Zinc Port Melbourne Pty Ltd v Owners Corporation 1-4 Plan 22961
[2012] VCC 18
•9 February 2012
| IN THE COUNTY COURT OF VICTORIA | Revised (Not) Restricted |
AT MELBOURNE
COMMERCIAL LIST
GENERAL DIVISION
Case No. CI-10-06299
| ZINC PORT MELBOURNE PTY LTD & ANOR | Plaintiffs |
| v | |
| OWNERS CORPORATION 1-4 PLAN 22961 & ORS | Defendants |
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JUDGE: | HIS HONOUR JUDGE ANDERSON | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 19 & 23 January 2012 | |
DATE OF JUDGMENT: | 9 February 2012 | |
CASE MAY BE CITED AS: | Zinc Port Melbourne Pty Ltd & Anor v Owners Corporation 1-4 Plan 22961 & Ors | |
MEDIUM NEUTRAL CITATION: | [2012] VCC 18 | |
REASONS FOR JUDGMENT
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Catchwords: Practice and procedure – Application to deliver second further amended statement of claim – Adequacy of pleading and particulars in draft document.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr D.P. Bongiorno | Strongman & Crouch |
For the First to Fifth Defendants | Mr N. Jones | HWL Ebsworth Lawyers |
| For the First and Third Third Parties | Mr A. Ritchie | Banks & Associates Lawyers |
HIS HONOUR:
1 On 29 September 2011, I ordered that the plaintiffs’ further amended statement of claim be struck out. The plaintiff was given the opportunity to deliver a proposed second further amended statement of claim. The plaintiff seeks leave to file that document. The first to fifth defendants object to a number of paragraphs in the proposed pleading. They submit that certain allegations are inadequately particularised or the pleaded cause of action cannot be sustained.
2 The first plaintiff (Zinc) is the developer of land at 117-119 Rouse Street, Port Melbourne. The first defendant (Owners Corporation) is the manager of the common property of the adjoining Sandridge Bay Towers development at 9 Beach Street, Port Melbourne. The properties share a common boundary.
3 The plaintiffs allege that in about September to November 2009, Zinc and the Owners Corporation entered into an agreement whereby the Owners Corporation granted Zinc long-term occupation over a narrow strip of land forming part of the common property of 9 Beach Street, adjacent to the boundary of the Zinc property. In return, Zinc performed certain works on the common property.
4 The agreement is alleged to have been made by the sixth and seventh defendants on behalf of the Owners Corporation. The second to fifth defendants (members of the committee of the Owners Corporation) were alleged to have wrongfully reneged upon the agreement. The sixth defendant (Munz), a lawyer, was the Owners Corporation secretary and honorary manager. The seventh defendant (Newman) was the Owners Corporation grounds manager.
5 The plaintiffs no longer wish to enforce the agreement, instead, they claim compensation for the loss of use of the land allegedly agreed to be transferred, and the cost of works performed on the common property. The plaintiffs rely upon causes of action in contract and misleading and deceptive and unconscionable conduct in breach of the Trade Practices Act and the Fair Trading Act.
6 A critical issue in the proceeding is the authority of Munz and Newman to contract on behalf of, or otherwise for their conduct to give rise to liability, for the Owners Corporation. The Owners Corporation was established pursuant to the Owners Corporation Act (Vic) and the Subdivision Act 1988 (Vic). The matter is listed for trial on 18 April 2012. A previous trial date of 29 November 2011 was vacated because of the difficulties the plaintiffs had in formulating their statement of claim.
7 Counsel for the plaintiffs and the first to fifth defendants have discussed the issues raised by the proposed amended pleading and helpfully confined the issues debated before me. There is no argument that the contractual claim should proceed to trial. The contested issues relate to the trade practices and fair trading claims. Before dealing with those specific matters, it is necessary to set out the contents of certain documents the plaintiffs have submitted in evidence which are exhibited to an affidavit of Milica Petronijevic sworn 23 January 2012.
8 The relevant facts disclosed were as follows:
a.On 14 August 2006, the Owners Corporation appointed Munz as the single point of contact between Zinc and the Owners Corporation in ongoing dealings concerning issues raised by objectors from the Owners Corporation relating to the town planning processes for Zinc’s development of the property at 117-119 Rouse Street.
b.On 14 April 2008, at a meeting of Body Corporate No. 22961-BC1 (one of the four body corporates comprising the Owners Corporation), the chairman publicly acknowledged, “the considerable time and effort by Mr Munz in running Body Corporate 1 over many years … at no cost to BC1 members”.
c.On 21 July 2008, at a meeting of the committee of Body Corporate No. 22961 (Body Corporate No. 1), the minutes noted:
i.“Mr Munz was elected secretary and honorary manager. This will involve him continuing to perform administrative and accounting functions free of charge to the Body Corporate”.
ii“Michael Newman, Jack McLeish [the chairman of Body Corporate 1] and Jonathan Munz will liaise with the Zinc developers to ensure that the proposed fence is properly designed and built and in relation to other planning and design issues”.
d.On or about 22 September 2009, Newman countersigned a letter to him from Zinc bearing that date. The letter noted a number of items of work Zinc “have agreed to complete due to the ongoing works on the Zinc apartments”.The list included, “8. Land ceded by SBT [Sandridge Bay Towers] to Richard O’Brien to proceed”. Mr O’Brien was a director of each of the plaintiffs and the occupier of Townhouse 6, 117 Rouse Street. The letter also referred to the erection of “new brushed fences”. On about 10 November 2009, Newman signed a plan at the direction of Munz. The plan set out the location of the proposed dividing fence between the properties.
e.In about mid-December 2009 (as recorded in a later report by the Owners Corporation managers), “a new brush fence between the new Zinc development and SBT was being erected on SBT land, rather than on the boundary”. It was noted that, “Committee members were informed by Zinc’s project manager that this work was undertaken as a result of a verbal agreement with the then secretary, Jonathan Munz”.The report asserted that, “At no time did Mr Munz tell anyone on the committee about the details of the ‘deal’ he had arranged. Although he was authorised in the 2008 AGM to negotiate the cost and type of dividing fence, he had no authority to even discuss any arrangement to permit use of the land”.
f.Legal advice was obtained by the Owners Corporation in late January 2010 that the Owners Corporation “was not bound by any representations that may or may not have been made by Mr Munz and that the Owners Corporation cannot dispose of common property without a unanimous resolution”.
g.On 25 March 2010, the committee of the Owners Corporation resolved that the Owners Corporation’s managers “be immediately instructed to engage a fencing contractor to remove those sections of the fence on SBT land and re-erect a matching brush fence on the SBT side of the boundary line.”This work was apparently later carried out.
9 The issues remaining in dispute between the parties concerning the proposed second further amended statement of claim were as follows:
a.para. 28 – whether the alleged representation that the Owners Corporation would grant Zinc long-term occupation over part of the Owners Corporation common property, “was made in trade or commerce”.
b.para. 32 – whether the particulars are sufficient and satisfactory in so far as it is alleged that in relation to the representation, the Owners Corporation “aided, abetted, counselled or procured Munz”, “was directly and knowingly concerned in or a party to conduct” or “engaged in conduct which is unconscionable”.
c. para. 35 – the adequacy of the particulars of the allegation that, “From in or around November 2009, each of McLeish, Sutton, Nelson and Lethlean [the committee members sued as the second to fifth defendants] were aware of the agreement and it’s terms”.
d. Paras. 38-41 – whether the allegations of accessorial liability on the part of the second to fifth defendants can be maintained if the allegations of “knowledge” in paragraph 35 are unsatisfactory.
e.Para. 42 – whether the authority of Munz to deal with the plaintiffs on behalf of the Owners Corporation is adequately pleaded.
f.Para. 45 – whether the authority of Newman to deal with the plaintiffs on behalf of the Owners Corporation is adequately pleaded.
10 I consider that it is appropriate to deal with these issues briefly, as I have determined that apart from the pleadings involving the committee members (the second to fifth defendants), the plaintiffs should otherwise be permitted to proceed to trial on 18 April 2012 with an amended pleading as proposed. In summary, the reasons for my decision are as follows:
a.The issue of whether the alleged representation was “made in trade or commerce” depends on matters of statutory interpretation and findings of fact. Both the plaintiffs and the defendants rely upon the duties of an owners corporation prescribed by the Owners Corporation Act 2006. The dealings between the parties go back to the town planning processes in 2006. I consider these matters are better left for determination at trial.
b.The extent of any authority of Munz and Newman to act on behalf of the Owners Corporation must be determined at trial in relation to the contractual claim. In these circumstances, I consider that the similar matters alleged in paragraphs 32, 42 and 45 should also be left for determination at trial.
c.The only paragraphs of the proposed pleading dealing with the committee members (the second to fifth defendants), are paragraphs 35-41. In paragraph 35 it is alleged that, “In or around November 2009” each of the committee members “were aware of the agreement and it’s terms”. The particulars set out in paras. (i) to (ix) detail various matters which it is alleged the committee members knew, “because of their position as committee members, their presence at meetings of the Owners Corporation committee and their access to the Owners Corporation’s corporate records”. Plaintiffs’ counsel, Mr Bongiorno, when asked for details of the matters relied upon, filed the affidavit of Milica Petronijevic sworn 23 January 2012. There is, however, no document which evidences knowledge of the committee members of the relevant matters alleged, in about November 2009.
d.In mid-December, the new brush fence was erected by Zinc and the committee members apparently became aware that a verbal agreement was alleged between Munz and Zinc. The committee members are sued because of their participation in the Owners Corporation decision on 25 March 2010 to instruct the Owners Corporation managers to engage a fencing contractor to remove the sections of the fence which encroached on the common property. If that participation had been with knowledge of the matters alleged in paragraph 35, there might have been some basis for also allowing this allegation to proceed at trial.
However, the documents introduced into evidence by the plaintiffs clearly establish that, until at least mid-December (well after the alleged agreement was said to have been entered into), the committee members had no knowledge of any discussions between Munz and Zinc, the letter dated 22 September 2009 or the plans signed by Newman on 10 November 2009.
In late January 2010, the Owners Corporation had legal advice that Munz’s purported disposal of common property was ineffective. The Owners Corporation decision to take steps to remove the encroaching fence was made in accordance with that advice.
In the circumstances, the claims against the committee members of inducement to breach contract or accessorial liability in the alleged contravention of the Trade Practices Act or the Fair Trading Act have no basis and should not proceed to trial.
11 Accordingly, the following orders would seem appropriate:
a. By 4:00 pm on a date to be nominated in February 2012, the plaintiffs have leave to file and serve a second further amended statement of claim in the form of a document being Exhibit MP1 to the affidavit of Milica Petronijevic sworn 21 December 2011, with the omission of paragraphs 35-41.
b. Judgment for the second to fifth defendants against the plaintiffs.
12 I will hear counsel further on the appropriate form of orders and in relation to the other issues raised by the application.
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Certificate
I certify that these 7 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 9 February 2012.
Dated: 9 February 2012
Caroline Dawes
Associate to His Honour Judge Anderson
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