 invalid:

12. By-law 20 confers exclusive use and enjoyment of the area “A” on the respondents: [120].

13. There is no express provision in the Management Act authorising a by-law that confers a right on a lot proprietor to use another proprietor’s lot. The general worlds of the relevant provisions of the Act do not authorise such a by law. The conclusion that such a by-law could be made is inconsistent with both the express terms and manifest purpose of the Act: [141] – [169].

Humphries v Proprietors Surfers Palms North Group Titles Plan 1955 [1994] HCA 21; (1994) 179 CLR 597, Sydney Diagnostic Services Pty Ltd v Hamlena Pty Ltd (1991) 5 BPR 11,432 considered

Quazi v Quazi

Deputy Commissioner of Taxation v Clark

R v Young

14. By-law 20 is therefore inconsistent with the Management Act and has no force or effect: s 43(4) Management Act: [170].

Per Campbell JA:

15. The strata plan in this case was little different to a subdivision into two freehold parcels on which freestanding houses were constructed. As such, it was distinctly different to the situation with which the strata titles legislation is usually concerned. These should be considered relevant matters in deciding what counts as “matters appropriate to the type of strata scheme concerned” under s 43(1) of the Management Act: [213] – [214].

16. There is not a general policy in the strata titles legislative scheme that is inconsistent with according the words “matters appropriate to the type of strata scheme concerned” a meaning sufficiently wide to permit by-law 20 to be validly enacted: [218] – [219].

On inconsistency with the Real Property Act

Per Santow JA, (Campbell JA agreeing, McColl JA not deciding):

17. An interest is sufficiently recorded on the folio of the Register of the land if the folio states the registration number of the dealing creating it and identifies the interest: [55] – [71].

Bursill Enterprises Pty Ltd v Berger Bros Trading Pty Ltd

18. In this case, the registration did actually include in a folio the interest or entries in respect of by-law 20. There is no inconsistency with s 42: [72] – [74].

(1) Leave to appeal granted.
(2) Appeal dismissed.

(2) Appellant to pay the respondent’s costs.

**************

CA 40447/06
SC 4772/05

SANTOW JA
McCOLL JA
CAMPBELL JA
Friday 14 September 2007

Lynda Margaret WHITE v Christopher Nadir BETALLI & Anor

Judgment

1 SANTOW JA:

INTRODUCTION

2 By-law 20 purported to provide access for Lot 1 to use a specified watercraft storage area on the adjoining Lot 2, the latter being a waterfront lot. By-law 20 if valid, was created as a by-law when adopted by and lodged with the strata plan registered by the Registrar General for the strata scheme as in force at the date of lodgement. This could only be pursuant to s43 of the Strata Schemes Management Act 1996 (“SSMA”). Thus it was not a by-law made by the owners’ corporation relating to common property (compare s52 SSMA). Nor was it registered as a statutory easement under s88B of the Conveyancing Act 1919 that being said by the appellant to be its vice. Rather it was associated with such a registered easement being the right of footway allowing the respondents access over Lot 2 to its waterfront on Port Hacking.

3 The question of validity ultimately turns on the answer to two questions:

Conveyancing Act

Anthony Hordern

“when the Legislature expressedly gives a power by a particular provision which prescribes the mode in which it should be exercised and the conditions and restrictions which must be observed, it excludes the operation of general expressions in the same instrument which might otherwise have been relied upon for the same power.”

Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia

Question Two: was the purported by-law rendered invalid under s43(4) SSMA due to inconsistency with s42 Real Property Act 1900 (NSW), on the basis that Lot 2 could not be said to be burdened by the interest in favour of Lot 1 where that interest was not recorded on the folio of Lot 2?

4 The trial judge concluded these two questions in favour of the respondents Christopher Nadir Betalli and Nicole Lee Puckeridge. His Honour accordingly ordered restoration of the watercraft storage area to its former condition so as to remove certain obstructing landscaping works held to be in breach of by-law 20.

5 There are some ancillary issues in relation to these questions which I deal with under “Disposition” below.

SALIENT FACTS

6 The salient facts are essentially undisputed. There are however some issues of interpretation of what was recorded on the register to which I shall make reference later.

Nature of the land and Strata Plan in question

7 Strata Plan 67662 divides land located on Marina Crescent, Gymea Bay into the two lots. That land extends down from Marina Crescent to a frontage to Crown land at mean high watermark for Port Hacking which then extends further into Port Hacking.

8 The appellant is the owner of Lot 2 in SP67662. The respondents are the owners of Lot 1.

9 Lot 2 is the lower lot, fronting onto the Crown land. There is a right of footway over Lot 2 in favour of Lot 1, allowing the respondents as owners of Lot 1 access to Port Hacking.

By-law 20 and the challenge to it

10 A special by-law (by-law 20) was purported to be made under s52 SSMA. That by-law provided that the registered proprietors of Lot 1 had the right to store small watercraft within a specified area of Lot 2. That area comprised approximately 15 square metres. It was thus in place from the time the strata plan was registered having been promulgated by the developer. It was never sought, through the owners’ corporation, to introduce such a provision later via an amendment to the by-laws; that is to say after the creation of the lots in the strata plan.

11 Various disputes arose between the appellant and the first respondent concerning the first respondent’s use of the watercraft storage area and the validity generally of by-law 20.

12 Subsequent to the failure of mediation to resolve these disputes, the appellant undertook landscaping work on the area designated by by-law 20 as the watercraft storage area. Landscaping encompassed installation of wooden steps, erection of retaining walls and planting of native plants in a constructed earth bank. These works caused the area available for storage to be reduced to approximately 8 square metres and increased the difficulty with which watercraft may be placed in and removed from the storage area.

The dispute in the proceedings below

13 In the proceedings below, the appellant sought a declaration that by-law 20 was ultra vires and of no force or effect, and an order restraining the respondents from storing watercraft on Lot 2.

14 The respondents filed a cross-claim, successfully seeking a declaration that by-law 20 was valid and consequential relief, including removal of the wooden steps and retaining wall, and restoration of the watercraft storage area to its former condition.

15 The trial judge considered the principal issue to be the validity of by-law 20 and determined that it was valid as a by-law. His Honour answered the two questions earlier posed in the negative. The trial judge therefore did not have to determine whether, in the event of a finding of invalidity, the appellant was estopped from preventing the respondents storing a boat in the watercraft storage area. This would have been on the basis of certain alleged representations by the appellant and her solicitor in July 2004 indicating that there was no objection on their part to the storage of a small or inflatable boat in that area. The reasoning of that judgment otherwise emerges in the discussion under “Disposition” below.

DISPOSITION

16 By-law 20 is in the following terms:

“The Registered Proprietors for the time being of Lot 1 shall have the right to store small watercraft within the area denoted (A) on the sketch annexed to this instrument.”

17 The instrument in question is designated SP 67662 being the relevant strata plan for the two lots.

18 SP 67662 refers to a “right of footway, itself created pursuant to s88B of the Conveyancing Act 1919 and s7(3) of the Strata Schemes (Freehold Development) Act 1973”. That right of footway is in favour of Lot 1 to the rear of Lot 2. As the trial judge made clear at [7], the purpose of the right of footway and of by-law 20 is plain, namely to give the owners of Lot 1 access to the water at Port Hacking and a space on which to store a small boat near the water.

19 The by-law was expressed to be made under s52 of SSMA. It was and remains common ground that that section provided no authority for the by-law. Section 52 provides that an owners’ corporation may make by-laws to which Div 4 of Part 5 of Chapter 2 applies if certain conditions are satisfied. That category of by-law relates to the conferment of the right of exclusive use or enjoyment of common property or special privileges in respect of common property, neither being the case here.

20 Nor, as was common ground, was s46 applicable, relating as it does to by-laws made by an owners’ corporation in accordance with a special resolution.

21 The question then became under what source of power was by-law 20 capable of being promulgated. This is when, indubitably, by-law 20 purported to create what was in the nature of an easement or restrictive covenant. According to the appellant, the legislature had expressly given that power (to create what was in the nature of an easement or restrictive covenant) by another particular provision, effectively “in the same instrument”, namely s88B of the Conveyancing Act. Section 88B prescribed with particularity the mode in which that power should be exercised and the conditions and restrictions which must be observed. It thereby was said to exclude the operation of general expressions in the SSMA, such as s43 to achieve the same object.

22 The appellant thus invoked what I have earlier by way of shorthand called the “Anthony Hordern principle”. In Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trade Unions of Australia (supra) an award of the Commonwealth Court of Conciliation and Arbitration granting preference to unionists was struck down. This was on the ground that the provisions of that order did not conform with the conditions which s40 of the Commonwealth Conciliation and Arbitration Act 1904 prescribed as regards as giving preference to members of organisations. The question thus becomes whether that principle applies to the by-law-making power under SSMA.

23 The relevant provisions of s88B of the Conveyancing Act 1919 are set out below:

88B Creation and release of easements, profits à prendre and restrictions on use of land by plans

(2) A plan shall not be lodged in the office of the Registrar-General for registration or recording under Division 3 of Part 23 unless it indicates in the manner prescribed in respect of the plan by regulations made under this Act or the Real Property Act 1900:

(ii) appurtenant to any roads to be vested upon registration of the plan,

(c) what other easements or profits à prendre, if any, are intended to be created appurtenant to or burdening land comprised in the plan, and

(c1) what easements or profits à prendre, if any, appurtenant to or burdening land comprised in the plan are intended to be released or partially released, and

(d) what restrictions on the use of land or positive covenants, if any, are intended to be created benefiting or burdening land comprised in the plan.

(b) any easement so indicated as intended to be created pursuant to section 88A shall be created and shall without any further assurance vest in the relevant prescribed authority referred to in that section by virtue of such registration and of this Act,
(c) any other easement, profit à prendre or any restriction on the use of land (not being a restriction as to user of the type that may be imposed under section 88D or 88E) so indicated as intended to be created shall:

(ii) without any further assurance and by virtue of such registration or recording and of this Act, vest in the owner of the land benefited by the easement or profit à prendre or be annexed to the land benefited by the restriction, as the case may be, notwithstanding that the land benefited and the land burdened may be in the same ownership at the time when the plan is registered or recorded and notwithstanding any rule of law or equity in that behalf, and

(iii) not be extinguished by reason of the owner of a parcel of land benefited by such easement, profit à prendre or restriction holding or acquiring a greater interest in a separate parcel of land burdened thereby, and

24 The plan is to be lodged in the office of the Registrar General for registration or recording of, relevantly, easements or other restrictions on the use of land. Such a plan is one lodged pursuant to Div 3 of Part 23 being relevantly s195A of that Division and Part, but also, relevantly to the present case, includes a plan lodged pursuant to s7(3) of the Strata Schemes (Freehold Development) Act 1973. The latter is in the following terms:

Conveyancing Act

Real Property Act

25 The exception above is not applicable this not being old system land.

26 At the time of registration of a strata plan, s7(3) enables the creation of easements or restrictions on the use of land burdening or benefiting lots or common property in a strata plan. It thereby extends to strata plans the procedure set out in s88B of the Conveyancing Act 1919, so long as the land is held under the provisions of the Real Property Act 1900, as is this land; see “Strata Titles” by Neville Moses and others (Thompson Law Book Company) at 603.

27 The authors of the above work explain that the procedure represented a marked improvement on that adopted under the earlier 1961 Strata Titles Act. This was in overcoming the considerable delays which were frequently encountered when local councils insisted on the creation of easements before approving a strata plan. That usually necessitated the preparation of a further plan and involved delay pending its registration. Because of the terms of s88B(3)(c), notwithstanding the rules of law or equity to the contrary, the result will not differ should the dominant and servient tenements be vested in the same owner, as is the case where a developer wishes to create restrictions in the nature of easements or restrictive covenants at the inception of the strata plan.

28 The appellant then sought to invoke the Registrar General’s supervision of the registration process and the essential requirements for the creation of, relevantly, a restriction on use. The appellant did so in order to establish that the regime with its administrative outworking, under s88B was a distinct and particular one. This was to demonstrate that s88B did indeed satisfy the Anthony Hordern principle in its detailed prescription of the mode in which the relevant power to register such a restriction is regulated and supervised. The detailed procedure for such registration is set out in “Baalman & Wells Land Titles Office Practice” edited by Ticehurst (LBC) at 397-400. In particular, the restriction must comply with s88(1) of the Conveyancing Act so as to clearly indicate:

(b) the land which is subject to the burden of the restriction;

(c) the persons (if any) having the right to release, vary or modify the restriction other than the persons having, in the absence of agreement to the contrary, the right by law to release, vary or modify the restrictions; and

(d) the persons (if any) whose consent to a release, variation or modification of the restriction is stipulated for.

29 The way in which restrictive covenants under s88B may be varied or released is likewise prescribed in some detail; see Baalman and Wells at 401 and following.

30 The appellant’s argument invoking the Anthony Hordern principle seeks to overcome the difficulty that the Conveyancing Act does not constitute the same instrument as the relevant strata titles legislation. She does so by invoking s7(3) of the Strata Schemes (Freehold Development) Act as effectively constituting the one regime in a broad statutory sense.

31 The appellant likewise contends that the power expressed in detailed prescriptive terms in s88B is to be contrasted with a general power to create by-laws lacking any such detailed prescription under the strata titles legislation.

32 It is however at this point that the argument breaks down. This is because it can be clearly shown that the strata titles legislation creates an alternative mode for creating what is in the nature of an easement or restrictive covenant, with its own detailed prescription distinct from that under the Conveyancing Act. That mode has its own quite distinct legal requirements and consequences such as how one alters a particular restriction.

33 In this analysis it must be remembered that the “Anthony Hordern principle” is in reality no more than a presumption in aid of construction applicable in construing a particular provision conferring a power as opposed to general provisions of the same instrument which might otherwise confer the same power. It has nothing to say to two particular and distinct sets of provisions conferring distinct though overlapping powers more especially when in different albeit connected statutory instruments.

34 I need to turn to the distinct particularities in mode of exercise of the by-law-making power and in particular to the distinct conditions and restrictions which attend the creation of a by-law purporting to create what is in the nature of an easement or restrictive covenant under the strata titles legislation and specifically SSMA.

35 Division 1 of Part 5 of SSMA is headed “What by-laws apply to a strata scheme?”.

36 Section 41 then deals with new strata schemes in the following terms:

41 What by-laws apply to new strata schemes?

(1) This section applies to strata schemes that came into existence after the commencement of this section.

(2) The by-laws in force for a strata scheme are the by-laws adopted by or lodged with the strata plan registered by the Registrar-General for the strata scheme, as in force at the date of lodgment, subject to any amendment, repeal or addition recorded by the Registrar-General under section 48.”

37 Section 41 is accompanied by a note in the following terms:

“Note

Strata Schemes (Freehold Development) Act

Strata Schemes (Leasehold Development) Act

38 Section 43 in the same Division, is in the following terms:

“43 What can by-laws provide for?

(1) By-laws may be made in relation to any of the following:

……

matters appropriate to the type of strata scheme concerned.

39 I agree with the trial judge’s conclusion that the proposed restriction under by-law 20 did constitute a matter “appropriate to the type of strata scheme concerned” (see judgment [38]-[39]). I also agree with the trial judge that s43(2) could be called in aid were that necessary as extending the scope for by-laws beyond that in the list. Thus there is no threshold difficulty in by-law 20 providing as it does for the right to store small watercraft in the limited area. While it may affect the exercise or enjoyment by the appellant of her land, I do not consider that it is incompatible with the appellant’s right of possession; compare Wright v Macadam [1949] 2 KB 744(CA) and Copeland v Greenhalf [1952] Ch 488. The area in question is a small one, it allows the continued use by the appellant of the affected area, though subject to the respondent’s right to store a small watercraft within the designated area. Thus even were the traditional constraints applicable to easements to be imported to the strata titles legislation, I would not consider this requirement to be contravened that an easement must not be incompatible with the servient owner’s right of possession.

40 The trial judge at [37] sets out what in his view are the only limitations on the power of the owner of land being subdivided by a strata scheme of subdivision after 1 July 1997 to make by-laws:

(b) the express restrictions and prohibitions in s 49 of the Strata Schemes Management Act;

(c) the need to avoid inconsistency with any Act or law; and

(d) that the provision is made for a proper purpose and fairly falls within the concept of a by-law, that is, the regulation of the rights and responsibilities of lot owners, occupiers, or the owners corporation, in respect of the lots, or the lots and common property, for the strata scheme.”

41 The trial judge then quotes from the second reading speech of the New South Wales Minister for Fair Trading on the introduction of the Bill which became the Strata Schemes Management Act (Interpretation Act 1987 (NSW), s 34(2)(f)), where in introducing the Bill the Minister said:

“… one of the major initiatives in this Bill is to allow more flexibility in the use of by-laws, and to encourage the adoption of by-laws more appropriate to the nature of individual strata schemes. Too often in the past, bodies corporate simply accepted the by-laws included in the legislation without giving any thought to how well they fitted their scheme …

… there will now be a range of models from which by-laws can be selected depending upon the type of scheme involved. Six models are to be available and these will relate to the special aspects of residential schemes, mixed use schemes, commercial retail schemes, industrial schemes, hotels-resorts and retirement villages. The models will be in the regulations.

The contents of the models will reflect the types of matters which need to be addressed in the various types of strata developments. A strata scheme will not be able to be registered unless one of the models or alternative custom designed by-laws are selected …

42 I agree with the trial judge’s view that this is confirmatory of there being, as the strata titles legislation indicates, a broad capacity under that legislation to create by-laws, subject only to there being no incompatibility or inconsistency with any Act or law. Thus, the trial judge correctly concludes that certain restrictions in a by-law are precluded by s49. This exemplifies the distinctness of the regime for by-laws in imposing specific constraints on what by-laws may do. Here by-law 20 would clearly conform to s49, as it contains no restriction preventing dealings or restricting children or preventing the keeping of a guide dog. Section 49 also precludes a by-law resulting from an order being changed save by unanimous resolution.

43 Section 88B on the other hand is itself a distinct regime where prima facie such an easement or restrictive covenant would not be so constrained, save to the extent public policy would intervene.

44 It is significant that under Division 2 headed “How are the by-laws enforced?” s44 provides as follows:

44 Who is required to comply with the by-laws?

(1) The by-laws for a strata scheme bind the owners corporation and the owners and any mortgagee or covenant chargee in possession (whether in person or not), or lessee or occupier, of a lot to the same extent as if the by-laws:

(b) contained mutual covenants to observe and perform all the provisions of the by-laws.

45 The effect of s44 is to bind those specified including the relevant owners. This is as if the by-laws were the subject of mutual covenants to observe and perform their provisions signed and sealed by the owners’ corporation and each owner as well as by mortgagees, etc. That again is distinct from the s88B regime which actually requires that there be a covenant restricting the use of the servient land and otherwise satisfying the distinct requirements for a valid restriction to which I have earlier made reference.

46 The appellant sought to rely upon s47 of SSMA which is in the following terms:

47 Can an owners corporation add to or amend the by-laws?

An owners corporation, in accordance with a special resolution, may, for the purpose of the control, management, administration, use or enjoyment of the lots or the lots and common property for the strata scheme, make by-laws adding to, amending or repealing the by-laws for the strata scheme.”

47 In particular, the appellant contends that, based on the reasoning of the trial judge quoted below, it would follow that if a by-law could operate as a restriction on use of the land when created at the inception of the strata scheme, it could likewise be introduced by an addition or amendment to existing by-laws. It would thus, it is said, operate oppressively on someone who had acquired a strata lot before such addition or amendment took effect. This is what I call a “floodgates” argument.

48 I should quote the reasoning of the trial judge on this matter:

“[44] By-laws frequently interfere with the rights of property of an owner of a lot. In Sydney Diagnostic Services Pty Ltd v Hamlena Pty Ltd (1991) 5 BPR 11,432, the Court of Appeal upheld the validity of a by-law which prohibited a proprietor or occupier of a lot from engaging in any enterprise other than the practice of medicine, but excluding the practice of pathology. It was held that the power in s 58(2) of the Strata Titles Act enabling by-laws to be made for the purpose of, inter alia, the use of lots, extended to regulating what activities could and could not be conducted on each lot. The Court (at 11,443 and 11,434) rejected the argument that s 58(2) of the Strata Titles Act (the predecessor to s 47 of the Strata Schemes Management Act) only permitted the making of “non-discriminating by-laws” which equally affected all lots.

[45] As by-laws may be made which substantially interfere with the right of an owner of a lot to use the lot, it is hard to see why it should be contrary to the “scheme” of the Strata Schemes Management Act for a by-law to confer on one lot owner the right to use part of another lot. It may be that if such a by-law were made by the owners corporation, it could lead to injustice. As the Court of Appeal said of the same argument in Sydney Diagnostic Services v Hamlena, the remedy against such an injustice may be found in two quarters. One is that an owners corporation can only exercise the power to make a by-law for proper purposes. The second is to be found in the power of an adjudicator to make orders revoking an amendment to a by-law made by an owners corporation pursuant to s 157 of the Strata Schemes Management Act, or orders declaring a by-law made by an owners corporation to be invalid pursuant to s 159 of the Act.

49 The appellant’s argument really amounts to saying that such a by-law could operate oppressively if it could create restrictions on user. The oppression concededly is not from a by-law operating at the inception of a strata plan, since a purchaser would know what he or she was buying. Rather it is said to arise when introduced by later amendment after purchase. The trial judge correctly refuted that contention, pointing to the safeguards available to challenge such an amendment to a by-law. This could be by challenging the amendment as a fraud on the power or as a use of a by-law so amended for other than its proper purpose. Other safeguards include invoking the power of an adjudicator to make orders revoking such an amendment pursuant to s157 of SSMA or obtaining orders declaring such a by-law as amended to be invalid pursuant to s159.

50 Finally, I would adopt what is said by the trial judge at [47]-[48] in regard to s50 of SSMA:

50 Restrictions on by-laws during initial period

(1) An owners corporation must not, during the initial period, make, amend or repeal a by-law in such a manner that a right is conferred or an obligation is imposed on one or more, but not all, owners or in respect of one or more, but not all, lots.’

51 In sum, I consider that the Anthony Hordern principle does not apply to the present case. Here there are two distinct statutory regimes for the creation of what is in the nature of an easement or restrictive covenant. Each has its own distinct mode of application, subject to distinct conditions and gives rise to distinct consequences affecting, though not radically, attributes of the easement or restrictive covenant created under each regime. Those distinct attributes are illustrated by the greater entrenchment of a s88B easement or restrictive covenant compared to one created by by-law.

Inconsistency with s42 of the Real Property Act ?

52 Section 42 of the Real Property Act relevantly provides:

53 I agree with the trial judge’s conclusion that the appellant’s contention that the by-law is inconsistent with s42 of the Real Property Act cannot be dismissed on the ground that the by-law merely has contractual effect; it clearly represents a proprietary interest.

54 The trial judge, by the reasoning set out below, concluded that:

SSMA

55 I set out the trial judge’s reasons below:

‘such particulars, as the Registrar-General thinks fit, of

(i) other estates or interest, if any, affecting the land; and

‘1. Reservations and conditions in the Crown grant(s)

2. Attention is directed to the strata scheme by-laws filed with the strata plan

[67] The purpose of the Second Schedule is to record interests or reservations which affect the title to the land. The entry directing attention to the strata scheme by-laws filed with the strata plan is a record made on the folio CP/SP67662 of interests created by the by-laws. It follows that the interest created in favour of the registered proprietors from time to time of lot 1 over lot 2 pursuant to by-law 20 is recorded on the folio to lot 2 and is the subject of the entry on the folio to lot 2. Therefore, there is no relevant inconsistency between the by-law and the Register.

56 The respondent on appeal developed an argument which amounted to a contention that the actual by-law had in fact been “recorded in the folio” of the Register within the meaning of s42(1) of the Real Property Act, doing so by reference to an annexures F and H of the affidavit of Mr David Tremain of 11 November 2006, he being a registered surveyor.

57 The respondents contend that by virtue of the relevant provisions including definitions of the Real Property Act read with the Strata Schemes (Freehold Development) Act and in the events that happened, both the strata plan itself and the instrument by which the special by-law 20 was registered were not only required to be registered in the Register but were both so registered, these constituting annexures F and H to the Tremain affidavit.

58 The steps in this reasoning are as follows. The Register is defined in s3(1)(a) of the Real Property Act as “the Register required to be maintained by s31B(1)”.

59 The Real Property Act refers to the Register in these terms:

“31B The Register

(1) The Registrar-General shall cause a Register to be maintained for the purposes of this Act.

(2) The Register shall be comprised of:

(b) dealings registered therein under this or any other Act,

……

(4) The Registrar-General may, from time to time, vary the manner or form in which the whole or any part of the Register is maintained.”

60 These provisions should be read with the Strata Schemes (Freehold Development) Act, of which ss6(1) and 6(2) read as follows:

“6 Construction of Act

(1) This Act shall be read and construed with the Real Property Act 1900 as if it formed part thereof.

(2) The Real Property Act 1900 applies to lots and common property in the same way as it applies to other land except in so far as any provision of that Act is inconsistent with this Act or is incapable of applying to lots or common property.

61 I agree that this means that the definition of the “the Register” in the Real Property Act will thus apply to folios registered for strata plans, thus linking to s31B of the Real Property Act quoted above which directs the Registrar General to keep a register of folios, dealings and other records.

62 With respect to Torrens Title land generally the Registrar General creates a folio in the Register recording a description of the land to which it relates and certain particulars as to the estate or interest held in the land by the named proprietor or owner, etc; s32(1).

63 By s32(2) of the Real Property Act, it is provided that s32(1) does not apply in respect of the folio of the Register constituted under s22 or s23 of the Strata Schemes (Freehold Development) Act.

64 Section 22 of the Strata Schemes (Freehold Development) Act requires the Registrar General to create a separate folio stating that there is no common property, and containing certain other details relating to the administration of a strata scheme, where there is no common property. Section 23 of that same Act requires the creation of a folio for the common property of strata plans where there is common property.

65 It follows that s32(1) will thus still apply to the folio in the Register for each individual lot in the strata scheme, as there is no exclusion or separate provision in relation to individual lots.

66 I have earlier set out what is comprised in the Register, as distinct from the folio, pursuant to s31B(2) of the Real Property Act. From this it is apparent that it includes both folios and dealings registered under the Real Property Act or any other Act. This encompasses the record required to be kept pursuant to s32(7), being the requirement that the Registrar General “shall maintain a record of all dealings recorded in, or action taken in respect of, a computer folio, and such other information, if any, relating to the folio as the Registrar General thinks fit”.

67 “Dealing” is defined in s3 of the Real Property Act as follows: “Any instrument other than a grant or caveat which is registrable or capable of being made registrable under the provisions of this Act, or in respect of which any recording in the Register is by this or any other Act or any Act of the Parliament of the Commonwealth required or permitted to be made”.

68 It follows that both the strata plan itself and the instrument by which the special by-law 20 was registered are required to be registered in the Register. These, as I have said, were so registered as evidenced by the Tremain annexures F and H. The latter contains the actual by-law.

69 I should add that a document recording a by-law, or change of by-law, is under s48 SSMA a “dealing”: Mulwala & District Services Club v Owners Strata Plan 37724 (2000) 50 NSWLR 458 per Young J.

70 Reverting to s42 of the Real Property Act, exceptions to indefeasibility for a registered property of an estate or interest in land recorded in a folio of the Register include “such other estates and interests and such entries, if any, as are recorded in that folio” [emphasis added].

71 An interest is sufficiently “recorded in the folio” of the Register of the land if the folio states the registration number of the dealing creating it and identifies the interest (if only in generic terms): Bursill Enterprises Pty Ltd v Berger Bros Trading Pty Ltd (1971) 124 CLR 73 at 77-8, 92-3; see also Butt, “Land Law”, 5th edition (2006) para [2079].

72 I should add that Annexure H itself contains a notification of registration at the foot thereof; see Tremain affidavit pp25-6.

73 It follows from the foregoing that even were it insufficient for a Register to merely incorporate by reference a relevant strata scheme by-law filed with the strata plan, a proposition which I would not accept, the registration here did actually include in a folio the interest or entries in respect of by-law 20.

74 It is thus not necessary to consider the proposition contained in the judgment at [68] quoted above. This is insofar as it relies upon s44 of SSMA as providing an exception to indefeasibility on the supposition that the Registrar General had omitted to record the relevant interest so as to invoke s42(1) by reason of the by-law being inconsistent therewith.

OVERALL CONCLUSION

75 I consider that by-law 20 was validly created and that the declarations and orders made in consequence were correctly made.

ORDERS

76 Accordingly I would propose orders as follows:

(2) Appeal dismissed.

(3) Appellant to pay the respondent’s costs.

77 McCOLL JA: This case concerns the question whether the power to make by-laws in the Strata Schemes Management Act 1996 (the “Management Act”) can be used to confer a right on one proprietor in a strata scheme to use or occupy part of the lot of another proprietor. In this case by-law 20 purported to confer on the respondents the right to use part of the appellant’s lot, measuring approximately 15 square metres, to store watercraft.

78 I have had the benefit of reading Santow JA’s reasons in draft. I agree with his Honour that leave to appeal should be granted. However I differ with his Honour’s proposal as to the disposition of the appeal.

79 In my opinion by-law 20 is invalid. The Management Act does not expressly authorise the making of a by-law conferring a right on one proprietor in a strata scheme to use or occupy part of the lot of another proprietor. Nor can the power to make such a by-law be implied.

Legislative framework

80 The long title of the Management Act is “an Act to provide for the management of strata schemes and the resolution of disputes in connection with strata schemes; and for other purposes”. The objects of the Management Act reflect its long title: see s 3. The owners corporation has the principal responsibility for the management of the strata scheme: s 8(2). It is constituted by the owners of the lots from time to time in a strata scheme: s 11(1) and has the functions conferred or imposed on it by or under the Management Act or any other Act: s 12.

81 Part 5 of the Management Act deals with the making of by-laws. It appears in Chapter 2 of the Act which is headed, “Management of Strata Schemes”. According to the Introductory Note to Part 5, it “deals with by-laws for a strata scheme governing such things as the behaviour of residents of the scheme and the use of common property”. The Note does not form part of the Management Act (s 7), but being set out in the document containing the text of the Act as printed by the Government Printer, may be considered in its interpretation: s 34(2)(a), Interpretation Act 1987.

82 Part 5, Div 1 deals with the by-laws which apply to a strata scheme. Pursuant to s 41 the by-laws in force for the strata scheme for lots 1 and 2 were the by-laws adopted by or lodged with the strata plan registered by the Registrar-General for the strata scheme, as in force at the date of lodgement, subject to any amendment, repeal or addition recorded by the Registrar-General under section 48.

83 Part 5, Div 1, s 43 provides:

43 What can by-laws provide for?

(1) By-laws may be made in relation to any of the following:

details of any common property of which the use is restricted

the keeping of pets

parking

floor coverings

garbage disposal

behaviour

architectural and landscaping guidelines to be observed by lot owners

matters appropriate to the type of strata scheme concerned.

(3) The regulations may prescribe model by-laws which may be adopted as the by-laws for a strata scheme.

(4) A by-law has no force or effect to the extent that it is inconsistent with this or any other Act or law.”

84 Part 5, Div 3 deals with the amendment or repeal of by-laws. Section 47 permits an owners corporation, in accordance with a special resolution, for the purpose of the control, management, administration, use or enjoyment of the lots or the lots and common property for the strata scheme, to make by-laws adding to, amending or repealing the by-laws for the strata scheme.

85 Part 5, Div 3 also restricts the making of by-laws. Thus s 49(1) provides:

Restrictions on by-laws

(1) By-law cannot prevent dealing relating to lot

86 In addition s 49 provides that by-laws cannot change a by-law resulting from an order made under Chapter 5 (Disputes And Orders Of Adjudicators And Tribunal), cannot prohibit or restrict persons under 18 years of age occupying a lot and cannot prohibit or restrict the keeping on a lot of a dog used as a guide or hearing dog by an owner or occupier of the lot or the use of a dog as a guide or hearing dog on a lot or common property.

87 Section 50(1) provides:

88 Part 5, Div 4 makes special provisions for by-laws conferring certain rights or privileges. It enables an owners corporation to make by-laws conferring on the owner of a lot specified in the by-law, or the owners of several lots so specified, (a) a right of exclusive use and enjoyment of the whole or any specified part of the common property, or (b) special privileges in respect of the whole or any specified part of the common property (including, for example, a licence to use the whole or any specified part of the common property in a particular manner or for particular purposes): s 51(1).

89 A by-law made pursuant to s 51 must provide for the maintenance of the common property as follows:

“54 By-law must provide for maintenance of property

(b) impose on the owner or owners concerned the responsibility for that maintenance and upkeep.

(3) To the extent to which a by-law to which this Division applies makes a person directly responsible for the proper maintenance, and keeping in a state of good and serviceable repair, of any common property, it discharges the owners corporation from its obligations to maintain and repair property under Chapter 3.”

90 Title to lots in a strata scheme is dealt with in Strata Schemes (Freehold Development) Act 1973 (the “Freehold Development Act”), the long title to which is, relevantly, “[a]n Act to facilitate the subdivision of land into cubic spaces and the disposition of titles thereto”. The Freehold Development Act enables land, including the whole of a building, to be subdivided into lots, or into lots and common property, by the registration of a plan as a strata plan: s 7(2). The provisions of s 88B of the Conveyancing Act 1919 apply to a strata plan and a strata plan of subdivision in the same way as they apply to a plan referred to in that section relating to land under the provisions of the Real Property Act 1900: s 7(3).

91 Registration of the strata plan creates both the strata title lots comprised therein and any common property: ss 7, 8, Freehold Development Act. Once the strata plan is registered, the common property vests in the owners corporation constituted under s 11 of the Management Act: s 18, Freehold Development Act.

92 Each lot is owned by a proprietor, being the person for the time being recorded in the Register kept by the Registrar-General as entitled to an estate in fee simple in that lot: definition of “proprietor”, s 5, Freehold Development Act.

93 A plan intended to be registered as a strata plan must indicate that specified model by-laws prescribed by the regulations made under the Management Act were proposed to be adopted for the strata scheme and that other specified by-laws are proposed to be adopted for the scheme: s 8(4B), Freehold Development Act. If a strata plan indicates that by-laws other than the model by-laws prescribed by the regulations made under the Management Act are to be adopted for the strata scheme, the plan must be accompanied by the by-laws specified: s 8(4C). The by-laws proposed for a strata scheme have no effect until the strata plan (and any proposed by-laws that are required to accompany it) are registered, however, registration does not give effect to by-laws that were not lawfully made: s 8(4D), Freehold Development Act.

94 At the time Strata Plan 67662 was registered, the model by-laws for different types of strata schemes were set out in Schedule 1 of the Strata Schemes Management Regulation 1997 (see now cl 27, Sch 1–6, Strata Schemes Management Regulation 2005). The model by-laws for residential schemes were adopted on the registration of the strata plan for lots 1 and 2: see SP67662, Sheet 1 of 4. Those by-laws largely dealt with behavioural matters such as noise, parking of vehicles, appearance of lots. Clause 19 provided:

19 Provision of amenities or services

(1) The owners corporation may, by special resolution, determine to enter into arrangements for the provision of the following amenities or services to one or more of the lots, or to the owners or occupiers of one or more of the lots:

(b) garbage disposal and recycling services,

(c) electricity, water or gas supply,

(d) telecommunication services (for example, cable television).

Note: Section 111 of the Act provides that an owners corporation may enter into an agreement with an owner or occupier of a lot for the provision of amenities or services by it to the lot or to the owner or occupier.”

95 I will return to the significance of this by-law.

Statement of the case

96 The facts are not in dispute and can be reproduced from the reasons of the primary judge, White J: White v Betalli & 1 Or [2006] NSWSC 537; (2006) 66 NSWLR 690 (at [2] – [19]):

Background

2 Strata plan SP 67662 was registered on 11 April 2002 by a Mr and Mrs Thompson. The strata plan divided land then known as lot 36 in DP 215533 at Marina Crescent, Gymea Bay, into two strata lots. The plaintiff owns lot 2 in SP 67662. The defendants own lot 1. A house is constructed on each lot.

3 The two lots lie between Marina Crescent to the west and Port Hacking to the east. The northern boundary of both lots abuts a reserve. Lot 1 is the higher lot, with street frontage to Marina Crescent. It lies to the west of lot 2. Lot 2 is the lower lot, with frontage to Crown land at mean high watermark and thence to the water. There is a right of footway in favour of lot 1 to the rear, or eastern end, of lot 2. The rear of lot 2 is steeply sloping ground. From its boundary at mean high watermark there is a strip of Crown land. This was formerly grassed and is now partially landscaped. On this land there is a seawall dividing the land and the water at Port Hacking.

4 The strata plan adopted residential model by-laws 1-19, plus two special by-laws, 20 and 21. These by-laws were said to be made under s 52 of the Strata Schemes Management Act 1996 (NSW). The present dispute concerns by-law 20. It provides:

“The registered proprietors for the time being of lot 1 shall have the right to store small watercraft within the area denoted (A) on the sketch annexed to this instrument.”

6 The owner of lot 1 has access to the watercraft storage area via the right of footway. At the eastern end of lot 2, the right of footway extends across the whole of the lot, except for a boatshed which is on the south-eastern corner of the lot. This boatshed belongs to lot 2, save for a portion of it which encroaches onto Crown land below the mean high watermark. That portion of the boatshed is common property. By-law 21 provides that the portion of the boatshed that extends beyond the mean high watermark is for the exclusive use, and is to be maintained by, the registered proprietor of lot 2.

7 The purpose of the right of footway and of by-law 20 is plain. The purpose is to give the owners of lot 1 access to the water at Port Hacking, and a space on which to store a small boat near the water.

8 Lot 2 is known as 2 Marina Crescent, Gymea Bay. The plaintiff bought this property on or about 13 April 2002. Lot 1 is known as 2A Marina Crescent. This land was initially bought in or about August 2002 by a Mr and Mrs Dedda. On or about 31 March 2004, the defendants exchanged contracts to purchase lot 1 from Mr and Mrs Dedda. They moved into the property on 29 June 2004.

9 After they moved in, the first defendant, Mr Betalli, put a 3.5 metre boat and trailer in the watercraft storage area. The trailer was connected to a sapling by a winch. The plaintiff and her husband objected to this, pointing out that there was no right to store a trailer. The plaintiff also complained that the boat and trailer extended outside the storage area and were not stored safely. On 16 July 2004, the solicitors for the plaintiff, Benetatos White, wrote to Mr Betalli. They contended that the boat then stored on lot 2 was not a small watercraft but a medium sized boat. They demanded that the defendant remove the boat, the trailer and the winch. Benetatos White also stated that the plaintiff had no issue with the storage of small watercraft by Mr Betalli in accordance with the terms of by-law 20.

10 After receiving this letter, Mr Betalli asked the plaintiff if she would have any objection to an inflatable boat being put in the watercraft storage area. She said she did not, provided the boat fitted in the designated area, was safe, and did not cause damage.

11 Following this conversation, Mr Betalli purchased an inflatable boat.

12 On 8 August 2004, the boat and trailer then being stored in the watercraft storage area were removed. In about late August 2004, the inflatable boat was put in the watercraft storage area and secured to a tree. The plaintiff’s husband helped with this.

13 It might have been hoped that this would be the end of the issue. However, that was not the case.

14 In December 2004, the plaintiff advised Mr Betalli that she had received a letter from the Department of Lands indicating that the by-law for the storage of the boat was invalid, because it was on her property and not common property. She advised him that she proposed to call an annual general meeting of the body corporate so that the by-law could be removed. On 27 January 2005, she convened that meeting. The meeting was held on 12 February 2005. However, the resolution to repeal by-law 20 on the ground of its not being valid was not passed. The defendants voted against that resolution.

15 A mediation was held on 5 May 2005, but it failed to resolve the dispute.

16 On the weekend of 4 and 5 June 2005, without prior notice, the plaintiff caused a retaining wall to be constructed in the watercraft storage area. At or about this time, she also caused steps to be built extending down to the water’s edge. These were wooden steps which joined up with existing concrete steps. However, the steps also extended into the watercraft storage area. Associated with these works, the plaintiff carried out landscaping work, involving the construction of an earth bank on which native plants were planted, and which appears then to have been covered with wood chips. This work was done partly on the watercraft storage area and partly on the Crown land.

17 The result of these works is that the area which can physically be used for the storage of watercraft has been substantially reduced. Before the work was carried out, the watercraft storage area was about fifteen square metres. It was a grassed area which extended at its southern edge to the bottom concrete step. At its eastern edge, which was the boundary of lot 2, there was an earth and grass bank which led over the grassed strip of Crown land to the seawall. After the work was carried out, the effective area for storing a boat was effectively the area within the retaining walls. These walls were about 0.6 metres high and were positioned well inside the watercraft storage area. They extended about 0.7 metres into the adjacent reserve so that the practical storage space extended into the reserve and outside the boundary of lot 2. Within the confines of lot 2, the area now physically available for the storage of a boat is limited to an area of about four metres by two metres.

18 The construction of the retaining wall and steps, and the landscaping, has made it more difficult for a boat to be taken down to the water from the watercraft storage area. A boat now has to be lifted over the retaining wall and across the garden which has a steeper incline than existed previously as a result of the earth fill which has been put on the site. The plaintiff said in evidence that there has been no change in the incline, but I do not accept this evidence. The change is apparent from the photographs.

19 Mr Betalli continued to store the inflatable boat in the watercraft storage area until November 2005. After the construction of the retaining wall and the steps in June 2005, it was difficult to drag the boat over the retaining wall and down to the water and back again without assistance. In November 2005, he replaced that boat with a 3.5 metre aluminium boat because the inflatable had a deflated keel and floor.”

97 Lot “A” (albeit identified by the letter “X”) was set out in the plan reproduced below which was attached to the primary judge’s reasons:

98 In the proceedings the appellant claimed a declaration that by-law 20 was ultra vires and of no force or effect and an order restraining the respondents from storing watercraft on lot 2. The respondents filed a cross-claim seeking a declaration that the by-law was valid and consequential relief, including an order that the appellant be required to remove the wooden steps and retaining wall constructed in the watercraft storage area, and restore that area to its former condition.

99 It was common ground before the primary judge, and in this Court, that no section of the Management Act expressly conferred power on the owner of land to be subdivided into a strata scheme to make by-laws: primary judgment at [33]. The primary judge concluded that that power was to be inferred from the combination of ss 41 and 43 of the Management Act and s 8(4C) of the Freehold Development Act: see primary judgment at [33] – [36].

100 After referring to those provisions, the primary judge concluded (at [37]):

“[T]he only limitations on the power of the owner of land being subdivided by a strata scheme of subdivision after 1 July 1997 to make by-laws are:

(a) the need for the consent of mortgagees and other holders of security under ss 8(4C) and 16 of the Strata Schemes (Freehold Development) Act ;

(b) the express restrictions and prohibitions in s 49 of the Strata Schemes Management Act ;

(c) the need to avoid inconsistency with any Act or law; and

101 He held (at [38]) that the subject matter of by-law 20, the provision of a storage area for small watercraft for the benefit of the upper lot, was an appropriate matter to be regulated by a by-law (s 43(1)). In his Honour’s opinion (at [38]) whether or not by-law 20 was authorised under s 43(1) of the Management Act being “in relation to ... matters appropriate to the type of strata scheme concerned”, it would be valid, provided it was not inconsistent with s 49, or any other Act or law: see s 43(4).

102 His Honour (at [39]) did not consider that s 43(1) should be construed narrowly or at too high a degree of generality. Thus, in his view:

“The present strata scheme could be classified as a residential scheme of a type, being a subdivision of land next to water into a small number of residential lots and common property. The storage of boats belonging to the occupier of any lot in such a subdivision is a matter appropriate to that type of scheme.”

103 The primary judge then turned to determine whether by-law 20 was inconsistent with any other provision of the Management Act, or any other Act or law. He opined (at [40]) that if by-law 20 was not authorised by s 43(1), that subsection was “not an exhaustive statement of the power of the original owners to make by-laws to accompany the registration of the strata plan and the by-law is otherwise within the scope and object of the Act.” His Honour did not identify any other source of power for original owners to make by-laws to accompany the registration of the strata plan. The argument has proceeded in this Court on the basis that ss 41 and 43 were the critical provisions to which regard should be paid in determining the validity of by-law 20.

104 His Honour found confirmation (at [41]) for his view in the Second Reading Speech of the New South Wales Minister for Fair Trading on the introduction of the Bill which became the Management Act (New South Wales Legislative Assembly, Parliamentary Debates, (Hansard) 13 November 1996, 5916 at 5921). In her speech the Minister elaborated on the proposition that:

“... one of the major initiatives in this Bill is to allow more flexibility in the use of by-laws, and to encourage the adoption of by-laws more appropriate to the nature of individual strata schemes.”

105 The primary judge then considered s 47 of the Management Act, on the premise (at [42]) that there was no reason to think that the power of the original owner to make by-laws which accompany the strata plan on its registration should be any narrower than the power of the owners corporation to make by-laws. He noted (at [44]) by reference to the decision in Sydney Diagnostic Services Pty Ltd v Hamlena Pty Ltd (1991) 5 BPR 11,432 that “by-laws frequently interfere with the rights of property of an owner of a lot”, then observed:

Strata Schemes Management Act

106 His Honour also implied (at [48]) from s 50 that after the initial period an owners corporation may make a by-law in such a manner that a right is conferred, or an obligation imposed, on one or more but not all owners, or in respect of one or more but not all lots, if the by-law is otherwise authorised by s 47. He concluded that “[i]t is hard to see why that implication would not extend to authorising an owners corporation making a by-law under s 47 that conferred a right in respect of one lot and imposed a correlative obligation in respect of another lot.”

107 Finally the primary judge (at [50]) inferred that, but for the restrictions in s 49(1), a by-law could be made which would have the effect of doing any of the things which that section prohibits, an inference reinforced by Hamlena Pty Ltd v Sydney Endoscopy Centre Pty Ltd (1990) 5 BPR 11,436 where Young J (as his Honour then was) said of the equivalent provision in the Strata Titles Act 1973 (the “1973 Act”):

“S 58(6) prevents a by-law being made which would restrict the devolution of a lot. This subsection seems to me to envisage the possibility that were it not for its existence, there would be power within s 58 to pass a by-law limiting the right to assign a lot.”

178 In Re Ellenborough Park (at 164) Evershed MR said of the fourth condition:

whether, if and so far as effective, such rights would amount to rights of joint occupation or would substantially deprive the park owners of proprietorship or legal possession

179 The requirement that the right conferred by the grant must not amount to exclusive possession of the servient tenement was encapsulated by Lopes LJ in Reilly v Booth (1890) 44 Ch D 12 (at 26) as follows:

“The exclusive or unrestricted use of a piece of land, I take it, beyond all question passes the property or ownership in that land, and there is no easement known to the law which gives exclusive and unrestricted use of a piece of land. It is not an easement in such a case; it is property that passes.”

180 The same conclusion was reached in Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd [1971] HCA 9; (1971) 124 CLR 73 (at 91) by Windeyer J (with whom Barwick CJ agreed on this point).

181 There is a line of authority holding that the fourth condition is not satisfied where the right claimed is to store goods on another’s land.

182 In Copeland v Greenhalf the defendant and his father before him had carried on business as wheelwrights for fifty years or so. Their home and workshop adjoined a road and in part confronted a strip of land on the opposite side of the road, some 150 feet long and of a width varying from fifteen to thirty-five feet, which gave access from the road to an orchard. During the whole of the fifty years the defendant and his father had placed vehicles, wheels, and other articles on the land on the opposite side of the road to await repair or removal after repair. They had also from time to time carried out repairs to vehicles on the land. They had always left a way to permit access to and from the orchard from and to the road. On a claim by the plaintiff, the owner in fee simple of the orchard and the strip of land, for an injunction to restrain the defendant from continuing to place articles on the land, the defendant contended that he was entitled to an easement so to use the land by virtue of the Prescription Act, 1832, s 2.

183 Upjohn J (as his Lordship then was) held (at 812) that the right claimed by the defendant went “wholly outside any normal idea of an easement, that is, a right of the occupier of a dominant tenement over a servient tenement”. He continued:

This claim really amounts to a claim to a joint user of the land by the defendant

It is virtually a claim to possession, if necessary to the exclusion of the owner, or, at any rate, to a joint user

184 Brightman J followed Copeland in Grigsby v Melville and Another [1972] 1 WLR 1355, holding that an easement of unlimited storage within a confined space could not exist in law. It has been said that the major significance of Grigsby is “that it extends the principle of Copeland v Greenhalf beyond prescriptive easements to all easements, however acquired”: A J Bradbrook and M A Neave, Easements and Restrictive Covenants in Australia, (Second Edition, Butterworths, 2000, at [1.9]). This comment would appear also to support the authors’ observation (ibid) that there is no logical reason why a stricter test should apply to prescriptive easements than those created by express or implied grant: cf Mercantile General Life Reassurance Co v Permanent Trustee (1988) 4 BPR 9534.

185 There are differing views as to whether Copeland is inconsistent with the Court of Appeal’s decision in Wright v Macadam [1949] 2 KB 744 in which it was held that a permission given by the landlord of a flat to his tenant to use a coal shed on his property to store such coal as might be required for the domestic purposes of the flat was a right or easement recognised by law. Upjohn J did not refer to Wright. Bradbrook and Neave (at [1.9]) regard the decisions as inconsistent and point out, correctly, that Copeland has been preferred in Australia. Campbell J (as his Honour then was) was not persuaded that there was any inconsistency in Lolakis v Konitsas [2002] NSWSC 889; (2002) 11 BPR 20,499 (at [25]).

186 Bradbrook and Neave’s observation that Copeland has been preferred in Australia is based on King J’s decision in Harada v Registrar of Titles [1981] VR 743 which concerned the question whether an easement was created by a “notice to treat” in the following terms:

and will bind the owner not to build on the easement area and not to interfere with the use of the easement or grow trees or erect any structure thereon

187 King J held (at 752) that the fourth condition for the grant of an easement was not present. He said:

the restriction on the owner not to build on the easement area and not to erect any structure thereon goes much further than a prohibition of interference with the enjoyment by the SEC of its rights.

Copeland v Greenhalf

188 Copeland and Harada were followed in Clos Farming Estates Pty Ltd (Recs and Mgrs Apptd) (ACN 003 435 256) v Eastonand Another [2002] NSWCA 389; (2002) 11 BPR 20,605 (at [40], [42], [45] – [46]) (per Santow JA, Mason P and Beazley JA agreeing). Santow JA observed (at [45]) that in order to determine whether the fourth condition has been established, it is necessary to assess the degree to which the rights conferred interfere with the servient owner’s exclusive possession of the site. He added (at [46]) that the fact that “the rights conferred only touch part of the lot is insufficient to preclude the finding that the rights so vastly interfere with the servient owners’ rights, were they exercised, as to preclude them constituting an easement”.

189 The question whether a grant of rights over another’s land fails the fourth condition required for an easement is one of fact. In Pennant Hills Golf Club Ltd v Roads and Traffic Authority of New South Wales [1999] NSWCA 110; (1999) 9 BPR 17,011 for example, the respondent was granted the right to use the appellant’s land to secure underground rock anchors as part of the construction work for the M2 expressway. The effect of the grant prevented the appellant from making any changes to the design or topography of the golf course which intruded into that part of the land in which the rock anchors were to be embedded. The Court (Stein JA, Handley and Giles JJA agreeing) held (at [20]) that the grant did not “wholly” deprive the appellant of its property rights in the land, nor (at [22]) “purport to vest unlimited or unconstrained rights in the respondent…nor…give it any right of possession beyond that…necessary to house the rock anchors”. The Court did not refer to Harada.

190 As I have already said, by-law 20 confers exclusive use and enjoyment of the watercraft storage area on the respondents, leaving the appellant with no right to use that section of lot 2. A by-law which purports to have that effect is not an easement because it purports to confer rights of occupation on the respondents that substantially deprive the appellant of proprietorship.

191 In those circumstances by-law 20 does not satisfy the fourth condition in Re Ellenborough Park.

192 Mr Rayment’s alternative Anthony Hordern contention was that by-law 20 created a restrictive covenant which could only be created in accordance with s 88B. He advanced this argument with little enthusiasm. He did not articulate how a by-law which required the appellant to permit the respondents to store watercraft on her land came within the necessary conditions of a restrictive covenant, the first of which is that the covenant be negative in character: as to which see Marquess of Zetland v Driver [1939] Ch 1; Pirie v Registrar-General [1962] HCA 58; (1962) 109 CLR 619, the leading modern authorities on the Tulk v Moxhay doctrine (the genesis of the modern law of restrictive covenants), Forestview Nominees Pty Limited and Another v Perpetual Trustees WA Limited [1998] HCA 15; (1998) 193 CLR 154 (at [9]). In my opinion by-law 20 did not create a restrictive covenant which might have attracted the operation of s 88B.

193 For these reasons I would reject the Anthony Hordern argument. However the conclusion that by-law 20 did not create an easement because it failed the fourth Ellenborough Park condition, underline why it is invalid.

Orders

194 I propose the following orders:

1. Grant leave to appeal.

2. Appeal allowed with costs.

3. Set aside the orders of White J on 30 June 2006.

(a) Declare that by-law 20 in strata plan 67662 is made ultra vires and is of no force or effect;

(b) Order that the first and second respondents be restrained from storing watercraft on the land comprised in lot 2 of strata plan 67662.

(c) Order that the first and second respondents pay the appellant’s cost of the proceedings before White J.

195 CAMPBELL JA: The term “by-law” is an ancient expression in English law. Its antiquity can be gauged from the fact that its etymological origin is in the Danish word “by” (sometimes spelt “byr”), meaning a town. Thus, in etymological origin, a by-law is a law applicable only to a local community.

196 Harding, A Social History of English Law (Penguin Books, London, 1966) says that in the 13th century

"… the disputes of the peasantry, the bye-laws necessary for fruitful agriculture, the substance of daily life, were still matters for the landlord and were transacted in his manorial court." (p 70)

197 Such by-laws were at one stage customary, and not necessarily written. Stoljar, Groups and Entities (Australian National University Press, Canberra, 1973) records:

by

tun

‘plebiscitum ville’

198 The range of topics covered by by-laws was wide. Stoljar, op cit, page 21, gives as examples:

"For example, only those might be allowed to glean who were too young or too old to reap; or neighbours might be forbidden to carry off sheaves as it was difficult to say whether they had come by them "well and truly" or had got them "without leave". Some by-laws even deal with hired labour, specify a maximum wage etc., thus anticipating ‘in a remarkable way the Statute of Labourers of 1351’ …".

199 Stoljar gives other examples at p 20–21 of a medieval by-law requiring farm produce to be carted only by day and then "openly through the midst of the town and not secretly by back ways", and another by-law that dealt with

"a problem posed by an obdurate or unco-operative villager, one who would neither properly work his tenement nor ‘do any neighbourliness to his neighbours’."

200 Medieval guilds, when created by royal franchise, made their own by-laws. The by-laws of mediaeval guilds covered, according to Stoljar, op cit, page 26,

"… unfair practices such as overcharging, forestalling, including unfair competition among themselves; even to prevent guildsmen from acting as agents for outsiders…".

201 Likewise, when burgesses of towns began to seek royal charters of incorporation in the fifteenth century, the “… right to make by-laws … [was] eagerly sought by those applying for charters …" (Stoljar, op cit, page 33). (See also Harding, op cit, page 249. According to Walker, The Oxford Companion to Law (Oxford University Press, New York, 1980), entry "Bye-law", page 163, "A common-law corporation has implied power to make bye-laws incidental to and within the purposes of its constitution …".

202 Harding, op cit, page 229 sketches how by-laws came to be incorporated into a wider legal fabric:

"Statute was neither an independent, nor the earliest, form of legislation. But it came to control the other forms. The powers of rule-making it can now delegate to officials and bodies outside Parliament are the successors to the many independent modes of legislation in medieval England. The bye-laws of the manor, the regulations of the city companies and other corporations, the rules of the Common Law Courts – all these were only slowly brought under the surveillance of Parliament. The judgment of any court made a sort of law, and every considerable medieval baron had a court … This local law-making of medieval England was first brought under the control of the king in his council, as powers to be granted and censored by charter and letters-patent. So, in 1575, for the sake of quiet between the university and city of Oxford, ‘places necessary to be ordered always by the order and authority of the Privy Council’, the government had certain orders written into ‘the common book of the said University and the city’.”

203 When statute came to create bodies to carry out particular functions, and delegated powers to them, the pre-existing concept of the by-law was pressed into service. For example, the Companies Clauses Consolidation Act 1845 (Imp) permitted companies regulated by that Act to make by-laws, and made provision in section 127 for the manner of proof of those by-laws. The case law provides examples of by-laws made by railway companies (Motteram v Eastern Counties RailwayCompany (1859) 7 CB (NS) 58; 141 ER 735), and of by-laws made under the Public Health Act 1875 (Imp) (Andrews v Wirral Rural District Council [1916] 1 KB 863). See also R v Powell (1854) 3 E & B 377; 118 ER 1183; Johnson v Barnes (1873) LR 8 CP 527.

204 It is that ancient notion of a by-law that the New South Wales legislature chose to adopt, without definition or explanation, when first enacting legislation concerning strata titles in 1961: section 13 Conveyancing (Strata Titles) Act 1961. It has appeared in legislation governing strata titles ever since. Such legislation creates a statutory framework within which a type of local community can be created and administered. It is a type of community where co-ownership, and the physical proximity of the spaces that the owners are entitled to occupy, create the opportunity for both cooperation and conflict. It is a type of community that was new in 1961, though it had some analogies with the communities that had previously existed through the creation of home unit companies under the Companies Act, or allowing for individual occupation of apartments in a building through a tenancy in common scheme.

205 There is nothing in the notion of a by-law that, of itself, imposes any kind of limitation on the kind of regulation that might be adopted, beyond that it is for the regulation of the particular community to which it applies. Any limitation on the type of restriction or regulation that can be a by-law must arise from the statute that enables the by-laws to be created, or from the general framework of statute law, common law and equity within which that local community is created and administered.

206 The particular local community that was created under the strata plan in question in the present case involves only two lots of land in separate ownership. However, they are located in a part of Sydney where access to the water is a significant benefit to a lot of land. Nothing in the notion of a by-law prevented there being a by-law entitling the owner of the lot that was located away from the water frontage to store a boat within a defined area immediately adjacent to the waterfront but within the lot located on the water frontage. And, as Santow JA has demonstrated, nothing in the particular legislative framework that governs the strata plan in question detracts from the validity of the by-law that is the subject of this litigation.

207 Subject to one matter, I agree with the reasons of Santow JA, and with the orders he proposes. That one matter concerns whether the rights that by-law 20 conferred upon the respondents’ lot could have been validly created as an easement. In my view, it is not necessary to decide that question. Even if those rights could have been validly created as an easement, the reasoning of Santow JA explains why the Anthony Hordern principle would not suffice to make the by-law invalid. And if, as McColl JA has concluded, those rights could not have been created as an easement, no question would arise of inconsistency between section 88B Conveyancing Act 1919 and the provisions governing the creation of by-laws for strata schemes, and that provides a different reason why the Anthony Hordern principle does not have the effect of making the by-law invalid. I would say, however, that the rights conferred by by-law 20 on the owner of lot 1, concerning the watercraft storage area, are extensive, but not as extensive as an exclusive right of possession. The proprietor of lot 2 can still use that area to whatever extent is consistent with the proprietor of lot 1 using it to store a watercraft, at such times as the proprietor of lot 1 might want.

208 There are some additional matters that I should state to explain why I do not, with respect, agree with the reasoning of McColl JA. First, there are some provisions of the Strata Schemes (Freehold Development) Act 1973 that are not set out in either of the other judgments. Section 5 of that Act defines a "strata scheme" as meaning:

“(a) the manner of division under this Act, from time to time, of a parcel into lots or into lots and common property and the manner of the allocation under this Act, from time to time, of unit entitlements among the lots, and

(b) the rights and obligations, between themselves, of proprietors, other persons having proprietary interests in or occupying the lots and the body corporate, as conferred or imposed by this Act or by anything done under the authority of this Act and as in force from time to time.”

209 In spelling out the content of that definition, section 5 defines a "lot" as meaning:

“… one or more cubic spaces forming part of the parcel to which a strata scheme relates, the base of each such cubic space being designated as one lot or part of one lot on the floor plan forming part of the strata plan, a strata plan of subdivision or a strata plan of consolidation to which that strata scheme relates, being in each case cubic space the base of whose vertical boundaries is as delineated on a sheet of that floor plan and which has horizontal boundaries as ascertained under subsection (2), but does not include any structural cubic space unless that structural cubic space has boundaries described as prescribed and is described in that floor plan as part of a lot.”

210 It defines a "parcel" as meaning:

“(a) except as provided in paragraph (b), the land from time to time comprising the lots and common property the subject of a strata scheme, and

(b) in relation to a plan lodged for registration as a strata plan, the land comprised in that plan.”

211 It defines “common property” as meaning:

“… so much of a parcel as from time to time is not comprised in any lot.”

212 The effect of these definitions is that, once a strata scheme has been registered, the entirety of the legal rights in the land that has been made subject to the strata scheme are divided into either lots, or common property.

213 The drawings that are part of the strata plan in the present case divide the surface area of the land into two separate areas, lot 1 and lot 2. There is a minuscule amount of common property identified on that plan, comprising a wall that is a party wall between the carport available for use by lot 2, and the house and courtyard erected on lot 1. If one looks just at the drawings on the plan, it looks like the sort of plan that effects a subdivision of land that is not intended to create a strata scheme. The way in which this particular plan is able to create the "cubic spaces" that are essential for the existence of a "lot" in the Strata Schemes (Freehold Development) Act is by a note that provides "Lots 1 & 2 are limited in height and depth to 30m above and below the upper surface of their respective ground floors." The plan makes clear that, at the time of lodgment of the plan, there was already a residence constructed on each of lot 1 and lot 2 – no doubt it would be those residences that fixed the location of the "respective ground floors”. In so far as the land that had been made subject to the strata plan conferred rights in the airspace more than 30 m above the upper surface of the ground floors, and in the subterranean space more than 30 m below those floors, those rights would pass, upon registration of the strata plan, into the common property.

214 Thus, from the point of view of the rights likely to be of significance to an ordinary house occupier, this particular subdivision was little different to a subdivision into two freehold parcels on which freestanding houses were constructed. In the way in which it used the strata title legislation to achieve this functional end, it was a distinct oddity, and quite different to the situation with which the strata titles legislation is usually concerned, where the functional objective is to enable separate titles to be created to different parts of the one building. These are, it seems to me, relevant matters in deciding what count as "matters appropriate to the type of strata scheme concerned", within the meaning of section 43 Strata Schemes Management Act 1996.

215 Section 6 Strata Schemes (Freehold Development) provides:

Real Property Act 1900

216 The proprietary right of the registered proprietor in relation to a lot in a strata scheme is, thus, the right set out in section 42 Real Property Act (quoted in the judgment of Santow JA at [**52]). For the reasons given by Santow JA, the limitation that by-law 20 imposes upon what may be done with the appellant’s lot operates as either “estates and interests … recorded in that folio" or "entries … recorded in that folio", within the meaning of section 42. Thus, the proprietary right of the appellant in her lot is subject to by-law 20. Further, from the instant of its creation Lot 2 has been subject to by-law 20. To say that by-law 20 permits one lot proprietor to use another proprietor’s lot suggests that the by-law infringes proprietary rights – but the proprietary right of the owner of Lot 2 has always been subject to the right created by by-law 20. The by-law is no more an infringement on the proprietary rights of the owner of Lot 2 than is the right of the owner of a dominant tenement to carry out on the land of another rights that have been created by an easement.

217 It is not necessary, in the present case, to decide whether it would be open to an owners corporation to resolve to adopt a by-law like by-law 20 after the creation of the lots in the strata plan. While the trial judge drew some comfort from his view that it would be possible for an owners corporation to pass such a resolution, the rest of his reasoning can stand without that part.

218 I am not prepared to conclude that by-law 20 does not operate for the benefit of the strata scheme as a whole. The strata plan is one that enables two houses and associated facilities to be separately owned on land where formerly only one land title existed. It arranges the land so that both lots can have car parking immediately adjacent to the street, and, through by-law 20, also makes provision for both lots to have boat parking immediately adjacent to the water. In my view, arranging the land use in that way can be seen as being for the benefit of both lots. Including by-law 20 in the strata plan as registered was part of the developer making available to potential purchasers the advantage of both car and boat parking, for a dwelling constructed on a smaller parcel of land.

219 I do not doubt the principle that general words should not be construed in their full generality if there is a context, such as the policy of the Act in which they appear, that is not consistent with giving the words as wide a meaning as they might have outside that context. However, I do not, with respect, find a general policy, in the various pieces of legislation that govern strata titles, that is inconsistent with according to the words "matters appropriate to the type of strata scheme concerned" in section 43(1) a meaning sufficiently wide to permit by-law 20 to be validly enacted. I do not regard the model by-laws as limiting by implication the kinds of topics with which a by-law can validly deal, when section 8(4B) and (4C) Strata Schemes (Freehold Development) Act specifically contemplates that by-laws different or supplementary to the model by-laws might be adopted. In the form they had at the date of registration of this strata plan (11 April 2002) they provided:

“(4B) A plan intended to be registered as a strata plan must indicate in the relevant panel of the approved form:

Strata Schemes Management Act 1996

(b) that other specified by-laws are proposed to be adopted for the scheme.

Strata Schemes Management Act 1996

Real Property Act 1900

220 As mentioned earlier, I agree with the orders proposed by Santow JA.

********** 1

Citations

White v Betalli [2007] NSWCA 243

Most Recent Citation

Cases Citing This Decision

38

Registrar-General of New South Wales v JEA Holdings (Aust) Pty Ltd [2015] NSWCA 74

Casuarina Rec Club Pty Limited v The Owners - Strata Plan 77971 [2011] NSWCA 159

The Owners Strata Plan No 2661 v Selkirk [2024] NSWSC 760

Cases Cited

24

Statutory Material Cited

13

Anthony Hordern & Sons Ltd v Amalgamated Clothing And Allied Trades Union of Australia [1932] HCA 9

Clos Farming Estates Pty Ltd v Easton [2002] NSWCA 389

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CITATION:	White v Betalli & Anor [2007] NSWCA 243
HEARING DATE(S):	26 April 2007
JUDGMENT DATE:	14 September 2007
JUDGMENT OF:	Santow JA at 1; McColl JA at 77; Campbell JA at 195
DECISION:	1. Leave to appeal granted; 2. Appeal dismissed; 3. Appellant to pay the respondent’s costs.
CATCHWORDS:	REAL PROPERTY – Strata and related titles and occupancy – validity of special by-law created pursuant to s 43 Strata Schemes Management Act 1996 - special by-laws created right in favour of one lot proprietor to use or occupy part of lot owned by another to store small watercraft - STATUTES - Statutory Construction - expressum facit cessare tacitum – whether only available source of power to create right purportedly created by special by-law was s 88B, Conveyancing Act 1919 - STRATA TITLES AND RELATED TITLES AND OCCUPANCY – Strata Schemes Management Act 1996 s 43 – whether special by-law “appropriate to the type of strata scheme concerned” or inconsistent with Management Act or any other Act or law - REAL PROPERTY – land titles – registration – whether interest sufficiently recorded on the register if folio states the registration of the dealing creating it and identifies the interest.
LEGISLATION CITED:	Commonwealth Conciliation & Arbitration Act 1904 Conveyancing (Strata Titles) Act 1961 Conveyancing Act 1919 Interpretation Act 1987 Real Property Act 1900 Strata Schemes (Freehold Development) Act 1973 Strata Schemes Management (Miscellaneous Amendments) Act 1996 Strata Schemes Management Act 1996 Strata Titles Act 1973 Building Units and Group Titles Act 1980 (Qld) Companies Clauses Consolidation Act 1845 (Imp) Prescription Act 1832 (Imp) Public Health Act 1875 (Imp)
CASES CITED:	Andrews v Wirral Rural District Council [1916] 1 KB 863 Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia [1932] HCA 9; (1932) 47 CLR 1 Bursill Enterprises Pty Ltd v Berger Bros Trading Pty Ltd [1971] HCA 9; (1971) 124 CLR 73 Clissold v Perry [1904] HCA 12; (1904) 1 CLR 363 Clos Farming Estates Pty Ltd (Recs and Mgrs Apptd)(ACN 003 435 256) v Easton and Another [2002] NSWCA 389; (2002) 11 BPR 20,605 Copeland v Greenhalf [1952] Ch 488 Deputy Commissioner of Taxation v Clark [2003] NSWCA 91; (2003) 57 NSWLR 113 Deputy Commissioner of Taxation v Dick [2007] NSWCA 190 Forestview Nominees Pty Limited and Anor v Perpetual Trustees WA Limited [1998] HCA 15; (1998) 193 CLR 154 Grigsby v Melville & Anor [1972] 1 WLR 1355 Hamlena Pty Ltd v Sydney Endoscopy Centre Pty Ltd (1990) 5 BPR 11,436 Harada v Registrar of Titles [1981] VR 743 Humphries v Proprietors Surfers Palms North Group Titles Plan 1955 [1994] HCA 21; (1994) 179 CLR 597 Johnson v Barnes (1873) LR 8 CP 527 Lolakis v Konitsas [2002] NSWSC 889; (2002) 11 BPR 20,499 Marquess of Zetland v Driver [1939] Ch 1 Mercantile General Life Reassurance Co v Permanent Trustee (1988) 4 BPR 9534 Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50; (2006) 81 ALJR 1 Motteram v Eastern Counties Railway Company (1859) 7 CB (NS) 58; 141 ER 735 Mulwala & District Services Club v Owners Strata Plan 37724 [2000] NSWSC 1040; (2000) 50 NSWLR 458 Pennant Hills Golf Club Ltd v Roads and Traffic Authority of New South Wales [1999] NSWCA 110; (1999) 9 BPR 17,011 Pirie v Registrar-General [1962] HCA 58; (1962) 109 CLR 619 Puflett v Proprietors of Strata Plan No 121 (1987) 17 NSWLR 372 Quazi v Quazi [1980] AC 744 R v Powell (1854) 3 E & B 377; 118 ER 1183 R v Young [1999] NSWCCA 166; (1999) 46 NSWLR 681 Re Ellenborough Park [1956] Ch 131 Reilly v Booth (1890) 44 Ch D 12 Ridis v Strata Plan 10308 [2005] NSWCA 246; (2005) 63 NSWLR 449 Sydney Diagnostic Services Pty Ltd v Hamlena Pty Ltd (1991) 5 BPR 11,432 The Owners of Strata Plan No 3397 v Tate [2007] NSWCA 207 Tittman v Traill (1957) 74 WN (NSW) 284 White v Betalli & 1 Or [2006] NSWSC 537; (2006) 66 NSWLR 690 Wilcox, Judge of the Federal Court, Re; Ex parte Venture Industries Pty Ltd (1996) 66 FCR 511 Wilson & Anor v Meudon Pty Ltd & Anor [2005] NSWCA 448 Woollahra Municipal Council v Local Government Appeals Tribunal & Renwyn Pty Ltd [1975] 2 NSWLR 594 Wright v Macadam [1949] 2 KB 744
PARTIES:	Lynda Margaret White - Claimant Christopher Nadir Betalli - First Opponent Nicole Lee Puckeridge - Second Opponent
FILE NUMBER(S):	CA 40447 of 2006
COUNSEL:	B W Rayment QC with R W Tregenza - Claimant P W J Gray SC with P E Koroknay - Opponents
SOLICITORS:	Andreones Pty Ltd - Claimant David Le Page - Opponents
LOWER COURT JURISDICTION:	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S):	SC 4772 of 2005
LOWER COURT JUDICIAL OFFICER:	White J
LOWER COURT DATE OF DECISION:	30 June 2006
LOWER COURT MEDIUM NEUTRAL CITATION:	[2006] NSWSC 537