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  4. McGrath v The Body Corporate for "The Surfers Manhattan" Cts 7230 - [2002] QDC 253

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McGrath v The Body Corporate for "The Surfers Manhattan" Cts 7230[2002] QDC 253

McGrath v The Body Corporate for "The Surfers Manhattan" Cts 7230[2002] QDC 253

DISTRICT COURT OF QUEENSLAND

CITATION:

McGrath v The Body Corporate for “The Surfers Manhattan” Cts 7230 [2002] QDC 253

PARTIES:

ROY FRANCIS McGRATH

First Appellant

And

CECILY JOAN McGRATH

Second Appellant

v

THE BODY CORPORATE FOR “THE SURFERS MANHATTAN” CTS 7230

Respondent

FILE NO:

Appeal D 78 of 2002

DIVISION:

District Court

PROCEEDING:

Appeal from Adjudicator

ORIGINATING COURT:

Brisbane Registry

DELIVERED ON:

29 August 2002

DELIVERED AT:

Brisbane

HEARING DATE:

8 August 2002

JUDGE:

Judge Robin QC

ORDER:

Appeal allowed

CATCHWORDS:

Appeal to District Court under Body Corporate and Community Management Act 1997 against adjudicator’s decision – whether issue estoppels arose from previous decision by another adjudicator – whether that adjudicator had jurisdiction – Body Corporate acknowledged for consideration it did not require access through a lot, subsequently failed on application to adjudicator for access – lot owner then applied to adjudicator to prevent renewed pursuit of access by body corporate – body corporate held estopped by its acknowledgement – s 264 of Act did not apply retrospectively to deny effect to an agreement made by the parties in 1994.

Body Corporate and Community Management Act 1997 - s 62, s 125, s 223, s 237, s 264.

Stilk v Myrick (1809) 2 Camp 317; 170 ER 1168

Tully v The Proprietors “The Nelson Body Corporate” (2000) QDC 031

Beaumont v Yeomans (1934) SR (NSW) 562; 51 WN (NSW) 185

Maxwell v Murphy (1957) 96 CLR 261

State Rail Authority of New South Wales v Consumer Claims Tribunal (1988) 14 NSWLR 473

Lambidis v Commissioner of Police (1995) 37 NSWLR 320

Administration of Papua New Guinea v Darra Guba (1972) 130 CLR 353

McNair v Mayne Nickless Ltd EC 9700785, Supreme Court of Western Australia, Full Court 37 of 1996, 19 March 1997

R v Trade Practices Tribunal; ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361

Clout v Klein (2001) QSC 401

Blair v Curran (1939) 62 CLR 464

EGRI v DRG Australia (Ltd) (1988) 19 NSWLR 600

Sattell v The Proprietors of Be’bees Tropical Apartments BUP No 71593 (2000) QCA 496

Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387

COUNSEL:

Mr J E Gallagher QC & Mr R J Anderson for the appellants

Ms H Bowskill instructed by for the respondent

SOLICITORS:

Deacons for the appellants

Malleson Stephen Jaques for the respondent

  1. [1]
    This is an appeal by the McGraths under s 237 of the Body Corporate and Community Management Act 1997 (the Act) against the dismissal by an adjudicator on 28 November 2001 of their application as owners of lot 44 (which is on level 29 in the relevant building) for orders as set out in paragraph [18] below. The orders made were as follows:

“I hereby order that the application by Roy Francis McGrath and Cecil Joan McGrath, the owners of lot 44, for several orders relating to the issue of access to the roof of the building through their lot, and specifically the EGM which was notified to be held on 22 August 2001, is dismissed.

I further order that each owner of a lot on levels 28 and 29 of The Surfers Manhattan (the owners) shall have the right, individually, to submit a statement to be included with the notice of any future meeting which includes a motion to the effect of motion 2 as proposed at the EGM which was to be held on 22 August 2001, wherein the owners are entitled to set out their position in respect of the issue of access through their respective lot, and to comment on any other aspect they consider relevant to this issue, including, if they consider it appropriate, the actions of the committee in regard to the issue.

I further order that –

  • The statement shall be type written, be one A4 standard foolscap page in length, and the print size is to be no less than 12 point;
  • The owners shall be required to provide the statement to the body corporate secretary (for inclusion in the notice) within seven (7) days of each owner receiving notification by the committee of its intention to convene a further EGM to consider the issue, or alternatively, that it proposes to re-consider the issue at the AGM of the body corporate;
  • Provision of a copy of the statement to the secretary of the body corporate within the stipulated period will be sufficient to satisfy the requirements of this order for the statement to be included in the notice;
  • The body corporate shall include such statement or statements to the body of the notice of meeting immediately after the relevant motion (to the effect of motion 2 proposed at the EGM which was to be held on 22 August 2001), and before any other motion.

I further order that a copy of this Order and my Statement of Reasons shall also be included with each notice of meeting sent to all owners.

I further order that the body corporate shall immediately send a copy of this order and statement of reasons to the owners of all lots located on levels 28 and 29 of the building, excepting the applicant.”

The Problem in the Building

  1. [2]
    The relief sought reflects the difficult situation the Body Corporate finds itself in in consequence of an amazing deficiency in the design of the building. It seems that lift foyers in levels up to 14 are common property, but in higher levels are part of privately owned lots, there being no more than one per floor. For various purposes, including maintenance of the lifts, access to the roof is required. That is available by stairs. Unsurprisingly, the Body Corporate has found it difficult to locate contractors willing to provide necessary services on the basis that their personnel are required to walk from level 14 to the roof, although it has (at a price) been able to make arrangements of limited duration which have that effect.
  1. [3]
    The appellants purchased their lot in the middle of 1992, and for some months were engaged in fitting it out to suit their requirements. Even before they moved in they became aware that the building manager, and “servicemen and workmen” had keys to the lot and were entering it more or less at will. A statutory declaration prepared for them to sign states:

“The only way to obtain access to the roof with all of its services was through not only via the lobby on level 29 but necessitated entry into our living area to use our internal stairs to access: Mechanical Ventilation, Lift Motor Room, TV Antenna, Sky Channel, Auto Pressurisation Pumps and Water Tank. The Lift unlocking device was also located on level 29 – all lift servicing had to be carried out in the foyer which is part of our lot.”

  1. [4]
    A claim was made of a threat by the then Chairman of the Body Corporate on 26 November 1992 to deny them use of the lifts to move their furniture in “unless we agreed to give carte blanche access to our lot at any time.” It seems there may have been some issue whether the McGraths’ vendor advised them before they purchased of the problem of access being taken through their unit, but the vendor(s) provided the McGraths with a letter referring to “no recollection of pointing out the difficulties of access to the penthouse to you.”

The Parties’ Agreement

  1. [5]
    Negotiations ensued, which were rather protracted. The McGraths paid $3,270 for “re-keying” or some other means of altering the lift-well access of the lifts and a further $5,000, being half (or thereabouts) of work done in the building to create new doorways and the like so that alternative access to the roof to that through lot 44 was available. The negotiations culminated in a flurry of correspondence between solicitors:

9 June 1994 - Mr Muir (for the Body Corporate) writes:

“This appears now to conclude negotiations”.

17 June 1994 – Mrs Cull of Fitz-Walter Cull & Walker (for the McGraths) writes:

“We are pleased to advise that this matter is now resolved on the following basis:-

  1. Two full sized fire doors will be constructed to give access from the common property fire stairwells to the roof on the northern and southern sides;
  1. Quotations include the cost of access to the water tank;
  1. Our clients will meet one half of the cost of the two new access doors and access to the water tank to a maximum amount of $5,000.00;
  1. The Body Corporate has given consent to our clients to construct and our clients will pay the cost of a screen conforming to the requirements of a drawing provided by Jamboree Enterprises Pty Ltd dated 14th June, 1994;
  1. The Body Corporate will water proof the north door from our clients’ lot to the roof at its cost, and will construct an overhang to provide weather protection. The southern door will remain as is.
  1. All works will be expedited.

Thank you for your assistance in this matter. Please confirm that agreement is reached on the basis here set out. We understand work can commence on Monday 20 June, 1994.”

23 June 1994 - a follow-up letter requests “confirmation today”.

27 June 1994 - Mr Muir writes a reply to that letter noting his instructions that all matters have been resolved.

28 June 1994 - 1.58pm, Fitz-Walter Cull & Walker again request written confirmation.

28 June 1994 - 2.32pm, Mr Muir faxes his letter dated 27 June 1994.

  1. [6]
    On 9 September 1994 the Body Corporate wrote to the McGraths advising work had been completed, at a total cost exceeding $10,000, and requesting them to forward their cheque for $5,000. The letter concluded:

“Your co-operation in having this matter finalised is very much appreciated by the Body Corporate.”

  1. [7]
    I am uncertain whether that was intended to refer to past co-operation, or whether it was anticipating future co-operation. If it matters, the court’s assessment is that the McGraths were entitled to expect appreciation of their past co-operation. On 23 September 1994 they wrote to Mrs Cull enclosing their cheque but indicating their requirement of “a discharge and guarantee from the Body Corporate acknowledging that now … there would be no more entry by the Body Corporate to our Lot 44 to maintain the building services”. The cheque was to be handed over “as soon as the agreement has been signed … as settlement of our agreement with the Body Corporate.”  On 10 October 1994 Mrs Cull wrote to the Body Corporate (with a copy to its solicitors) requesting a signature of an enclosed “acknowledgement”. It appears to have been signed, dated and returned under cover of the Body Corporate’s letter on 13 October 1994, without demur. Four days later, the letter went off. The acknowledgement is:

“R.F. & C.J. McGRATH

Lot 44

“Surfers Manhattan” BUP 8044

SURFERS PARADISE   4217

  1. The Body Corporate acknowledges that access is no longer required through Lot 44 to maintain building services located on the common property roof.
  1. The Body Corporate acknowledges that the security screen erected on the common property roof over Lot 44 has been erected with the approval and authority of the Body Corporate.

Dated the 13th day of October, 1994.

……signed…………………………..

For and on behalf of

“Surfers Manhattan” BUP 8044.”

  1. [8]
    Miss Bowskill, who argued the appeal skilfully for the respondent Body Corporate, argued that this document formed no part of the parties’ agreement, and could not stand on its own, for lack of consideration. Traditionally, performance of one’s existing contractual duties has been regarded as no consideration: Stilk v Myrick (1809) 2 Camp 317; 170 ER 1168, but there has been a considerable amount of refinement of the rigour of any such rule. See for example Cheshire and Fifoot’s Law of Contract (7th  Australian edition) 166 ff. Very early in the negotiations, notably at a meeting held on 11 January 1993, it was apparently contemplated that a formal agreement should be executed, the minutes or note of a meeting stating:

“Once accepted by all parties, this agreement is to be reduced to writing at the cost of the Body Corporate and is to take effect forthwith.”

While the engagement of solicitors on both sides led the parties, apparently, to lose their enthusiasm for a formal document, so that the terms of the agreement must be elicited from the solicitors’ communications, I am unable to regard the requirement of the “acknowledgement” as a new demand by the McGraths. In my view it did no more than spell out what was always implicit. I think it would be unrealistic to regard the McGraths as having expended a substantial amount of money on the basis of no more than a hope that altered facilities in the building might lead to a reduction in unwelcome intrusions by service personnel inside their lot. (I interpolate that the lift foyer area is very much part and parcel of their home there; it is furnished with lounge chairs; doors off it are, in some cases at least, of glass, and do not offer great security.)  The outcome which the McGraths were always negotiating for was expressed in Mr Muir’s letter of 19 May, 1994, which advocated a particular solution (the $10,000 one) “as it would mean that all of the common property can then be accessed without any disturbance to your clients.”

The Body Corporate’s Application to the Commissioner for Access

  1. [9]
    In practical terms, the new arrangements expensively put in place depended on access which had hitherto been gained through lot 44 being gained instead by the lot immediately below which, it seems, was owned by a foreign gentleman who never occupied it. Upon the sale of his lot, the new owner had similar objections to repeated intrusions on her privacy to those the McGraths used to have.
  1. [10]
    By a “resolution passed outside a committee meeting” on 14 September 2000, the committee of the Body Corporate resolved to instruct solicitors to apply to the Commissioner under the Act to clarify the rights of access of the Body Corporate’s contractors in respect of the roof area. An Application to Resolve a Dispute was filed on 20 October 2000. The orders sought were:

“1. That pursuant to section 62 of the Body Corporate and Committee Management Act 1997 the Body Corporate be granted an easement for access over lot 44 for the purposes of maintaining utility infrastructure and utility services to the common property.

  1. The Body Corporate be granted access across that easement except in cases of emergency, by giving 24 hours notice in writing to the lot owner, or otherwise by agreement.
  1. Any further orders which to the Adjudicator seem appropriate.”
  1. [11]
    The supporting grounds included the following:

“1. The Body Corporate seeks an order pursuant to section 62 of the Body Corporate and Committee Management Act 1997 (BCCM) that it be granted an easement for access over lot 44 of the building known as The Surfers Manhattan located at Old Burleigh Road, Surfers Paradise.

  1. Pursuant to section 62(1) an easement:

“Exists in favour of Common Property and against the lots for supplying utility services to the Common Property and establishing and maintaining utility infrastructure reasonably necessary for supplying utility services to the Common Property.”

  1. Clause 4 of the Maintenance Contract between the Body Corporate and Kone Elevators relevantly provides that the Body Corporate shall:

 (a)  Comply with all statutory and local authority legislation, regulations and codes including the Standards Associations of Australia codes; and

 (b) Permit our employees and agents access to the equipment and associated landings, lobbies and motor rooms for the fulfilment of this contract.

  1. Furthermore, it is a requirement of the 1997 Standards Associations Lift Code AS1735.2 that:

“Unrestricted access shall be provided by the most direct route possible between the machine room and the nearest floor served by the lift.”

  1. The nearest floor serviced by the lift allowing access to the machine rooms, is level 29.
  1. The construction of the building is such that level 29 does not have a common property lobby area. The Lifts open directly into the lot itself. A copy of the relevant BUP is exhibited for your reference.
  1. An easement for access is necessary for the Body Corporate to complete proper service of the utility infrastructure and also maintain its contractual obligations.”
  1. [12]
    The McGraths’ response is set out in their solicitor’s letter of 14 December 2000. It contained the following summary:

“1. There is no Jurisdiction to make the order sought as:

  1. (1)
    There is no dispute;
  1. (2)
    The application made is not in accordance with the resolution of the Body Corporate;
  1. (3)
    There is no jurisdiction to grant an easement.
  1. The type of easement sought by the applicant is not one contemplated by S. 62
  1. (1)
    As it is for access; and
  1. (2)
    It does not relate to the establishment or maintenance of any infrastructure within Lot  44 – but rather access from one part of common property to another.
  1. The order sought is in conflict with the right of entry provisions in S. 125.
  1. The imposition of the easement rights sought would be unreasonable and contrary to S. 62(2) when:
  1. (3)
    There is already an agreement in place which gives adequate access;
  1. (4)
    The arrangements have been working satisfactorily for many years and are within any legislative requirement for safety;
  1. (5)
    There are practical and affordable options for structural changes to the building which would avoid any unreasonable burden on a single proprietor, and
  1. (6)
    The Respondents made careful enquiry prior to purchasing their unit and did not discover, nor could they reasonably have discovered, any agreement or arrangement concerning access through their unit. If there is to be a burden upon a single Lot it should be placed on Lot 43 – where access has satisfactorily utilised for many years and where the new owners knew, or ought to have known, of the impediment.
  1. An estoppel operates in favour of the Respondents.”

It is clear from the letter (which I infer the Body Corporate had) that the estoppel set up was based on the 1994 agreement reached through the solicitors. As to s 125 (which the Body Corporate claims to be relying on now, and not to have relied on in the year 2000, in the context of a new estoppel issue), the letter said the following:

“5. Right of entry – inconsistent with Act

The body corporate seeks an order that it be “granted access across that easement except in cases of emergency by giving 24 hours notice in writing.”

The right of entry to a lot is set out in Act s 125.

By s 125(1) the right may be exercised when “reasonably necessary”, and by s 125(2)(b) “at a reasonable time after at least seven days notice of the intended entry is given.” And “in compliance with the security and or other arrangements ordinarily applying”.

A grant of a right of access such as that proposed is inconsistent with the Act and contravenes s 264.”

The Decision of the First Adjudicator

  1. [13]
    On 19 March 2001, the adjudicator (P G Daniels) dismissed the Body Corporate’s application. The reasons published identified the relief sought, and s 223(1) of the Act as the source of an adjudicator’s authority to make orders that are just and equitable to resolve a dispute, in the context of a community titles scheme. The reasons then note that accessing the roof through the fire stairs from level 29 (the highest level below the roof) required access through the McGraths’ lot. The history of the period 1992-1994 was briefly recounted, as it has been above, and the use for seven or eight years of access through the fire stairs and lot 43 on level 28. The inconvenience for tradespersons and technicians forced to obtain access by walking up the stairs from level 14 was noted. It may be implicit, as was stated explicitly in the appeal, that no lot owner above level 14 has been willing to permit the regular access required through their lot. While common sense may point to the owner of level 29 as the one who ought to bear the burden, it is a curiosity that it is only the McGraths who have gone to considerable trouble and expense to secure an agreement which may (wholly or to an extent) exempt them.
  1. [14]
    The adjudicator noted the relevance of Australian Standard AS 1735.2 and the opposed views of persons who might be expected to have some expertise in assessing the necessity of roof access through level 29. The reasons proceed to “consider the substance of the application", after setting out sections 61, 62, 63, 66 and 67 of the Act and relevant definitions. The crux of the reasons was:

“It is clear that the common property contains utility infrastructure providing a utility service.

The question to be determined is whether section 62 gives the Body Corporate the right to access the roof through the respondents’ lot.

In my view the Body Corporate does not have such a right. Section 62 creates an easement for establishing and maintaining utility infrastructure within a lot. It does not allow a lot be used as a means of access to common property where utility infrastructure is located. The statutory easements created by sections 63-65 of the Act expressly allow entry onto a lot or common property to carry out maintenance or replacement. By way of example I have cited section 63 above. Access is regulated by section 66(2)-(4). Sections 61 and 62 do not provide such a power. I don’t think access is an ancillary right or obligation given that it is not mentioned in sections 61 and 62 and is mentioned in the other sections: section 67(1). Even if a similar access power existed in sections 61 and 62, it would be an incidental right to the easement created. The power could not be exercised to use a lot as a means of access to common property. It should also be noted that the general power to enter a lot as provided by section 125 of the Act does not allow a lot to be used as a means of access to the common property.”

Under the heading Jurisdiction the adjudicator determined there was a “dispute” giving rise to jurisdiction, distinguishing my decision in Tully v The Proprietors “The Nelson Body Corporate” (2000) QDC 031 (where a dispute with the Committee may have been demonstrated by the applicant, but not one with the Body Corporate) and holding that “the parties entered into a binding legal agreement to resolve this dispute back in 1994 … an effective bar to the Body Corporate succeeding”. There was an “express reservation about whether the respondents are required to grant access to their Lot in cases of emergency.”  The arguments by the McGraths that the adjudicator lacked jurisdiction to grant an easement by reference to s 231 of the Act and that the appropriate statutory provision was s 180 of the Property Law Act 1974 (which provides for compensation to the owner of the servient tenement) were dealt with by the view being expressed that there was no question about title to land to bring in s 231:

“The question to be decided is the extent of the easement.”

  1. [15]
    The final issues considered by the adjudicator concerned Body Corporate authorisation of the application. It was contended by the McGraths the authorisation of an application “to clarify the rights of access” did not authorise an application directed against the owners of Lot 44 only. The adjudicator’s conclusion was that a strict test would not be applied in determining whether an application came within the terms of an authorisation. The authorisation was considered sufficient. An argument that the Body Corporate could only accept grant of an easement by resolution without dissent (Standard Module s 112(2)(a)), which was not achievable because the McGraths would vote against it, failed, on the basis that there was no question of the adjudicator granting an easement, or even having power to do so. An argument that the resolution dated 14 September 2000 failed for non-compliance with s 37(1)(3) of the Body Corporate Community Management (Standard Module) Regulation 1997 was rejected, likewise an argument that the application to the adjudicator was invalid because of failure to comply with s 259 of the Act. That section requires a special resolution for the Body Corporate before it may “start a proceeding”. By sub-s (2) certain proceedings do not need a special resolution, including “(c) appeal against an adjudicator’s order.”  Authorities dealing with s 92 of the Act and s 26 of the Regulation, establishing that an appeal should be authorised by ordinary resolution, were noted. It was considered quite absurd to interpret s 259 to require a “special resolution to authorise the original application.”  The view was taken that “while an application to the Commissioner would normally be considered a proceeding … However, interpreting s 259 as a whole … an application to the Commissioner pursuant to the Act is not a proceeding for the purposes of s 259(1)”. The Committee could “authorise the making of an application: s 92(1) of the Act.”

New Steps Embarked on by the Body Corporate to Achieve Access

  1. [16]
    There was no appeal against that adjudicator’s decision. Ironically, whereas it was the McGraths raising jurisdictional arguments against the original application, it is now the Body Corporate wishing to set up that the (original) adjudicator lacked jurisdiction to pronounce upon certain issues, with a view to establishing that estoppels were not created against the Body Corporate.
  1. [17]
    The Body Corporate took the offensive in a new way, proposing motions to be considered at an Extraordinary General Meeting of lot owners called for 22 August 2001. One motion sought “authorisation for the Committee to seek consent of the proprietors of levels 28 and 29 to the granting of access across their foyers of those levels at such reasonable times as may be required to enable service and maintenance providers to carry out work on the common property and specifically the roof … and failing any agreement being reached … be authorised to refer any dispute in respect of such request for reasonable access to the Commissioner … for adjudication.” Authorisation of the Body Corporate to spend $8000 in legal costs was included. Alternative motions envisaged the Committee being instructed to obtain quotations including engineers’ reports regarding other possibilities for access to the roof, namely an outside lift, extension of one elevator shaft to accommodate a new lift car entrance to the plant room of level 31 and installation of chair lifts within the stairwell to run from the 14th level to the 30th level. Material supplied to owners in connection with the meeting included a Summary of Advice referring to Counsel’s opinion that there is implied in the s 62 easement a right to enter a lot, to the extent such entry is necessary to make easement effective and that, in any event, under s 125, the Body Corporate has a right to enter a lot where it is reasonably necessary to carry out work that the Body Corporate is authorised or required to carry out, such as maintaining the common property (including the utility infrastructure). The Summary (prepared by a firm of lawyers) referred to service providers being willing to “compromise” by getting roof access from level 28 and level 29 “on a roster basis” – perhaps a curious arrangement, in that it inconveniences two owners, rather than one.

The McGraths’ Application to the Commissioner

  1. [18]
    The McGraths were back before the Commissioner the week after distribution of the material referred to with their Application to Resolve a Dispute dated 8 August 2001 which sought the following orders:

"1. That the Commissioner rule that the Extraordinary General Meeting of CTS7230 to be held on Wednesday 22nd August, 2001 or any date thereafter, be restrained from considering the second part of Motion No.2 on the Voting Paper for that meeting (Annexure A), namely:-

“and failing any agreement being reached between the Body Corporate and proprietors of Levels 28 & 29, that the committee of the Body Corporate be authorised to refer any dispute in respect of such request for reasonable access, to the Commissioner for Body Corporate and Community Management for its adjudication.

Further that the Committee be authorised to expend up to $8,000.00 in legal fees in respect of an application to the Commissioner relating to the issue of access.”

  1. The Commissioner instruct the Committee to undertake negotiations with service providers and contractors which would ensure permanent access to the roof without the necessity of using any Lot as a means of access to the common property located on the roof – i.e. contractors to access the stairwell to the roof from common property.
  1. In the event such permanent access cannot be negotiated then the Committee of the Body Corporate be instructed to place the three alternative methods of access;

a. extension of existing elevator car.

b. installation of an outside lift.

c. installation of chairlift in stairwell.

to the members of the Body Corporate at a General Meeting so that proprietors can decide by vote which of the three alternatives be implemented.

  1. The Commissioner instruct the Body Corporate to desist from continuing to seek access through Lot 44.”

The McGraths’ Application Dismissed

  1. [19]
    On the eve of the proposed EGM, as requested by the McGraths, a different adjudicator (RA Meek) made the following interim order:

“I hereby order that if the motion (numbered 2 and headed Access from Levels 28 and 29) is carried at the meeting held on 22 August 2001, or any meeting held after that date at which the motion is considered, then the motion shall not be implemented or otherwise acted upon by the body corporate until a final order to this application is made, the application is withdrawn, or this order is of no effect by operation of law.”

However, after considering submissions, the new adjudicator dismissed the underlying application of the McGraths on 28 November 2001. As appears above, other orders were made entitling the owners of levels 27 and 28 to submit with the notice of any future meeting including any motion to the effect of the one referred to in the application and interim order a statement “to set out their position in respect of the issue of access”.

  1. [20]
    The new adjudicator was not impressed with the Body Corporate’s arguments that the original adjudicator’s order was tainted by a lack of jurisdiction, saying:

“I am not prepared to canvass these arguments. I consider they lack merit. Further, it seems unfair to me that a Body Corporate should be able to rely on its own alleged failings to now argue that an order made in a previous application (and contrary to the Body Corporate’s position) is now invalid.”

However, the Body Corporate’s submission that the subject matter of the current dispute “has not already been ruled upon and determined” was accepted, the original dispute having been identified as whether an easement could or should be granted under s 62.   The reasons state:

“In contrast, it seems to me that what motion 2 proposes is that, failing agreement between the body corporate and owners on levels 28 and 29, that application be made to this office for ADJUDICATION ON THE QUESTION OF THE BODY CORPORATE’S ENTITLEMENT TO “REASONABLE ACCESS”. This is a different a question from that considered in the previous application. I do not agree with the applicants that “the matter has already been adjudicated upon”. Whilst I acknowledge that the applicants might be placed in the position of again having to respond to an application, I nevertheless cannot agree with their submission. Moreover, it is not simply the applicants who would be involved in any such application. Presumably, all owners on levels 28 and 29 of the building would be respondents of that application. Given this determination, I do not propose to comment on the merits of any such application, or the likelihood of success, should it be made. In the event, I consider that most of the applicant’s response to any such application is already available to them, and will simply need to be put in a format to response specifically to the terms of the application, if made. In the circumstances, I intend to dismiss the first order as sought.

In respect of the other orders sought by the applicants, I note that they relate to actions the applicants request that I take to, in effect, prevent the body corporate from continuing to seek access through their lot (which presumably would include any future application for “reasonable” access), and as well, that I positively instruct the body corporate how it is to proceed in order to obtain an alternative method of access to the roof. For what I consider to be obvious reasons, I cannot do this. In this regard however, I do note that the body corporate did propose to consider motions at the EGM in question which specifically dealt with the three alternatives referred to by the applicants in the third of the orders sought. I further note that as these are “improvements” each motion will require a special resolution in order to be carried.

Obviously, it is a much cheaper option for the body corporate to be allowed access to the roof through lots on levels 28 and 29. Given this, I consider that owners might be inclined to vote for a future motion 2 on the basis that, at least to them, it involves no inconvenience and much less cost. Further, owners should note that even if this option is pursued, it might only be an illusory solution to the issue of access to the roof, given that any future application for access through lots on levels 28 and 29 is subject to a favourable outcome in respect of an application to this office. I therefore consider that owners should give some serious consideration to the other alternatives for access to the roof at any meeting at which these alternatives are again proposed.”

  1. [21]
    Adjudicator Meek may be foreshadowing that a new application, at least in relation to lot 44 on level 29, may encounter a similar fate to that meted out by adjudicator Daniels.

The 1994 Agreement Governs the Matter

  1. [22]
    Cutting to the chase, I think the matter is concluded by the 1994 agreement. I agree with Mr Gallagher QC (who appeared for the McGraths) that it would be unconscionable for the Body Corporate to resile from the clear statement in its document of 13 October 1994, for example by limiting the meaning of the word “is” so that its function is simply to describe the situation at that date, without implications for the future. It is not presently necessary to go so far as to say that anyone claiming through the McGraths would be protected by the 1994 agreement, or that it will necessarily last forever, however circumstances might change. Interesting questions might arise on other occasions calling for clarification. Circumstances may arise calling for interpretation of the 1994 documents, or “agreement”. The court shares adjudicator Daniels’ concern that the McGraths’ lot ought not to be immune from providing access in “emergency” situations as contemplated in s 125(2)(a). In such situations, the considerations are obviously very different from those calling for “at least seven days notice” as set out in (b). I understood Mr Gallagher’s clients to be in agreement that emergency situations are special. See the transcript at pages 17 and 52.
  1. [23]
    The 1994 arrangements, in my view, resolve an ongoing dispute between the McGraths and the Body Corporate which is indistinguishable from the one originally relied on by the Body Corporate in its application under the Act, and again, following failure of that application, is the basis of the process of proposing motions for consideration by lot owners, one of which envisages a new approach to an adjudicator. There is a classic “estoppel in pais” or estoppel by conduct, as Mr Gallagher variously called it. A useful check-list of the requirements is found in The Laws of Australia (LBC) 35.6 [62]:

“An estoppel occurs where a party induces an assumption in another by express or implied representation, which is relied on by that other to his or her detriment. Seven requirements must be proved in order to show that a person is to be held responsible for a representation:

  1. (1)
    there must be a representation by words or conduct;
  2. (2)
    the representation must be made by or on behalf of the person to be estopped;
  3. (3)
    the representation must come to the notice of the claimant;
  4. (4)
    the representation must be believed;
  5. (5)
    the representation must be voluntary;
  6. (6)
    the representation must be clear and unambiguous;
  7. (7)
    the representation must be such that a reasonable person would believe that it was intended to be acted on.”

If, contrary to my view, the acknowledgment was not contractual, I would have no difficulty in holding satisfied the requirement indicated by Brennan J in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387:

“A non-contractual promise can give rise to an equitable estoppel only when the promisor induces the promisee to assume or expect that the promise is intended to affect their legal relations and he knows or intends that the promisee will act or abstain from acting in reliance on the promise…”

  1. [24]
    Except as aforesaid, that estoppel covers the s 125 situation, as well as the s 62 situation, in my view. It is a representation by the Body Corporate that, at least in everyday situations, access through Lot 44 on level 29 is not needed. The McGraths paid a substantial sum of money to get that representation, and, in my opinion, they did and are entitled to rely on it. The reasons supporting the decision under appeal do not deal with this aspect, but it was clearly identified in the McGraths’ solicitor’s letter of 17 October 2001 to the Commissioner (paragraph 4) which enclosed a second opinion of Mr Gallagher supporting the argument. It may be that the more esoteric (and voluminous) arguments about issue estoppel and “Anshun” estoppel were a distraction.
  1. [25]
    Whether or not an issue estoppel is capable of arising, in the sense that adjudicator Daniels clearly considered the situation under both sections, having received submissions from the McGraths, at least, regarding the role of s 125, is a question that need not now be gone into, in my opinion.
  1. [26]
    Ms Bowskill’s argument against any effect being given to 1994 arrangements relied on s 264 of the Act:

“A person cannot waive, or limit the exercise of, rights under this Act.”

The Act was enacted and came into effect only in 1997. There was no corresponding provision in earlier legislation.

  1. [27]
    Section 264 says nothing about arrangements that might have been entered into before the commencement of the Act. Mr Gallagher responded with the submission that there is nothing to suggest that s 264 is intended to operate retrospectively, to destroy whatever rights accrued in the McGraths to prevent further action by the Body Corporate contrary to the terms of the agreement they made. The authority he cited in this connection was Beaumont v Yeomans (1934) SR (NSW) 562; 51 WN (NSW) 185. That decision dealt with amendments to an Act, but I would take it that the principles are the same when legislation comes into effect which had no counterpart before. Jordan CJ said (51 WN 186):

“As a general rule, substantive rights which have come into existence under the Act before its amendment are not affected by the amendment but are enforceable as though the Act had not been amended.”

The present issues, relevantly, are of substance, rather than procedure. The leading case (also cited by Mr Gallagher) is probably Maxwell v Murphy, referred to in paragraph [36].  

  1. [28]
    In deference to the able arguments presented on both sides, it may be appropriate to note some of them. Ms Bowskill sought to distinguish Mr Gallagher’s authority supporting the proposition that an adjudicator’s order could create an estoppel, State Rail Authority of New South Wales v Consumer Claims Tribunal (1988) 14 NSWLR 473, on the basis of the classification of the Consumer Claims Tribunal (at 479) as a “court exercising judicial power, despite the informality of many of its procedures”. She cited Lambidis v Commissioner of Police (1995) 37 NSWLR 320, 323-324. There, Kirby P said it was:

“safer to ground the capacity of a Tribunal to give rise to an issue estoppel binding on the same parties in later litigation in considerations which pay regard to the composition, functions and procedures of the Tribunal rather than in the title which it has been given.”

Ms Bowskill noted that the purpose of the relevant chapter of the Act was to provide a “dispute resolution service” as well as to provide education and information services aimed at promoting the avoidance of disputes (s 183) and that no particular qualifications were required in an adjudicator. The adjudicator’s duty is to investigate an application, observe natural justice, act quickly and with as little formality as possible, not being bound by the rules of evidence (s 220). Section 221 sets out the adjudicator’s investigative powers. While the adjudicator has power to “interview” the parties and “persons the adjudicator considers may be able to help in resolving issues raised by the application”, there is no calling of evidence or any formal hearing as such. In addition to the adjudicator’s investigations, the orders made are to be based on the application and submissions received. There are no pleadings, and evidence is gathered informally, partly by the adjudicator personally. Section 223 indicates that the adjudicator’s function is to make an order that is just and equitable to resolve a dispute. It was asserted the adjudicator does not exercise judicial power.

  1. [29]
    Mr Gallagher mounted a strong argument to the contrary, citing Administration of Papua New Guinea v Darra Guba (1972) 130 CLR 353, 354, see also McNair v Mayne Nickless Ltd EC 9700785, Supreme Court of Western Australia, Full Court 37 of 1996, 19 March 1997; R v Trade Practices Tribunal; ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361, 374 and Lambidis itself (per Priestly JA at 322) where emphasis was placed on the public policy of “the protection of parties from unnecessary re-litigation and the avoidance of the expense, inconvenience and anxiety involved in the same persons fighting a second time on an issue already decided between them.”  I think the particular circumstances of this dispute and the way in which it has been managed tend to favour the view that an issue estoppel arose. The issues were formulated and argued extensively by competent solicitors on both sides; the “evidentiary” material was extensive; adjudicator Daniels gave the issues detailed, careful consideration; the reasons are comprehensive, and, if I may so, demonstrate an impressive grasp of the issues and properly supported conclusions. I cannot help thinking, however, that other disputes may be resolved by the same or another adjudicator in very different ways, on submissions by parties who may not really understand what they are about, on inadequate material, perhaps, or in conditions of urgency, calling for a quick resolution of a dispute (the real implications of which may not even be appreciated). While adjudicator Daniels’ decision and reasoning are such that I for one would have no qualms about founding estoppels upon them, I do not think this is the occasion on which to pronounce any blanket ruling that any order of an adjudicator made under s 223 of the Act (which contains multifarious examples of what may be ordered, suggestive that on many occasions the adjudicator will be asked simply to resolve a minor short-term difficulty) necessarily produces, or is capable of producing issue estoppels.
  1. [30]
    Had I been prepared or found it necessary to hold that the adjudicator’s decision can found issue estoppels, I would consider that an estoppel arose as to the parties’ rights not only under s 62, but also their rights under s 125. It is not really to the point to ask whether an Anshun estoppel arises against the Body Corporate as a “plaintiff” who did not seek all relief, or particular relief on every conceivable basis open (cf Clout v Klein (2001) QSC 401 at [42] to [50]) because, although it did not mention s 125, the McGraths properly did, in such a way that it should have been anticipated by all concerned (including the Body Corporate) that the adjudicator would make a decision about the way in which s 125 applied. In my view that is what he did.
  1. [31]
    The way in which the availability of issue estoppel was confined by Sir Owen Dixon in his celebrated judgment in Blair v Curran (1939) 62 CLR 464, 531 ff renders defensible Ms Bowskill’s arguing that, but for the s 62 issue (to which I think the s 125 issue must be added), adjudicator Daniels went beyond matters “legally indispensable to the conclusion”. There is no suggestion he went beyond matters the parties raised. The Body Corporate’s original application went beyond the grant of an easement, it also sought “access” (a term not used in the Act, except in connection with access to documents), which, in my opinion is apt to bring in s 125. EGRI v DRG Australia (Ltd) (1988) 19 NSWLR 600 establishes that the court, in determining whether an issue estoppel has been made out, is entitled to look at the record, including the reasons for judgment, of the “court” whose determinations are said to create the estoppel (607G). Since the reasons refer to s 125, I think this approach does justify reference to the McGraths’ written submission to the adjudicator; it reveals the parameters of the argument. I consider it artificial to quarantine the adjudicator’s determination of other issues, that of estoppel by agreement in particular, which would have led to the same outcome, simply because the discussion in the reasons followed treatment of another issue in a way leading to failure of the application. I would say that each determination dictated the outcome as much as the other, that neither should be disregarded.
  1. [32]
    I do not doubt the correctness of the following submissions of Ms Bowskill (referring in the first instance to adjudicator Meek):

“18. The decision of the adjudicator is also supportable on the ground that, in order to create an issue estoppel, the determination relied upon must not be impeachable for want of jurisdiction: R v Hutchings (1881) 6 QBD 300 at 304-305; see also Attorney-General for Trinidad and Trobago v Eriche [1893] AC 518 at 522-523; Ex parte Amalgamated Engineering Union (Australian Section); Rec Jackson (1937) 38 SR(NSW) 13 AT 16-18 PER Jordan CJ. See also Spencer, Bower, Turner and Handley, The Doctrine of Res Judicata (3rd ed), Ch 4.

  1. The adjudicator could not give himself jurisdiction by a finding contrary to the fact:  Christopher Brown Ltd v Genossenschaft Osterreichischer [1954] 1 QB 8 at 12-13 per Devlin J; see also para 125 of The Doctrine of Res Judicata. That is, the adjudicator’s finding that he had jurisdiction to deal with the matter is not binding upon the parties by way of an estoppel.”
  1. [33]
    Her written submission picked up the descriptions of the bases on which it was submitted the adjudicator lacked jurisdiction in the Body Corporate’s solicitors’ submission to adjudicator Meek, paragraphs 12 to 31 (see the Exhibit book 341 ff). The court joins with him in his disapprobation of the Body Corporate’s impugning its own original application. In the circumstances, one would require a clear demonstration of absence of jurisdiction. Such is not the situation here, as adjudicator Daniels’ reasons show. It is nothing like the situation described in Sattell v The Proprietors of Be’bees Tropical Apartments BUP No 71593 (2000) QCA 496, paragraph 10.
  1. [34]
    It would be an unsatisfactory state of affairs were the Body Corporate, in the present circumstances, having failed on 19 March 2001 to establish a right of access to the McGraths’ lot, to have liberty to embark on a process (I think one doomed to failure) before the end of July 2001 calculated to lead to a “second bite of the cherry”, not much further in the future, a fortiori given what happened in 1994.
  1. [35]
    It is not shown by the Body Corporate that the original adjudicator made factual or other errors leading to a wrongful assumption of jurisdiction. If it matters, the policy considerations against re-opening jurisdictional issues which happen to have been fully argued, with the protagonists taking the opposite lines from those they now embrace, would seem to me to be very strong. The adjudicator was called on to determine those questions. It is not shown they were resolved in such a way as to create jurisdiction which could not have existed.
  1. [36]
    Mr Gallagher summed up what I think is the crucial aspect of his case when he said, “We’re here to enforce the ‘94 agreement”. In my view the McGraths, having defeated the Body Corporate’s claim for an easement and “access” before an adjudicator already, are entitled to an adjudicator’s order now to prevent the Body Corporate’s wasting its and the owners’ resources in any re-run of the application of 20 October 2000 which, for all that appears presently, is doomed to failure. I do not say the situation can never change. In my view the 1997 Act, while it would apparently preclude the making of the 1994 agreement now, has not set it at nought or changed its effect at all: future changes in legislation might have such an effect. An instance which has come about of changing circumstances affecting the matter is the availability of contractors (Advance Lifts (24 August 2001, Ex 1 p 398) and Wormald Fire Systems (7 September 2001 – Ex 1 p 401)) willing to restrict themselves to stairwell access above the 14th level. I agree with the basic thrust of the McGraths’ case that an estoppel prevents the Body Corporate from acting contrary to the 1994 agreement (Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387) and that s 264 Act has not changed the effect of that agreement. As Dixon CJ said in Maxwell v Murphy (1957) 96 CLR 261, 267:

“The general rule of the common law is that a statute changing the law would not, unless the intention appears with reasonable certainty, to be understood as applying to facts where events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events.”

  1. [37]
    The owner(s) of lot 43 (level 28) may well lack the protection of any equivalent of the 1994 agreement or a favourable determination in any tribunal. In those circumstances, the Body Corporate ought not to be precluded from applying to an adjudicator under s 125 (or s 62), if so advised, in respect of lot 43. The McGraths, in my view, are entitled to orders broadly of the kind sought by them. However, I would be grateful for the parties’ assistance in refining the orders sought by the McGraths, which were:

“1 That the Commissioner rule that the Extraordinary General Meeting of CTS7230 to be held on Wednesday 22nd August, 2001 or any date thereafter, be restrained from considering the second part of Motion No.2 on the Voting Paper for that meeting (Annexure A), namely:

 “and failing any agreement being reached between the Body Corporate and proprietors of Levels 28 & 29, that the committee of the Body Corporate be authorised to refer any dispute in respect of such request for reasonable access, to the Commissioner for Body Corporate and Community Management for its adjudication.

Further that the Committee be authorised to expend up to $8,000.00 in legal fees in respect of an application to the Commissioner relating to the issue of access.”

On the basis that the subject matter of that part of the motion relating to Level 29 has already been ruled upon and determined by the Adjudicator’s Order:  0610-2000 dated 19th March, 2001.

2. The Commissioner instruct the Committee to undertake negotiations with service providers and contractors which would ensure permanent access to the roof without the necessity of using any Lot as a means of access to the common property located on the roof – ie Contractors to access the stairwell to the roof from common property.

3. In the event such permanent access cannot be negotiated then the Committee of the Body Corporate be instructed to place the three alternative methods of access;

 a. Extension of existing elevator car.

 b. Installation of an outside lift

 c. Installation of chairlift in stairwell

 to the members of the Body Corporate at a General Meeting so that proprietors can decide by vote which of the three alternatives be implemented.

4. The Commissioner instruct the Body Corporate to desist from continuing to seek access through Lot 44.”

  1. [38]
    In my opinion, the first order requires qualification by the addition of words such as “to the extent that Lot 44 (level 29) is included”. It seems to me the second order ought to be qualified by words such as “unless the owner of any affected Lot consents”.
  1. [39]
    I think the fourth order sought should be qualified the addition of words such as “except in a case of emergency”. I appreciate that there has been little focus before the adjudicator or on the appeal as to orders 2 and 3, and that it is questionable whether the court ought to become involved in the management of the building in such detail. In the circumstances, it is probably better that those matters be returned to the adjudicator through the Commissioner under s 242 (1)(c) (together with other questions, possibly), unless the parties can agree on suitable order by which the court may resolve the whole application.
  1. [40]
    An error of law occurred in the second adjudicator’s decision insofar as it determined that the “only relevant determination by the original adjudicator was that the Body Corporate was not entitled to the benefit on easement over lot 44 on the basis of s 62 of the Act.” Whether or not the original adjudicator also did effectively determine that “the parties entered into a binding legal agreement to resolve their dispute … an effective bar to the Body Corporate succeeding”, that is, in my opinion, clearly the situation. As I have left open whether there was any issue estoppel that concluded matters before adjudicator Meek, I prefer to decide this appeal on the basis that, issue estoppels aside, there was an estoppel by conduct from the 1994 agreement. This estoppel precludes the Body Corporate from contending against the McGraths that (at least in ordinary circumstances) access through their lot is needed. The McGraths’ grounds in support of their application plainly set up the “1994 … acknowledgement creating an estoppel … an effective bar to the Body Corporate” (see p230 of the Exhibit Book). It was an error of law justifying this court’s intervention for the adjudicator to fail to give effect to that estoppel. I would reiterate that he can be forgiven if he lost sight of that simple route to the correct conclusion because of the multifarious further estoppel and jurisdictional arguments presented by the parties.
  1. [41]
    The appeal succeeds. I will hear the parties as to what orders ought to be made.
Close

Editorial Notes

  • Published Case Name:

    McGrath v The Body Corporate for "The Surfers Manhattan" Cts 7230

  • Shortened Case Name:

    McGrath v The Body Corporate for "The Surfers Manhattan" Cts 7230

  • MNC:

    [2002] QDC 253

  • Court:

    QDC

  • Judge(s):

    Robin J

  • Date:

    29 Aug 2002

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Attorney-General for Trinidad and Trobago v Eriche [1893] AC 518
1 citation
Jump To
Cite 1 - [1893] AC 518
Beaumont v Yeomans (1934) SR NSW 562
2 citations
Jump To
Cite 1 - (1934) SR NSW 562
Cite 2 - (1934) SR NSW 562
Beaumont v Yeomans (1934) 51 WN (NSW) 185
2 citations
Jump To
Cite 1 - (1934) 51 WN (NSW) 185
Cite 2 - (1934) 51 WN (NSW) 185
Blair v Curran (1939) 62 C.L.R., 464
2 citations
Jump To
Cite 1 - (1939) 62 C.L.R., 464
Cite 2 - (1939) 62 C.L.R., 464
Christopher Brown Ltd. v Genossenschaft Oesterreichischer [1954] 1 QB 8
1 citation
Jump To
Cite 1 - [1954] 1 QB 8
Clout v Klein [2001] QSC 401
2 citations
Jump To
Cite 1 - [2001] QSC 401
Cite 2 - [2001] QSC 401
Egri v DRG Australia Ltd (1988) 19 NSWLR 600
2 citations
Jump To
Cite 1 - (1988) 19 NSWLR 600
Cite 2 - (1988) 19 NSWLR 600
Ex parte The Amalgamated Engineering Union (Australian Section); Re Jackson (1937) 38 SRNSW 13
1 citation
Jump To
Cite 1 - (1937) 38 SRNSW 13
Lambidis v Commissioner of Police (1995) 37 NSWLR 320
3 citations
Jump To
Cite 1 - (1995) 37 NSWLR 320
Cite 2 - (1995) 37 NSWLR 320
Cite 3 - (1995) 37 NSWLR 320
Maxwell v Murphy (1957) 96 CLR 261
2 citations
Jump To
Cite 1 - (1957) 96 CLR 261
Cite 2 - (1957) 96 CLR 261
New Guinea v Daera Guba (1972) 130 CLR 353
2 citations
Jump To
Cite 1 - (1972) 130 CLR 353
Cite 2 - (1972) 130 CLR 353
New South Wales v Consumer Claims Tribunal (1988) 14 NSWLR 473
2 citations
Jump To
Cite 1 - (1988) 14 NSWLR 473
Cite 2 - (1988) 14 NSWLR 473
R v Hutchings (1881) 6 QBD 300
1 citation
Jump To
Cite 1 - (1881) 6 QBD 300
R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361
2 citations
Jump To
Cite 1 - (1970) 123 CLR 361
Cite 2 - (1970) 123 CLR 361
Sattel v Proprietors Be-Bees Tropical Apartments[2001] 2 Qd R 331; [2000] QCA 496
2 citations
Jump To
Cite 1 - [2000] QCA 496
Cite 2 - [2000] QCA 496
Stilk v Myrick (1809) 170 ER 1168
2 citations
Jump To
Cite 1 - (1809) 170 ER 1168
Cite 2 - (1809) 170 ER 1168
Stilk v Myrick (1809) 2 Camp 317
2 citations
Jump To
Cite 1 - (1809) 2 Camp 317
Cite 2 - (1809) 2 Camp 317
Tully v The Proprietors The Nelson Body Corporate [2000] QDC 31
2 citations
Jump To
Cite 1 - [2000] QDC 31
Cite 2 - [2000] QDC 31
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
3 citations
Jump To
Cite 1 - (1988) 164 CLR 387
Cite 2 - (1988) 164 CLR 387
Cite 3 - (1988) 164 CLR 387

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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