Gold Coast Commerce Club Inc v Body Corporate for Surfers Plaza Resort
[2008] QSC 323
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- Unreported Judgment
- Appeal Determined (QCA)
- Gold Coast Commerce Club Inc v Body Corporate for Surfers Plaza Resort[2008] QSC 323
- Add to List
Gold Coast Commerce Club Inc v Body Corporate for Surfers Plaza Resort[2008] QSC 323
Gold Coast Commerce Club Inc v Body Corporate for Surfers Plaza Resort[2008] QSC 323
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | |
Trial Division | |
PROCEEDING: | Trial |
ORIGINATING COURT: | |
DELIVERED ON: | 10 December 2008 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 20, 21, 24, 27, 28, 29 October 2008 |
JUDGE: | Dutney J |
ORDER: |
|
CATCHWORDS: | REAL PROPERTY – TORRENS TITLE – LEASES – DETERMINATION – EJECTMENT AND RECOVERY OF LAND – Where bowls club registered proprietor of parcel of land at Surfers Paradise – where development application to rezone that land – where development application proceeded and 13 storey resort constructed with an adjoining single storey car park with four bowling greens on the roof – where land occupied by resort became community titles scheme – where bowls club retained control of the four lots comprising the car park – where bowls club was registered proprietor of lots 5 and 342 – where bowls club lessee of lots 6 and 35 from council – where residents and guests of resort do not have allocated parking – where body corporate of resort leased lot 5 from bowls club to provide parking for residents – where lot 5 lease is registered for a term of 50 years ending in December 2038 – where car park shared between members of the bowls club and residents and guests of resort – where lot 5 can only be accessed by other lots not forming the subject of the registered lot 5 lease – where second plaintiff seeks to recover possession of the car park not the subject of the lot 5 lease REAL PROPERTY – TORRENS TITLE – LEASES – GENERALLY – Where defendant claims that the parties executed new leases in respect of all the land covering the car park in September 1998 – where those new leases were never registered – where in seven years following the execution of the new unregistered leases both parties continued to act in accordance with the registered lot 5 lease – whether the body corporate is precluded from relying on the new unregistered leases – whether the club is bound by the virtue of the bowls club treasurer at the time having signed the new unregistered leases – whether the bowls club by its management committee resolved to enter into the new unregistered leases – whether the indoor management rule applies so as to preclude the bowls club from denying that it is bound by the new unregistered leases – whether the body corporate has proved that the new leases were delivered to it by the club for the purpose of s 47 Property Law Act 1974 (Qld) REAL PROPERTY – TORRENS TITLE – INDEFEASIBILITY OF TITLE – EXCEPTIONS TO INDEFEASIBILITY – GENERALLY – Where after action commenced second plaintiff became registered proprietor of lots 5 and 342 – whether second plaintiff is entitled to take its interest in lot 342 free of the new unregistered leases REAL PROPERTY – TORRENS TITLE – LEASES – OTHER MATTERS – where bowls club leases lot 35 from the Gold Coast City Council – where council is a trustee of that land pursuant to the Land Act 1994 (Qld) – where bowls club is a trustee lessee – whether the new unregistered sub-leases are void for illegality ENVIRONMENT AND PLANNING – ENVIRONMENTAL PLANNING – PLANNING SCHEMES AND INSTRUMENTS – QUEENSLAND – REZONING APPLICATIONS – CONDITIONS – Where body corporate claims to be entitled to the use of the balance of the car park pursuant to a rezoning approval dated 10 November 1987 – whether rezoning approval was an approval given under a former planning scheme – whether the approval attaches to the land and binds the second plaintiff and the occupier LANDLORD AND TENANT – COVENANTS – FOR QUIET ENJOYMENT AND TITLE – BREACH – where plaintiff claims an injunction restraining the defendant from using, occupying or entering the car park other than the area of the lot 5 registered lease – whether to make the order would authorise a breach of the covenant for quiet enjoyment REAL PROPERTY – TORRENS TITLE – LEASES – OTHER MATTERS – where second plaintiff claims that body corporate owes to it arrears of rates pursuant to the lot 5 registered lease – where body corporate seeks to amend defence to plead limitation period defence – whether bowls club entitled to arrears of rates Associations Incorporation Act 1981 (Qld), s 1A, s 60 Corporations Act 2001 (Cth), s 5F Integrated Planning Act 1997 (Qld), s 3.5.28(1), s 6.1.23, s 6.1.24 Land Act 1994 (Qld), s 44, s 54, s 57, s 58, s 176 Land Title Act 1994 (Qld), s 184, s 185 Local Government Act 1993 (Qld), s 491, s 492 Local Government (Planning and Environment) Act 1990 (Qld), s 8.10 (8) Property Law Act 1974 (Qld), s 47 Burrell v Duncan [1957] St R Qd 52, considered Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd (2006) 229 CLR 577, cited Dowse v Wynyard Holdings Ltd (1961) 79 WN (NSW) 122, considered DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1977) 138 CLR 423, considered Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89, followed Re Giant Supermarket Properties Limited [1993] QPLR 229, cited Lee v Ferno Holding Pty Ltd (1993) 33 NSWLR 404, considered Miller-Mead v Minister of Housing [1963] 2 Qd 196, cited Morris v Kanssen [1946] AC 459, cited Northside Developments Pty Ltd v Registrar-General (1989) 170 CLR 146, discussed Owen v Gadd [1956] 2 QB 99, considered Royal British Bank v Turquand (1855) 6 EL & BL 327 [119 ER 886], followed Summers v The Commonwealth (1918) 25 CLR 144, considered Turner v Noosa Shire Council [1985] QPLR 158, cited Whitsunday Shire Council v Laguna Australia Airport Pty Ltd [2007] QSC 084, distinguished |
COUNSEL: | Mr A Morris QC with Mr C Wilkins for the plaintiffs Mr T Carmody SC with Ms C Heyworth-Smith for the defendant |
SOLICITORS: | Porter Davies Lawyers for the plaintiffs Hynes Lawyers for the defendant |
Background
[1] In 1987 the Surfers Paradise Bowls Club (“the bowls club”) was the registered proprietor of land on the corner of the Gold Coast Highway and Whelan Street at Surfers Paradise.
[2] On 15 September 1987 an application for rezoning came before the Gold Coast City Council. The applicant was Leisure Contractors Pty Ltd. The purpose of the application was to rezone the land so that a resort style development and a bowls club could be constructed.
[3] The proposed redevelopment involved the erection of a 13 storey residential tower above club premises. Adjacent to the tower was a car park with bowling greens on the roof.
[4] The resolution of the Council of 18 September 1987, insofar as it related to car parking, the subject of this action, was as follows:
“Provision of car parking in accordance with Town Planning Scheme requirements. Of this requirement at least 248 spaces are to be provided on site and access thereto in accordance with paragraphs 17 to 20 Division II Part VIII of the Town Planning Scheme and Council’s car parking policy and to the reasonable satisfaction of the Planning and Development Manager. Payment to Council of $13,700 is to be made for each space not provided on site such amount to be paid to the Council prior to occupation of the building.”
[5] An application to modify the proposal was considered by the Council on 10 November 1987 at which time, as a result of the alteration of the proposed resort to reduce the number of units from 156 to 143, changes were made to the car parking requirements. In that respect, Council resolved:
“That appropriate action be taken to amend conditions (A)(4) and (B)(1)(f) of the rezoning approval adopted by Council at its meeting held on 18th September 1987 to read:-
(A)(4) provision of car parking in accordance with Town Planning Scheme requirements. Of this requirement at least 211 spaces including 10 tandem spaces are to be provided on site and access thereto in accordance with paragraphs 17 to 20 Division II Part VIII of the Town Planning Scheme and Council’s Car Parking Policy and to the reasonable satisfaction of the Planning and Development Manager.”
[6] The development proceeded and ultimately the resort was constructed with an adjoining single storey car park with four bowling greens on the roof. The defendant is the body corporate for the resort (“the body corporate”).
[7] The land occupied by the resort became a community title with the bowls club retaining control of the four lots of land which comprised the bulk of the car park. The land which remained under the control of the bowls club was:
● lot 5 on Registered Plan 222120 in the Country of Ward Parish of Gilston, being the land contained in Title Reference 17217070 (“lot 5”);
● lot 342 on Crown Plan WD 4535 in the County of Ward Parish of Gilston, being the land contained in title Reference 15694226 (“lot 342”);
● lot 6 on Registered Plan 844070 in the County of Ward Parish of Gilston, being the land contained in Title Reference 18392151 (“lot 6”); and
● that part of lot 35 on Crown Plan WD 6228 in the County of Ward Parish of Gilston, Title Reference 49019099 which the bowls club held as lessee under registered lease number 602825066 (“lot 35”).
[8] The bowls club was the registered proprietor of lots 5 and 342 and the lessee from the Council under registered leases of lots 6 and 35.
[9] The bowls club clubhouse occupies lot 2 on community title scheme 6388 and is either leased by the bowls club from the body corporate or owned by the bowls club. In either event, a representative of the bowls club usually attends meetings of the body corporate. It was unnecessary to explore the bowls club’s title to the clubhouse.
[10] A narrow strip of the car park abutting the resort and which contains the roller door affording entrance to the car park is on the common property of community title scheme 6388.
[11] In order to provide parking for residents of the resort the body corporate took a lease over part of lot 5 for a term of 50 years from 22 December 1988 until 21 December 2038 (“the registered lot 5 lease”). The lease is registered.
[12] The area leased to the body corporate comprises 92.03% of lot 5. A small part of lot 5 containing stairs from street level to the bowling greens and the roller door used as an exit from the car park are not leased to the body corporate under the registered lot 5 lease.
[13] Owners of units in community title scheme 6388 do not have allocated car parks. Rather, since 1988 the whole car park has been shared between residents of the resort and their guests and members of the bowls club and their guests. The area of the registered lot 5 lease contains 105 marked parking bays. Lot 5 can only be accessed by crossing parts of the car park not the subject of the registered lot 5 lease.
[14] Problems arose as a result of thefts and criminal damage in the car park. The roller door providing entrance to the car park was kept open from 5.30 am until between 8.30 pm and 9.30pm each day in order to allow access to the car park by the bowls club members and guests. The exit door operated automatically as a car approached. Hence, anybody could access to the car park from 5:30am until the roller door was closed.
[15] The entry door is on common property of the body corporate and is controlled by the body corporate. The entry door is accessed by a driveway across common property of the body corporate.
[16] In late 2005, or early 2006 the manager of the body corporate unilaterally changed the hours the roller door at the entrance to the car park was left open. This was to reduce the problems that were being experienced. As a result of the changes, the door was opened at 7.45 am on Tuesdays and Fridays when the women bowlers commenced early and 8.45 am on each other day.
[17] At the same time the manager of the body corporate, Ms Stuart, cancelled the mil keys which provided after hours access to some members of the bowls club although she provided new mil keys to members who produced a letter from the club confirming their status. The old keys were cancelled because the body corporate had no record of who the keys were issued to.
The Action
[18] These changes caused unrest within the bowls club and ultimately resulted in this action being commenced by the bowls club to recover possession of those parts of the car park not subject to the registered lot 5 lease.
[19] The minutes of meetings of the bowls club suggest another motivation for these proceedings, that is, a desire to redevelop the car park; but that is not material to any of the issues I must decide. Because of the registered lot 5 lease, it would not be possible to re-develop the car park without co-operation from the body corporate in any event.
[20] Prior to the action being commenced, the bowls club had amalgamated with the Gold Coast Commerce Club and changed its name to the Gold Coast Commerce Club Incorporated, the plaintiff named in the action. For convenience, I shall continue to refer to the first plaintiff as the bowls club.
[21] After the action commenced the bowls club transferred lots 5 and 342 to Crestden Pty Ltd which has since become registered as proprietor of that land.
[22] By way of defence to the plaintiffs’ claim for ejectment, the body corporate relied upon a surrender of the registered lot 5 lease and new unregistered leases covering all of the land in the car park (“the new leases”). On their face, those documents were executed by the body corporate on an unspecified date and by the bowls club on 7 September 1998.
[23] The new leases over lots 5 and 342 were for a term of 38 years until 30 June 2036. The sub-lease over lot 6 was for a term of 20 years until 30 June 2018 and the sub-lease of lot 35 was for the same term.
[24] Further, or alternatively, the body corporate relies upon the covenant in the registered lot 5 lease for quiet enjoyment and the effect of s 3.5.28(1) of the Integrated Planning Act 1997 (Qld) the effect of which is submitted by the body corporate to be that it is entitled as of right to the use of 157 car parking spaces which number exceeds by 52 the number of spaces available on the land covered by the registered lot 5 lease.
[25] In addition, there is a claim by the plaintiffs for arrears of rates with which I shall deal separately.
The New Leases
[26] The registered lease over lot 5 provided for a peppercorn rental of $1 per year. In addition it contained the following clauses which are relevant to this action:
“I.THE LESSEE COVENANTS WITH THE LESSOR as follows:-
(a)to pay the rent hereby reserved within THREE (3) CALENDAR MONTHS of written demand therefor;
(b)to pay rates and taxes, local authority charges and other statutory charges, cleaning charges and/or charges for electricity or other power or light or services used in connection with the Demised Premises;
(c)to use and occupy the Demised Premises only for the purpose of car parking thereon…
(m)At all times through the term of this Lease at its own cost to maintain and keep the Demised Premises and all improvements thereon in good and tenantable repair …
(r)generally to meet and be responsible for all outgoings in respect of the Demised Premises;
…
(u)to keep the Demised Premises and the surrounding areas thereof in a thorough state of cleanliness having at all times particular regard to the use of the Demised Premises.
2.THE LESSOR COVENANTS WITH THE LESSEE as follows:-
The Lessee paying the rent and performing and observing the covenants on the part of the Lessee herein contained or hereby implied may peaceably hold and enjoy the Demised Premises during the said term without any interference of or disturbance by the Lessor or any person claiming rightfully under or in trust for it; …”
[27] Each of the four new leases or sub-leases was in materially identical terms. Each provided for a rental of $1 per annum payable yearly in advance to the bowls club.
[28] Relevantly the terms of each of the new leases or sub-leases were as follows:
1.The Lessor grants to the Lessee possession of the ground floor of the building erected on the lot ("the demised premises") to provide carparking for owners and occupiers of lots in BUP 8913.
2.The Lessee agrees that any car spaces which are not allocated for the use of particular lot owners in BUP 8913 may be used for casual carparking by members and bona fide visitors to the Paradise Bowls Club Incorporated.
3.The Lessee covenants with the Lessor:
(a)To pay the rent at the rate of $1.00 per annum yearly in advance to the Lessor at the address last advised by the Lessor to the Lessee in writing.
(b)To undertake routine cleaning of the demised premises and to maintain security systems in place from time to time.
(c)To pay the cost of electricity consumed on the demised premises.
(d)To obtain and keep in full effect in the names of the Lessee and Lessor public risk liability insurance for an amount of not less than $5,000,000.00 per claim or any higher limits the Lessor reasonably requires from time to time.
(e)Not to use the premises for any purpose other than carparking.
…
(g)To replace all fixtures, fittings and chattels and any part or parts which during the term become worn out, lost or unfit for the purpose for which the same are used at the date of this Lease, and further to install security devices and equipment as the Lessee in its discretion considers suited to ensure proper use of the demised premises for parking purposes.
…
4.The Lessor covenants with the Lessee as follows:
(a)To be responsible for all structural repairs to the demised premises.
(b)Subject to the Lessee paying the rent and performing and observing the covenants on the part of the Lessee contained or hereby implied, to permit the Lessee to peaceably enjoy the demised premises during the term without any interference of or disturbance by the Lessor or any person claiming rightfully under or in trust for the Lessor.
(c)To pay all land tax and local authority rates.”
[29] The authority for the body corporate to enter into the new leases was resolution 14 passed at the annual general meeting of the body corporate on 20 March 1998. The resolution passed without dissent and was in the following terms:
“That the Body Corporate enter into:-
(a)a sublease of the areas marked 6 and 35 for a term of twenty 20 years from 1 July 1998;
(b)a lease of the areas marked 5 and 342 for a term of forty (40) years from 1 July 1998 the areas being identified on the plan attached marked “A” on the terms and conditions set out in the attachment marked “B” and that the committee be authorised to execute documents necessary to effect registration of the subleases and leases and to execute any surrender of a pre-existing lease or sublease for the relevant area to ensure that new lease arrangements are registered.”
[30] At the time the resolution was passed the chairman of the body corporate was a Mr Allwood. Mr Allwood’s signature appears for the body corporate on the new leases. The other signatory was a Mr Arthur who was a committee man but has since died.
[31] Mr Allwood recalled that the leases and the surrender of the registered lot 5 lease were brought to him by Mr Silver or someone from Mr Silver’s office. Mr Silver was the principal of Stewart Silver King and Burns, body corporate managers for the defendant. Mr Silver was also the secretary of the body corporate at the time.
[32] When Mr Allwood received the documents they had not been executed by the bowls club. After they were executed by Mr Allwood and Mr Arthur the common seal of the body corporate was affixed and the documents were given back to Mr Silver. Mr Allwood had no further involvement with those leases. He was not advised whether they had been executed by the bowls club despite his position as chairman with the body corporate.
[33] Mr Silver gave evidence that he played no part in having the new leases executed by the bowls club.[1]
[34] The only evidence as to how the bowls club came to execute the documents came from Mr Elliott. Mr Elliott was one of the signatories to the new leases on behalf of the bowls club. Mr Elliott gave the following evidence:[2]
“Q.Can you explain to his Honour to the best of your recollection how you came to put your signature on these documents? - - Well in the constitution of the club there was the secretary/manager and the treasurer that would sign over seals. So the secretary/manager, which was me, would wait for Reg to sign first, because he was the treasurer and anything to do with the finance side and I would just countersign the seal.
- OK. Did you at the time when you signed or at any other time were you aware of a resolution by the committee of the club to authorise the seal to be put on by this document? - - No.
- Did you read the documents when you signed them? - - No, No. Normally Reg would just stamp them and I’d countersign because I had not any decisions to do with what the board agreed on.
- It might be suggested Mr Elliott that you must have understood you were doing something important and you know have a legal bearing. What would you say as to what went through your mind at the time as to whether or not you should be putting your signature on the documents? - - Nothing really I just do what I did because I was asked to do it by the committee and I worked for them.
- All right. Well when you say you were asked by the committee? - - Well the treasurer sorry.
Q.Did anyone else from the committee ask you? - - Not - I can’t remember.”
[35] Mr Naylor who is the other signatory on the new leases did not give evidence. He had left the club in apparently unhappy circumstances not long after the leases were signed.
[36] An examination of the minutes of the bowls club does not reveal any authorisation for either Mr Elliott or Mr Naylor executing the leases. There is no reason to believe that the minutes of the bowls club are not accurate.
[37] The new leases appear to have been stamped on 8 October 1998. The logical conclusion to draw from this is that they must have been executed between 7 September 1998 and 8 October 1998. Because Mr Elliott signed the leases when he was secretary/manager of the bowls club, they must have been signed in early October. The date of 7 September 1998, if it represents anything, must in fact relate to the execution by the body corporate. I infer this from Mr Allwood’s evidence and the evidence of Mr Elliott concerning his involvement with the bowls club.
[38] Mr Elliott’s evidence was that he had ceased his employment with the bowls club as secretary/manager in August 1998 and returned at the beginning of October 1998. In the intervening period he was the secretary/manager of a bowls club at Capalaba.
[39] After 8 October 1998, the next reference to the leases appears to be in a letter from the body corporate’s solicitors, Attwood Marshall, to the body corporate dated 13 November 1998 which reads as follows:
“We refer to registration of leases in the above matter.
It appears that the property owned by Surfers Paradise Bowls Club Inc has a Certificate of Title issued which will require to be produced by the Bowls Club to the Department of Natural Resources for the purpose of registration.
Please advise us of a contact at the Bowls Club so that we may arrange for the production of this Title Deed.”
[40] The only other relevant document relating to the stamping or registration of the new leases is an invoice from Prodoc Legal Services indicating that a representative of that business attended at the Department of Lands and Office of State Revenue for the purpose of “lodging/answer requisition/attend examiner” and “urgent stamping/ordinary stamping/advise assessment”. The notation on the invoice says “docs not lodged at Titles docs returned to Andrew Costello 09-03-99”.
[41] The next occasion anyone had reference to the new leases was described by Mr Power who was elected to the body corporate committee in March 1998 prior to the new leases being executed and became chairman in March 2000, a position which he currently still holds.
[42] Mr Power was asked when he first saw or had any connection with those documents. He then gave the following evidence:
“I actually discovered those documents in about late 2005 or early 2006.
Q.And when you say discovered how did you discover them and why were you looking for them? - - We were looking for - going through the minutes and correspondence of the body corporate.
Q.Why were you looking through the minutes of the body corporate? What caused you to do that? - - From the committee’s point – we were looking to find out what had actually happened in the past and we were trying to gather evidence for our solicitors.
…
- And in the course of doing that did you come across these documents? - - I came across these documents which were in a box with a file to do with car parking …
- OK where are they kept or where were they? - - the originals are all kept at our managing agents SSKB but there are copies held at the Surfers Plaza Resort in an area which is classed as a storeroom for the body corporate? And where’s the storeroom? - - It’s in what they call a mezzanine floor where there’s some major pumps housed and all it is just shelving with boxes.”[3]
[43] In the seven years between the execution of the new leases and their rediscovery, both the body corporate and the bowls club consistently acted on the basis that the body corporate’s rights to the car park were governed by and limited to the registered lot 5 lease.
[44] In particular, the bowls club continued to exercise exclusive occupation of the storeroom/machinery shed in the car park and in the soil bays, both of which areas were covered by the new leases. Mr Power’s evidence was that the body corporate committee had never intended to exercise any control over these areas.
[45] The body corporate never paid any rent under the new leases. Although there is no evidence that rent was paid under the registered lot 5 leases, that rent was only payable on demand. The position was different under the new leases.
[46] Although the body corporate paid the electricity and maintenance for the car park and did not pay any of the rates, a position consistent with the obligations under the new lease, they had paid the electricity and maintenance for the whole car park and had paid none of the rates during the 10 years preceding the execution of the new leases. In that respect nothing changed.
[47] The leases were never recorded in the asset register of the body corporate although such an asset register is maintained and would normally include leases. Consent to the sub-leases was neither sought nor obtained.
[48] The minutes of the committee of the body corporate are littered with references to the leased area of the car park. On 3 September 2001, item 6 of the matters arising from the minutes of the previous meeting is a resolution that Mr Robertson and the resident building manager should determine the number of car spaces available within the leased area of the car park. The minutes of the subsequent meeting on 8 September 2001 record the results of that audit. Mr Robertson and Mr Kafritsas are recorded as reporting that there were 94 marked car spaces in the area leased by the body corporate. The entire car park contains something in excess of 200 car parking spaces.
[49] The minutes of the annual general meeting of the body corporate held on 27 March 2002 again raise the question of the car park and the lease. Under the heading “Other matters” the following appears:
“Concern was expressed by several owners present with the present level of security in the car park and at the damage occasionally done to the motor vehicles parked therein. The chairman explained the ownership of the car park to the meeting noting that the body corporate had leased a significant amount of that car park from the Surfers Paradise Bowls Club Inc but that the Club retained the right for its members to also park in that area.”
[50] Again this is inconsistent with the operation of the new leases which if carried into effect would mean that the body corporate had control of the entire car park.
[51] On 30 November 2002 Stewart Silver King and Burns, who were the management company engaged by the body corporate and who provided the secretary, wrote to the bowls club in the following terms:
“The Body Corporate holds a lease over part of ground floor car parking area owned by the Surfers Paradise Sports Club. Of recent times the Body Corporate has become increasingly concerned about the damage and loss that is occurring from thieves breaking into residents’ cars parked within that area.
The Body Corporate wishes to construct a mesh security fence surrounding its leased area of ear spaces with a security gate to that enclosed area. When constructing that security fencing the present access and exits to Whelan Street and from Remembrance Drive for vehicles parking in the Club's area and the Body Corporate's leased area would be maintained and no interruption to the Club's present parking arrangements is envisaged.
…
The Body Corporate seeks the Surfers Paradise Sports Club's formal consent to these proposed works and looks forward to receiving your early advice.”
[52] The issue arose again in the context of a development proposal for the bowls club at the annual general meeting of the body corporate on 24 August 2004. After referring to the nature of the proposed development, the minutes go on as follows:
“The Secretary advised the Committee that a lease from the bowls club in favour of the Body Corporate over the ground floor of lot 5 operates until 21st December 2038. Incorporated in that lease is a provision which reserves the bowls club’s right to effect further improvement to the area or to rebuild repair add to or replace the building with a minimum of disruption to the Body Corporate as shall be practicable in the circumstances. This lease is the only issue affecting the proposed development that the Body Corporate has an involvement in.”
[53] The reference to the lease is plainly a reference to the registered lot 5 lease.
[54] The minutes of a budget committee meeting of the body corporate on 10 February 2005 dealing further with the proposed redevelopment of the bowls club contains a request from the committee of the body corporate to the bowls club to terminate the current lease which has a capacity of 105 car parks and replace it with an agreement guaranteeing a minimum of 146 car parks.
[55] I am satisfied from these and other similar references that notwithstanding the execution of the new leases by the body corporate and the apparent execution of the new leases by the bowls club, neither party thereafter acknowledged the existence of, or any rights arising from, the new leases.
[56] The issue raised is whether or not, having regard to the history of the matter, the body corporate is now precluded from relying upon the new leases as an answer to the bowls club’s claim for ejectment.
[57] The issues that arise in this context have been stated by counsel for the bowls club as follows:
(i) Whether the club is bound simply by virtue of Mr Naylor’s having purported to sign the documents for the club at a time when he was the club’s treasurer;
(ii) If not, whether the club, by its management committee or otherwise, resolved to enter into the defendant’s alleged documents;
(iii) Whether, if the club did not resolve to enter into the defendant’s alleged documents, the indoor management rule applies so as to preclude the club from denying that it is bound by the defendant’s alleged documents;
(iv) Whether the body corporate has proved that the new leases were delivered to it by the club for the purposes of s 47 of the Property Law Act 1974 (Qld).
[58] Rule 3(n) of the constitution of the bowls club conferred a power to lease property in furtherance of the club’s objects. Those objects were stated in clause 2 of the constitution as follows:
“The objects of the Club shall be to promote and encourage the game of bowls provide it maintain playing areas and accommodation for games and social functions to provide amenities for members and the encouragement of good fellowship among its members.”
[59] The bowls club accepts that it cannot argue that it was beyond its power to enter into leases generally in the nature of those relied upon by the body corporate.
[60] In this particular case, however, I accept that, in the absence of any minute of such a resolution, the bowls club neither by any general meeting of its members nor by its management committee ever resolved to enter into the new leases.
[61] Mr McLennan who was elected president of the bowls club in 1998 gave evidence that he was aware of a proposal put forward by the body corporate to give them control over the car park pursuant to a new lease. He recalls receiving and reading an initial document but gave evidence that the entry into such a lease was never approved by the management committee nor was it put to any general meeting of the club.
[62] Despite this, the body corporate relies on the provisions of s 60 of the Associations Incorporation Act 1981 (Qld). Relevantly that section provides:
“(1) Subject to this Act, the business and operations of an incorporated association shall be controlled by a management committee.
(2) Every member of the management committee and any manager duly appointed by the management committee acting in the business or operations of the incorporated association shall be deemed to be the agent of the incorporated association for all purposes within its objects.
(3) The acts of a member of the management committee shall be valid notwithstanding any defect that may afterwards be discovered in the member's appointment or qualifications.”
[63] The body corporate submitted that Mr Naylor was acting as the agent of the bowls club in executing the leases.
[64] Against this, the bowls club submits that entry into the new leases did not fall within the objects of the club. This is because the terms of the new leases made the ability of the bowls club members and guests to use the car park dependent upon decisions of the body corporate as to whether or not to allocate car parks to lot owners. It was submitted that this had the real potential to exclude bowls players from the car park and make it more difficult for the bowls club members and guests to play bowls. Thus, it was submitted the new leases constituted disposing of a basic and fundamental amenity used by club members and guests.
[65] In my view this argument does not arise in considering whether or not subsection 60(2) of the Associations Incorporation Act entitles the body corporate to rely on the execution of the leases by Mr Naylor as agent for the club. The reason for this is that it is plain on the face of the leases that Mr Naylor was not purporting to execute the leases as agent for the bowls club but was rather executing the leases as part of the process of affixing the common seal. It thus seems to me that the question of agency does not arise and the real issue is whether or not the body corporate is entitled to rely on the benefit of the indoor management rule.
[66] Three reasons were advanced on behalf of the bowls club as to why the body corporate was not entitled to the benefit of the indoor management rule.
[67] First it was argued that the documents were irregular on their face. Rule 27 of the club’s constitution required affixation of the common seal to be accompanied by the signature of a member of the management committee and be countersigned by the executive officer. In September 1998 Mr Elliott was not the club’s executive officer. There was also evidence that he had told representatives of the body corporate in August 1998 that he was ceasing to work with the club.
[68] In my view there is no substance in this argument. Mr Elliott’s evidence was that when he ceased to be executive officer he left not only the club, but the Gold Coast and went to Capalaba. It is thus unlikely that he would have been in a position to execute the document until he returned to the club in probably late September or early October. Further, I accept Mr Elliott’s evidence that he was secretary manager at the time he signed.[4]
[69] I have already concluded that the date of 7 September 1998 appearing next to the common seal of the bowls club is an error. It is unnecessary to consider whether that date should have been placed next to the seal of the body corporate or is an error for some other reason.
[70] The second reason why it is submitted that the indoor management rule cannot be relied upon was that the nature of the transaction itself was such as to put the defendant upon enquiry: Northside Developments Pty Ltd v Registrar-General (1989) 170 CLR 146 at 154-5 and 164 per Mason CJ; 180-1 per Brennan J; and 212 per Gaudron J.
[71] The need to inquire is said to arise from the substance of the transaction in which in exchange for an annual rent of $4 and the assumption of an obligation to undertake routine cleaning, maintain security systems, pay for electricity and maintain public liability, the bowls club leased the entirety of the car park on terms which, by clause 2, empowered the body corporate to allocate car spaces as it saw fit to lot owners in the body corporate. The exercise of this power could have resulted in all of the car spaces being allotted to lot owners leaving the bowls club’s members and guests with no car spaces whatsoever. Despite this the club was responsible for the payment of all rates and land tax for the car park and for the carrying out of any structural repairs.
[72] Such an arrangement was submitted to be one which fitted within the passage from the judgment of Lord Simonds in Morris v Kanssen [1946] AC 459 at 475 which the members of the High Court approved in Northside Developments:
“One of the fundamental maxims of the law is the maxim ‘omnia praesumuntur rite esse acta’ [all things are presumed to have been done rightly]. It has many applications. In the law of agency it is illustrated by the doctrine of ostensible authority. In the law relating to corporations its application is very similar. The wheels of business will not go smoothly round unless it may be assumed that that is in order which appears to be in order. But the maxim proper limits. An ostensible agent cannot bind his principal to that which the principal cannot lawfully do. The directors or acting directors or other officers of a company cannot bind it to a transaction which is ultra vires. Nor is this the only limit to its application. It is a rule designed for the protection of those who are entitled to assume, just because they cannot know, that the person with whom they deal has the authority which he claims. This is clearly shown by the fact that the rule cannot be invoked if the condition is no longer satisfied, i.e., if he who would invoke it is put upon his inquiry. He cannot presume in his own favour that things are rightly done if inquiry that he ought to make, would tell him that they were wrongly done.”
[73] The submission on behalf of the bowls club was that the new leases were so manifestly one-sided that the body corporate could not presume in its favour that things were rightly done.
[74] I am not satisfied that the new leases are manifestly one-sided when looked in the context of the time at which they were executed.
[75] In January 1995 the bowls club rendered an account to the body corporate for rates payable in respect of the leased part of lot 5 in an amount of $20,217.16. As a response to this account, the body corporate raised a contra account for the proportion of the electricity consumed in the car park which the area not leased from the bowls club bore to the leased area. Although the account raised by the body corporate was the same amount as the account submitted by the bowls club, the proportionate electricity charges were in fact higher.
[76] The amount which the body corporate calculated was payable by the bowls club was an amount of $22,410. This amount was calculated by taking the total power used in the car park between December 1988 and September 1994 of $72,000, apportioning 62.25 per cent of that to the bowls club area of the car park and charging the bowls club 50 per cent of that amount. The 50 per cent represented the 12 hours per day that the bowls club was making use of the car park. The minutes of a committee meeting of the body corporate of 10 March 1995 records not only the calculation, but also that thereafter the bowls club would be charged 31 per cent of the power account for the car parking area and the expenses associated with that area. The committee of the body corporate also resolved to take into account for the future the bowls club’s share of the cleaning costs for the car park, the replacement of the battery for emergency power and insurance cover.
[77] It seems to me to be significant that the obligations assumed by the body corporate under the new leases were obligations to pay the amounts which, in 1995 when the disputes arose, the body corporate sought to claim against the bowls club. At the same time, the bowls club assumed under the new leases the obligation to pay the amount which the bowls club had sought to claim against the body corporate.
[78] In theory at least the new leases appear to be drafted in such a way as to formalise what had in fact been the de facto position in relation to the car park prior to the disputes arising in 1995 or thereabouts. Notwithstanding the ability of the body corporate to allocate specific car parking spaces to specific unit holders, it had never done so notwithstanding the existence of the registered lot 5 lease. In any event, the total number of car park spaces greatly exceeded the number of units in the body corporate. Whatever the strict legal position might have been, it seems likely to me that there was not intended to be any change to the overall functioning of the car park as far as either party was concerned, save that the body corporate could provide better security for guests of the resort.
[79] As a result I am not satisfied that the nature of the new leases was such as to put the body corporate on notice to investigate whether or not the affixing of the common seal by the bowls club was properly authorised.
[80] The third basis upon which the indoor management rule was said not to apply was that it required reliance on the documents by the body corporate and, as can be seen by the recitation of the facts previously, there was never any such reliance.
[81] As far as the Associations Incorporation Act 1981 is concerned, the applicable indoor management rule is that established following the decision of Royal British Bank v Turquand (1855) 6 EL & BL 327 [119 ER 886].
[82] The assumptions parties are entitled to make in the case of corporations under the Corporations Act 2001 (Cth) do not apply to bodies corporate incorporated under the Associations Incorporation Act 1981 (Qld). Such corporations are excluded corporations within the meaning of s 5F of the Corporations Act by reason of s 1A of the Associations Incorporation Act.
[83] There is no statutory formulation of the indoor management rule in the Associations Incorporation Act 1981.
[84] The rule derives from a statement by Jervis CJ in Turquand’s case in these terms:
“We may now take for granted that the dealings with these companies are not like dealings with other partnerships, and that the parties dealing with them are bound to read the statute and the deed of settlement. But they are not bound to do more. And the party here, on reading the deed of settlement, would find, not a prohibition from borrowing, but a permission to do so in certain conditions. Finding that the authority might be made complete by a resolution, he would have a right to infer the fact of a resolution authorizing that which on the face of the document appeared to be legitimately done.”[5]
[85] The legal principles underlying the rule in Turquand’s case were discussed by the High Court in Northside Developments Pty Ltd v Registrar-General (1989) 170 CLR 146 without any clear resolution. At p 210, after setting out the statement by Jervis CJ, Gaudron J added:
“The final sentence of this passage suggests that the rule was grounded in notions akin to those which underlie estoppel, but no passage in the relatively brief judgment expressly so states. Nor is the legal foundation of the rule made explicit in subsequent cases …
Recently, … there has been debate as to whether the rule in Turquand's Case is a special rule of company law based upon considerations relating to the use of the company seal or is an illustration of what are said to be agency principles underlying the notion of ‘apparent’ or ‘ostensible’ authority.”
[86] Ultimately, it was unnecessary in Northside Developments Pty Ltd to resolve the question of whether reliance on the instrument such as would be necessary in the case of an estoppel was an essential prerequisite to the company being bound.
[87] It seems to me that the more conventional view of the rule in Turquand’s case is that, in the absence of a recognised exception, such as fraud, the party dealing with the corporation is entitled to assume the validity of documents apparently properly executed and that in those circumstances reliance to the party’s detriment is not an essential element.
[88] In the circumstances I am satisfied that the bowls club is not able to rely on any defect in execution to avoid being bound by the new leases in the event that they are otherwise enforceable.
[89] The final ground upon which it was submitted that the new leases were unenforceable was that there was no evidence of delivery.
[90] Section 47 of the Property Law Act provides:
“(1)After the commencement of this Act, execution of an instrument -
(a) in the form of a deed; or
…
shall not of itself import delivery, nor shall delivery be presumed from the fact of such execution only, unless it appears that execution of the document was intended to constitute delivery of the document.
(2)Subject to subsection (1), delivery may be inferred from any fact or circumstance, including words or conduct, indicative of delivery.
(3)In this section –
delivery means the intention to be legally bound either immediately or subject to fulfilment of a condition.”
[91] Ordinarily the question of delivery would not arise particularly where parties had acted in consequence of execution of the deed.
[92] In this case, however, there is the peculiarity that following execution, neither party acted on the basis that the new leases had come into effect. Rather, there appeared to be an assumption on the part of the body corporate that the registered lot 5 lease continued to operate and to govern its rights within the car park.
[93] The absence of any recognition by the body corporate of the existence of the new leases raises the question of whether there was any impediment to those leases coming into effect; or any collateral agreement postponing their operation. In the usual case, in the absence of evidence, it would be assumed that the documents took immediate effect; but this is not the usual case. The conduct of the party now seeking to rely upon the new leases was inconsistent with their existence. There seems to me to be a real question as to why. This issue was not addressed in the evidence. Undoubtedly, this was due to the lapse of time and the loss of corporate memory.
[94] In the circumstances of this case there is an onus upon the party now seeking to rely on the new leases to bring forward evidence to explain not only why the body corporate failed to put the new leases into effect but, rather, acted in a manner entirely inconsistent with their existence and consistent with the continuation of an entitlement only to the benefit of the registered lot 5 lease. From the bowls club’s point of view, the answer is that it never authorised the new leases or in a corporate sense, knew of their existence. Whether the lack of reliance on the new leases by the body corporate was because the body corporate knew the leases had not been authorised by the bowls club is not capable of being ascertained. The inference which I draw from the conduct of the body corporate which I have set out is that the body corporate did not intend to take up the new leases.
[95] Another way of approaching the same issue might be in terms of abandonment. In DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1977) 138 CLR 423 at 434 in the joint judgment of the majority, abandonment is addressed in these terms:
“But there can be no doubt that by 5th December 1974, when these proceedings were commenced, neither party, whatever may have been their reasons, regarded the contract as being still on foot. Neither party intended that the contract should be further performed. In these circumstances the parties must be regarded as having so conducted themselves as to abandon or abrogate the contract. The position is similar to that with which Isaacs J dealt in Summers v The Commonwealth. The plaintiff did not succeed in his action for damages for breach of contract, but on the other hand the defendant had not rescinded. Time passed during which neither party took any steps to perform the contract. It was held that the parties had so conducted themselves as mutually to abandon or abrogate the contract.”
[96] In Summers v The Commonwealth (1918) 25 CLR 144, at 151, Isaacs J said:
“Whatever the terms of a contract may be, it is possible for the parties so to conduct themselves as mutually to abandon or abrogate it. A position not altogether dissimilar arose in the case of De Soysa v De Pless Pol (1912) AC, 194. There, neither party had repudiated or refused to perform the contract, nothing in the nature of rescission had occurred, but, said Lord Atkinson for the Privy Council:- ‘One party to a contract is not bound to give to the other unlimited time after a day named to do that which the other has contracted to do. There must be some point of time at which delay or neglect amounts to refusal. ... In truth, the projects seem to have been to a great extent, if not altogether, abandoned by all the parties concerned.’ In my opinion, that is the legal position here. Informally, but effectively, the parties have so acted in relation to each other as to abandon or abrogate the contract.”
[97] In this case, I am satisfied that the bowls club never considered itself bound by the new leases, the execution of which was not authorised by it. Notwithstanding this, I am satisfied that the rule in Turquand’s case entitled the body corporate to rely upon the apparently valid execution of the leases. Notwithstanding this, the body corporate, for reasons unexplained by the evidence, chose not to give effect to the leases for a period of seven or more years and to act inconsistently with their having legal effect. In those circumstances, it seems to me that the conduct of the body corporate has been such that they must now be regarded as having abandoned their right to rely upon the new leases, irrespective of whether there was, at the outset, any other impediment to their being put into effect which reason has now passed from the corporate memory.
[98] For these reasons, I am satisfied that the body corporate is not entitled to rely upon the new leases as a basis for avoiding the bowls club’s claim for ejectment.
Transfer of Fee Simple to Crestden
[99] On the 25th of September 2007 Crestden Pty Ltd, the second plaintiff, (“Crestden”) became registered as proprietor of an estate in fee simple in lots 5 and 342. An alternative submission on behalf of the Bowls Club was that by virtue of such registration Crestden took free of any interest in lot 342 which the body corporate might have had by reason of the existence of the new lease. This result flows from the operation of section 184(1) of the Land Title Act 1994 (Qld).
[100] In Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at 171, the High Court reiterated that a party who obtains a registered interest with notice of an earlier unregistered interest takes free of that unregistered interest. None of the exceptions to section 184 set out in section 185 of the Land Title Act are relied upon by the body corporate which concedes that Crestden is entitled to take its interest in lot 342 free of the new lease.
[101] In relation to lot 5, the existing lease is registered. Because Crestden is not a party to the surrender of the registered lot 5 lease it cannot take advantage of that surrender and the body corporate remains and will remain entitled to the interest created under that lease.
Failure to Obtain Consent to Sub-Lease
[102] In relation to the leasehold land the bowls club submits that the new sub-leases are void for illegality.
[103] Lot 35 is a reserve for the purpose of local government and sub purpose of park, recreation and car parking. The Gold Coast City Council holds lot 35 as trustee within the meaning of section 44 of the Land Act 1994 (Qld).
[104] Section 57 of the Land Act provides that a trustee may lease all or part of the trust land if the trustee first obtains the minister’s written “in principle” approval to the lease. The lease to the bowls club terminates on the 30th of June 2018. Because the new sub-lease of lot 35 also terminates on the 30th of June 2018, it was submitted by the bowls club that it must be regarded as an assignment of the lease to the bowls club rather than a sub-lease from the bowls club. In Burrell v Duncan [1957] St R Qd 52, Mack J with whom Mansfield SPJ agreed said at 55:
“He further argued that as the sub-lease (so called) contained words of demise instead of words of assignment, as the rent was reserved to the head lessee, and as he was given a right of re-entry for non payment of rent and for breach of covenant, the position was fortified. But none of these matters prevents a so called sub-lease being in law an assignment, provided the grantor gives everything he has, because the basis of a lease is that a reversion is a condition indispensable to its existence. See Platt on leases page 19; Milmo v Carreras [1946] 1 KB 306 at pp 310-312.”
[105] To the same effect is the following passage from judgment of Handley JA in Lee v Ferno Holding Pty Ltd (1993) 33 NSWLR 404 at 410-411:
“Authority for the proposition that a sub-lease for a longer term than the head lease operates as an assignment of the head lease, and not otherwise dates back to Hicks v Downing (1696) 1 Ld Raym 99; 91 ER 962 and was reaffirmed in Milmo v Carreras [1946] 1 KB 306, where Lord Green MR said (at 310-311);
‘In accordance with a very old and established rule, where a lessee, by a document in the form of a sub-lease, divests himself of everything that he has got (which he must necessarily do if he is transferring to his so-called sub-lessee an estate as great as, or purporting to be greater than, his own) he from that moment is a stranger to the land, in the sense that the relationship of landlord and tenant, in respect of tenure, cannot any longer exist between him and the so called sub-lessee.’”
[106] It was submitted on behalf of the bowls club that the effect of treating the sub-lease of lot 35 as an assignment was that it would be unenforceable by virtue of the principles discussed by Muir J in Whitsunday Shire Council v Laguna Australia Airport P/L & Anor [2007] QSC 084; 2007 Aust Contract R 90-253.
[107] By virtue of being a lessee pursuant to a lease granted under section 57 of the Land Act, the bowls club is what that Act refers to as a “trustee lessee”.
[108] Subsection 58(1) of the Land Act provides:
“(1) A trustee lessee may transfer mortgage or sublease a trustee lease if the trustee lessee first obtains:
(a)the trustees written approval to the transaction; and
(b)if the trustee does not have a written authority under section 64 – the Minister’s written approval to the transaction.”
[109] These provisions appear to place a trustee lessee in a similar position to the trustee in relation to dealings with the land. Section 54 of the Land Act provides that the trustees of trust land are not authorised to dispose of the trust land. Considering these statutory provisions in Whitsunday Shire Council v Laguna Australia Airport Pty Ltd, Muir J came to the conclusion that while the Act did not expressly prohibit the sale of trust land by a trustee as a matter of construction, the disposition of trust land was prohibited. Thus, contracts purporting to dispose of interests in trust land otherwise then in accordance with the statute were unenforceable. The effect of applying the judgment to this case would be that the new sub-lease in relation to lot 35 would be unenforceable by the body corporate.
[110] A similar argument was advanced in relation to lot 6.
[111] By clause 4(e) of its registered lease of lot 6 from the Gold Coast City Council, the bowls club covenanted:
“Not to assign mortgage or charge its interest under the lease and not to sublet or part with possession of the demised premises or any part thereof for that in such case with the consent of the council in writing first had and obtained…”
[112] It was submitted that sections 491 and 492 of the Local Government Act 1993 (Qld) which then applied, prevented the council disposing of land otherwise than by way of auction or tender.
[113] In my view this does not prevent any purported sub-lease or assignment by the bowls club.
[114] The bowls club is unable to dispose of a greater interest in the land than it possessed. Section 491 deals with disposition of land by local authorities. In this case the local authority had already disposed of a leasehold interest to the bowls club and no subsequent dealing by the bowls club with the land could result in any greater disposition of property by the council.
[115] The only impediment to the grant of a sub-lease or assignment by the bowls club here would be the obtaining of the consent of the lessor. While an absence of consent might affect the ability of the body corporate to register a sub-lease or assignment, it would not, in my view, render the agreement unenforceable as between the bowls club and the body corporate.
Condition of rezoning creates an interest in land?
[116] In the event that I concluded, as I have, that the new leases were unenforceable the body corporate claims to be entitled to the use of the balance of the car park pursuant to the rezoning approval of the 10th of November 1987 to which I have earlier referred.
[117] The argument advanced on behalf of the body corporate relies upon the calculation of the minimum car parking provision underlying the actual resolution.
[118] In the explanatory material provided by the planning officer, the calculation of 211 car parking spaces was based upon the provision of 1 car parking space for each of the 143 units in the body corporate plus 14 for visitors together with various other car parking associated with the licensed club and other activities.
[119] That calculation did not form part of the council’s resolution which was that a minimum total number of car parks in total be provided.
[120] Reference was made in argument to section 6.1.23 within the transitional provisions of the Integrated Planning Act 1997 (Qld) (“IPA”) which provided:
“Continuing effect of approvals issued before Commencement
6.1.23(1)This section applies to —
(a) …
(d)approvals (also continuing approvals, by whatever name called, given under a former planning scheme but not included in paragraphs (a) to (c) in force immediately before the commencement of this section;
(2)Despite the repeal of the repealed Act, each continuing approval and any conditions attached to a continuing approval have effect as if the approval and the conditions were a development approval in the form of a preliminary approval or development permit, as the case may be.”
[121] It was submitted that the rezoning approval was an approval given under a former planning scheme (1982 scheme). The approval was in force immediately before the commencement of the section because the development had already occurred and there had been no relaxation of the conditions of approval by any new town planning scheme or subsequent legislation.
[122] Hence it was submitted that because the bowls club was permitted to develop its land subject to conditions and one of those conditions was to provide and continue to provide car parking spaces to the defendant, the bowls club was bound to do so as far as it was able. Insofar as the land had been transferred to Crestden it was bound by virtue of section 3.5.28(1) of the IPA which provides that the approval “attaches to the land the subject of the application and binds the owners the owner’s successors in title and any occupier of the land.”
[123] Section 6.1.24(1) of the IPA provides that:
“(1) If a local government has set conditions in relation to a continuing approval, the conditions attach to the land on and from the commencement of this section and are binding on successors in title.”
[124] These submissions are rejected by the bowls club.
[125] The position is complicated by reason of the fact that the approval to which the body corporate refers is a rezoning approval under the Local Government Act 1936 (Qld) (“LGA”). That Act was repealed by the Local Government (Planning and Environment) Act 1990 (Qld) (“the P & E Act”) which was itself repealed by the Integrated Planning Act 1997 (Qld).
[126] Section 8.10(8) of the P & E Act provides as follows:
“Each approval, consent or permission (but not any conditions attaching to the approval, consent or permission) granted by a local authority or the Governor in Council prior to the commencement of this Act, is to continue to have force and effect as if it were an approval, consent or permission, as the case may be, made pursuant to this Act (but any conditions attaching to the approval, consent or permission are still to apply as if this Act had not commenced).”
[127] The effect of this provision is that the conditions of the rezoning approval given on 10 November 1987 were not to be treated as conditions under the P & E Act. They continued to have the same effect they would have had under the LGA.
[128] This is significant because of section 6.1.24 which provides that conditions attached to an amendment to a former planning scheme approved under the P & E Act or under the IPA to attach to the land.
[129] It seems to me that the affect of section 8.10(8) of the P & E Act was that the conditions attaching to the rezoning were not to be treated as conditions imposed under the P & E Act and therefore not conditions to which section 6.1.24 of the IPA referred.
[130] The consequence is that the conditions of the rezoning approval in 1987 would not attach to the land unless they did so under the LGA.
[131] There was no provision in the LGA attaching such conditions to the land. There was authority for the proposition that development consent ran with the land[6] but no similar principle was established for a rezoning approval. Such authorities as exist within the Planning and Environment Court are to the contrary.[7]
[132] It seems to me to be doubtful whether the existence of the conditions confers any right upon the body corporate to access parts of the car park owned by Crestden which are not subject to the registered lot 5 lease.
[133] The preceding discussion assumes that the rezoning conditions require the provision of a fixed number of car parks to the body corporate. I am not satisfied that the assumption is valid.
[134] The conditions imposed by the Gold Coast City Council impose obligations on the bowling club to provide parking spaces. In my view, they do not go further and require that those spaces be provided to the body corporate. In other words, there is no corresponding proprietary right given to the body corporate entitling the body corporate to use the car parks provided outside any contractual arrangement with the bowls club. Thus any right to access the car parking spaces by the body corporate must be pursuant to an arrangement with the bowls club.
The covenant for quiet enjoyment
[135] Having reached these conclusions I turn to the relief sought in the third amended statement of claim.
[136] Each plaintiff claims recovery of possession of that part of the car park to which it is entitled other than that part covered by the registered lot 5 lease. The plaintiffs further claim an injunction restraining the defendant by itself, its servants agents or employees or otherwise howsoever from using, occupying or entering upon the car park other than the area of the registered lot 5 lease.
[137] By clause 2 of the registered lot 5 lease the bowls club covenanted with the body corporate as follows:
“The lessee paying the rent and performing and observing the covenants on the part of the lessee herein contained or hereby implied may peaceably hold and enjoy the demised premises during the said term without any interference of or disturbance by the lessor or any person claiming rightfully under or in trust for it.”
[138] The effect of the order sought is to exclude the body corporate absolutely from ingress to or egress from the leased part of lot 5.
[139] I am satisfied that to do so would be to authorise a breach of the covenant for quiet enjoyment.
[140] The issue arises most commonly in relation to shopping centres. In Dowse v Wynyard Holdings Ltd [8] in the context of the shopping centre, Jacobs J said:
“I do not find it necessary to determine whether the passageway is a convenience or not, since I consider that the interference with the passageway does interfere with the ordinary use or enjoyment by the lessees of the premises. I have already held that the passageway is an apparent accommodation to the premises and I consider that interference with an apparent accommodation, although that accommodation is off the demised premises, can amount to an interference with the ordinary use or enjoyment of the demised premises themselves… The implied accommodation of the passageway is part of the ordinary use or enjoyment of the premises whether a counter runs along the length of the passageway or whether a shop window runs along its length.”
[141] To similar affect was a decision of the Court of Appeal in England in Owen v Gadd [1956] 2 QB 99 where it was held that there could be a breach of the covenant for quiet enjoyment without an actual physical interruption into or upon demised premises on the part of the landlord.
[142] In this particular case, the land leased by the body corporate has been leased for the purpose of a car park. The only access to the car park is across the bowls club’s land. To deprive the body corporate of the right to traverse the balance of the car park in order to reach the leased portion would render the entire lease futile.
Discretionary Considerations
[143] In any event the case for the bowls club is founded upon the proposition that the body corporate has taken possession of the unleased part of the car park.
[144] The allegation is founded upon the decision of the body corporate to change the hours the roller door at the entrance to the car park was left open.
[145] I have already observed that the entry door is on land owned by the body corporate and controlled by the body corporate. It seems to me that had the body corporate denied guests and members of the bowls club access to the car park through that door, it would be difficult to regard that as taking possession of the balance of the car park. Particularly, I find this a difficult proposition when there is a door to the street presently used as an exit, which remains under the control of the bowls club.
[146] Further, I am satisfied that the body corporate has not deprived the bowls club or its members of access to the car park through the door on body corporate land. All that it has done is to restrict the hours on which the door was left open with the result that persons wishing to access the car park through that entrance at other times are required to obtain and sign for a mil key or otherwise arrange for the body corporate manager to let them in.
[147] There is no evidence that any person has been refused permission to enter the car park through the door controlled by the body corporate on the body corporate land.
[148] In the further amended defence, the defendant denies that it entered into possession of the balance of the car park on the date alleged by the bowl club.
[149] Since the bowls club has failed to establish to my satisfaction the unlawful possession of the unleased portion of the car park by the body corporate the occasion for ordering recovery of possession does not seem to me to have arrived.
[150] I am not satisfied that restricting the period of time the entry door is left continually open infringes any right of the bowls club and, in particular, any property right the bowls club has in the car park.
[151] For that reason the relief sought in paragraph 1 of the amended claim is moot and I decline to grant it.
[152] Insofar as the injunction is concerned it seems to me that even had there been unlawful taking of possession by the body corporate of the balance of the car park, enforcement of the injunction sought would breach the lessor’s covenant for quiet enjoyment contained in the registered lot 5 lease.
[153] I am satisfied that the claims for recovery of possession and an injunction must fail.
Arrears of rates
[154] Finally, there is a claim by the second plaintiff for the arrears of rates which the body corporate is obliged to pay pursuant to clause 1(d) of the registered lot 5 lease.
[155] Subject to any defence properly raised by the body corporate, Crestden is entitled to the benefit of the unpaid rates by virtue of the deed of assignment of the 17th of October 2008.
[156] The total rates paid by the bowls club in relation to the car park since the 8th of August 1994 amounts to $130,322.38.[9]
[157] The body corporate’s portion of those rates is estimated at $49,189.07. This amount is the proportion of the total rates which the area of the registered lot 5 lease is of the entire car park.[10]
[158] In addition, since Crestden took the assignment of part of the car park land it has paid further rates of which the registered lot 5 lease amount is $1,424.42.
[159] Applying interest at the rates prescribed by practice direction, the total amount owing by the body corporate comes to $50,613.49 for rates and $30,100.15 for interest.
[160] By way of defence the body corporate pleads the new leases. I have already found that the body corporate are unable to rely on the new leases.
[161] Alternatively, the body corporate pleads a failure on the part of the bowls club to make demand for the unpaid rent before the action was commenced.
[162] The obligation to pay rates in the registered lot 5 lease is not conditional upon demand.
[163] In the course of addresses counsel for the body corporate sought to amend the defence to plead a six year limitation period.[11] Six years prior to the commencement of proceedings is 26th of April 2000.
[164] The bowls club opposes the body corporate being granted leave to amend on the basis that such amendment would be futile.
[165] On behalf of the body corporate it was submitted that the claim was a claim on a speciality for which the limitation period is 12 years. [12]
[166] By section 176 of the Land Title Act 1994 a registered instrument operates as a deed. Since the lease under which the payment is sought is registered, its claim is one made pursuant to a deed and thus a claim on a speciality.
[167] It would follow that if the amendment were allowed it would fail and thus no useful purpose is served by giving leave at this late stage. I therefore refuse the body corporate leave to amend in relation to the limitation period.
[168] In the result I give judgment for the second plaintiff against the defendant in the sum of $50,613.49 for claim and $30,100.15 for interest.
[169] The claim is otherwise dismissed.
[170] I will hear argument in relation to costs.
Footnotes
[1] T 4-39.40.
[2] T 5-35.15 and following.
[3] T. 3-6.30 and following.
[4] See T. p 5-35 all 10-40.
[5] (1855) 6 EL & BL at p 332 [119 ER at p 888].
[6] See Miller-Mead v Minister of Housing [1963] 2 Qd 196, 215; Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd (2006) 229 CLR 577, 606.
[7] See Re Giant Supermarket Properties Limited [1993] QPLR 229 specially at 230; Turner v Noosa Shire Council [1985] QPLR 158 at 158-159
[8] (1961) 79 WN (NSW) 122 at 131
[9] See exhibit 9.
[10] The registered lot 5 lease covers 92.03% of the 2802 square metres contained within lot 5. The entire car park is 6,832 square metres resulting in the area of the registered lot 5 lease being 37.77% of the whole area of the car park.
[11] Limitation of Actions Act 1974 (Qld) s 10 (1)
[12] Limitation of Actions Act 1974 (Qld) s 10 (3)