SUPREME COURT OF QUEENSLAND
PARTIES: | ||
FILE NO/S: | ||
Trial Division | ||
PROCEEDING: | Application | |
DELIVERED ON: | 5 October 2012 | |
DELIVERED AT: | Brisbane | |
HEARING DATE: | 20-24 and 27-28 February 2012 | |
JUDGE: | Douglas J | |
ORDER: | Claim dismissed. Order in terms of paragraphs 37(a), (b), (d), (e) and (h) and 38(a) and (b) of the counterclaim subject to further submissions as to the form of the orders and costs. | |
CATCHWORDS: | REAL PROPERTY – STRATA AND RELATED TITLES – MANAGEMENT AND CONTROL – BYLAWS – GENERALLY – where the plaintiff has been operating a commercial car park in the development Cathedral Place since some time in 2001 – where the area of the car park is principally the common property of four bodies corporate including Cathedral Village which has six car spaces as part of its common property – where a controversy arose surrounding the provision made for car parking for the owners of units in Cathedral Village through the purported adoption of by-law 28 by the first defendant on 29 November 2000 – whether Cathedral Village has a legal or equitable interest in the area of the car park beyond its own common property – whether any interest in the general area of the car park it may have had has been terminated – whether a statutory right of user should be imposed on the car park land in favour of Cathedral Village or its members Land Title Act 1994 (Qld), s 184 Mixed Use Development Act 1993 (Qld), ss 3, 206, 206A Property Law Act 1974 (Qld), s 180 Boglari v Steiner School and Kindergarten (2007) 20 VR 1, referred Community Association DP No 270180 v Arrow Asset Management Pty Ltd [2007] NSWSC 527, cited Currumbin Investments Pty Ltd v Body Corporate Mitchell Park Parkwood CTS [2012] QCA 9, referred Gambotto v WCP Limited (1995) 182 CLR 432, referred Houghton v Immer (No 155) Pty Ltd (1977) 445 NSWLR 46, cited Katsikalis v Body Corporate for the Centre Community Title Scheme 14718 [2009] 2 Qd R 320, referred Lang Parade Pty Ltd v Peluso [2006] 1 Qd R 42, referred Pearce v Pearce [1977] 1 NSWLR 170, referred Radford v The Owners of Miami Apartments, Kings Park Strata Plan 45236 [2007] WASC 250, cited Trewin v Felton [2007] NSWSC 851, cited Vatcher v Paull [1915] AC 372, referred Vinden v Vinden [1982] 1 NSWLR 618, referred Westfield Management Ltd v Perpetual Trustee Co Ltd (2007) 233 CLR 528, referred | |
COUNSEL: | R A Perry SC for the plaintiffs B D O'Donnell QC with M Gynther for the defendants | |
SOLICITORS: | Herbert Geer for the plaintiffs Gadens Lawyers for the defendants | |
Introduction
[1] The plaintiff, The Proprietors Cathedral Village Building Units Plan No. 106957 (“Cathedral Village”), has been operating a commercial car park in the development known as Cathedral Place in Fortitude Valley, Brisbane since some time in 2001. Cathedral Place is a development with a complex structure, which houses residential and commercial units referable to a number of different bodies corporate. The area of the car park is principally the common property of four of those bodies corporate, including Cathedral Village which has six car spaces there as part of its common property.
[2] A controversy about the provision made for car parking for the owners of units in Cathedral Village through the purported adoption of by-law 28 by the first defendant, Cathedral Place Community Body Corporate (“Cathedral Place CBC”), on 29 November 2000 has led to disputes within and among the members of all the bodies corporate over many years since then.
[3] Cathedral Village’s tenure of the area owned by the other bodies is, at best at the moment on the view I have formed, a licence that has been terminated. The questions for me to consider in forming that view were:
[4] As will become clear, it is my view that the only interest that Cathedral Village now has in the car park area is the spaces forming part of its own common property. The rights it may have had earlier have been terminated and no statutory right of user should be imposed.
Background
[5] The task of comprehending the evidence will be assisted by reference to a plan of the basement area of the development which was incorporated into the statement of claim and which I have included as a schedule to this judgment. It is also important to become familiar with the parties.
[6] Cathedral Village is the first plaintiff. The remaining 24 plaintiffs hold lots in that body. The first defendant, Cathedral Place CBC, owns common property associated with the whole development in an area of the basement car park known as “CPL4” which is shown on the plan. The development includes a number of separate residential blocks as well as the Cathedral Village section devoted to commercial lots. The residential blocks each consist of separate bodies corporate. Two of those residential bodies corporate, the Proprietors Notre Dame Building Units Plan No. 106912 (“Notre Dame”) and the Proprietors Oxford & Cambridge Building Units Plan No. 106905 (“Oxford & Cambridge”) are the second and third defendants respectively and also own common property in the area of the car park.
[7] On the plan, the overall area in contention is outlined in yellow and CPL4 is hatched in green. Notre Dame common property is hatched in red, while Oxford & Cambridge’s common property, appropriately, is hatched in blue.
[8] Four of Cathedral Village’s car parks are hatched in red on the south-west corner of the plan. Another two are located in the basement below this level. Entry to the car park is from Gotha Street, which is at the bottom of the plan. It is controlled through a boom gate adjacent to the words “bollards and chains” at the entrance to the lift shown in the plan. Another entrance to the right is used for access to residential car parks allocated to owners of units in the residential bodies corporate.
[9] Two easements, “R” and “S” are shown on the plan and were registered over the community property of Notre Dame in favour of Cathedral Place CBC for access, defined as “for the purpose of a right of way … which shall include but not be limited to the right to pass up over and along the Servient Tenement.” There is also an easement “A” at the entrance to the car park in favour of Cathedral Place CBC given by Cathedral Place Developments Pty Ltd (“CPD”), the company that developed the whole site, again for the purpose of a right of way.
[10] No allocation of car parks was made to the owners of commercial units in Cathedral Village but representations were made to purchasers of those units when the development was created that they would have unallocated car spaces available to them in the area of the car park in a number proportionate to the area of the commercial units bought.
[11] The vendor, CPD, was a development company and a subsidiary of the Devine Limited group of companies. It is not a party to these proceedings. It agreed, when selling units in Cathedral Village, that it would procure the benefit of at least 55 car parks to that body corporate “by either exclusive use easement or other mechanism at the Seller’s discretion”.[1] CPD’s attempt to perform this condition occurred on 29 November 2000 at a meeting of Cathedral Place CBC whose chairman was Mr William Ritchie, then an officer of CPD. He also represented the unit holders of Cathedral Place CBC as all its units were then held by CPD. There was no other person with a vote present at the meeting. The attempt to comply with cl 46 of the contracts with unit buyers in Cathedral Village consisted of the passage by “comprehensive resolution” of a new by-law 28 of Cathedral Place.
[12] There were in existence already 27 by-laws which had been passed as special resolutions and resolutions without dissent. One of them was by-law 25 dealing with car parking for the lot owners and occupiers of the residential units. By-law 25 provided as follows:
“25.VEHICLE PARKING
(a)Purpose
The Body Corporate is responsible for the allocation of the exclusive use of carparking spaces that are either:-
The purpose of this By-law is to allocate the exclusive use of the carparking spaces.
(b)Allocation
(i)This By-law 25 refers to the Carparking Plans and the Allocation Schedule annexed to these By-laws;
(ii)The Lot Owners and Occupiers for the time being of the lots in the building designated in the Allocation Schedule are allocated exclusive use of the corresponding carparking space listed in the Allocation Schedule and identified in the Carparking Plan.
(c)Effective Date of Allocation
The allocation of the benefit of the exclusive use of the carparking space in this By-law 25 is effective from the date that both:-
(i)The Building Units Plan for the Lot Owners has registered; and
(ii)If applicable, the easement granting the benefit of the carparking space to the Body Corporate has registered.
(d)Swapping Carparking Spaces
Any two Lot Owners may by agreement swap carparking spaced provided that both give notice in writing of the swap to the Body Corporate.”
[13] The new by-law 28 adopted on 29 November 2000 provided as follows:
“28.Restricted Community By-law
(a)Application of By-law
This By-law applies to the Visitor Carpark designated on the plan attached to this By-law (‘Visitor Carpark’). Part of the Visitor Carpark is Community Common Property and part of the Visitor Carpark is Common Property for the subsidiary body corporate known as ‘Notre Dame’. The by-law applies to the portion on the Visitor Carpark that is on Community Common Property. The by-law is intended to apply to that portion of the Visitor Carpark that is Common Property for Notre Dame on registration of an easement from the proprietors Notre Dame BUP 106911 granting the benefit of that area to the Community Body Corporate for carparking purposes.
(b)Persons Entitled to use
The persons entitled to use the Visitor Carpark are the Proprietors ‘Cathedral Village’ 106957 and any person authorized by them, all of whom are individually and collectively referred to as ‘Authorised Persons’.
(c)Conditions of Use
The Proprietors Cathedral Village BUP 106957 must ensure that the Visitor Carpark is used:-
(i)only for purposes ancillary to the Mixed Use Development of Cathedral Place;
(ii)in a manner that complies with the by-laws form [sic] time to time for the Cathedral Place Community Body Corporate.
(d)Maintenance
The proprietors ‘Cathedral Village’ BUP 106957 must maintain the Visitor Carpark in a state similar to the other carparking areas on the common property for the Cathedral Place Community Body Corporate.”
[14] The plaintiffs also pleaded in paragraph 45 of the statement of claim that in about July 2000 Mr Ritchie agreed with himself in his capacities as representative of both Cathedral Village and Cathedral Place CBC at the time that:
“(a)The First Defendant would at its cost install a traffic control boom gate, parking ticket dispensing machine and associated equipment at the western Gotha Street entry and exit point for the carpark;
(b)The Plaintiff would, over time and on terms to be agreed, reimburse to the First Defendant the cost of installing the carpark equipment;
(c)The Plaintiff would pay levies imposed by the First Defendant including those calculated by the First Defendant to allow for the cost of carpark operation;
(d)The Plaintiff would manage and maintain the carpark at its cost and risk;
(e)The Plaintiff would receive the income from the parking tickets issued and paid for by users of the carpark.”
[15] Such an agreement was not established formally on the evidence although there was some discussion of the facts related to the assertions in Mr Ritchie’s evidence.[2]
[16] The plaintiffs argue that by-law 28 was intended to regulate the use of the car park in order to achieve compliance with the development approval for the project which provided, in respect of car parking that the developer should:[3]
“2.Construct / delineate / sign (as required) the following requirements as indicated on the approved plans of layout numbered A2001(4) and A2002(4) each as amended on 14 September 1998:
i.parking on the site not to exceed 556 cars and for the loading and unloading of vehicles within the site;
…
v.unrestricted access for bonafide (sic) visitors to any visitor car parking bay;
…
37.Demonstrate how it is proposed to ensure that the designated public parking area on Basement Plan Level B1 will not be used as a public car park for purposes other than ancillary to the approved development.
In particular:
(a)Notices are to be displayed in Basement Plan Level B1 alerting the public that the designated public parking area is for patrons of the retail/commercial area and visitors of residents only;
(b)The on-site Body Corporate Manager is to be responsible to monitor and police the designated area on Basement Plan Level B1 to ensure that it will not be used as a public car park for purposes other than ancillary to the approved development; and
(c)The designated public parking area is to remain as part of the Common Property of the development.”
[17] Section 3 of the Mixed Use Development Act 1993 (Qld) (“the MUD Act”), the Act which regulated this development, defined a “comprehensive resolution” to mean a resolution that has been passed at a properly convened meeting of the body corporate and for which the members that vote in favour have not less than 75% of the voting entitlements recorded in its body corporate roll. It can only be repealed by a comprehensive resolution.[4]
[18] Although by-law 28 purports to deal with the common property of Notre Dame in the car park on registration of an easement from its proprietors, there was no resolution on Notre Dame’s part in respect of the by-law. There was controversy also, whether easements “R” and “S” to which I have referred, which were registered later, were intended to be the easement from the proprietors of Notre Dame granting the benefit of that area to Cathedral Place CBC for car parking purposes referred to in by-law 28. The argument focussed on the fact that the easements registered were simply for access as a right of way and not for parking.
[19] At a meeting of Cathedral Place CBC held in June 2001, it was resolved that up to $65,000 be paid by it for the installation of a boom gate and ticket dispenser. One was eventually located on the common property of Notre Dame but was paid for by Cathedral Village and it charges fees for entry to the car park. No account of profits has been sought by the defendants in respect of that income.
[20] At an extraordinary general meeting of Cathedral Place CBC on 28 June 2010 by-law 28 was revoked by a comprehensive resolution but the efficacy of the resolution purporting to revoke the by-law is an issue in these proceedings because the plaintiffs contend that by-law 28 was actually a resolution without dissent which can only be repealed by a resolution without dissent.
[21] It is clear that Mr Ritchie, in passing the original resolution creating by-law 28, regarded it as a means of meeting CPD’s obligations under its agreements with purchasers of units in Cathedral Village to procure them the benefit of at least 55 car parks. In his evidence, he agreed that he had a divided loyalty in his capacity as an employee of CPD as well as being the representative of each of the bodies corporate of Cathedral Place.[5] One issue that arose from that evidence was whether there had been a “fraudulent” exercise of the power given to Cathedral Place CBC to control its community property, as that concept is understood in Gambotto v WCP Limited[6] and other decisions, requiring that the by-law be set aside.
[22] There was also an issue about the construction of the by-law, what rights it conferred, and in what circumstances it could be repealed.
[23] A number of the plaintiffs, but by no means all of them, gave evidence that the existence of car parking for their business was highly relevant to their decisions to purchase units in Cathedral Village and necessary for the efficient running of their businesses. There was other evidence that commercial car parks operated nearby that would be able to be used by the unit holders or their employees and that deliveries to the commercial units in Cathedral Village could be made by the use of existing and proposed delivery bays.
[24] In managing the car park, Cathedral Village had caused it to be marked off from the balance of Cathedral Place CBC’s community property by the use of chains, bollards and fencing. After the first defendant passed its resolution revoking by-law 28 on 28 June 2010, its committee gave instructions to remove the chains and bollards which had been installed at the eastern end of easement “R” shown on the plan attached. That had the effect of disabling the operation of the car park and enabling users to enter and exit without passing through the boom gate or taking a ticket from the ticket dispensing machine operated by Cathedral Village. The status quo was reinstated, however, by an interlocutory injunction pending the final hearing of this matter.
[25] In addition to the issues related to the meaning and continuing effect of by-law 28, there were issues including whether the plaintiffs or Cathedral Village had a registered interest in the car park or an equitable interest arising from some form of proprietary estoppel and whether a statutory right of user over the car park should be imposed.
[26] It is convenient to deal with the issues in the following order:
[27] To understand the argument about the effect of by-law 28, it is necessary to consider the effect of s 206 and s 206A of the MUD Act. Those sections provide relevantly:
“Community property by-laws
206.(1)Subject to subsection (5), the community body corporate may, by comprehensive resolution, make by-laws (“property by-laws”) for the control, management, administration, use or enjoyment of the community property.
(2)A community property by-law does not have effect until—
(a)the Minister approves the by-law; and
(b)notification of the Minister’s approval is published in the gazette.
…
Restricted community property by-laws
206A.(1)The community body corporate may make by-laws under section 206 that restrict the use of any part of the community property (“restricted community property”) to—
(a)a member of the community body corporate; or
(b)a body corporate created by the registration of a building units or group titles plan; or
(c)a proprietor of a lot created by the registration of a building units or group titles plan; or
(d)a precinct body corporate; or
(e)a member of a precinct body corporate; or
(f)a proprietor of a lot created in a staged use precinct by the registration of a building units or group titles plan; or
(g)a lessee or occupier of a lot within the site; or
(h)someone else while the person is engaged in construction works in the site or in a future development area or subsequent stage.
(2)Despite section 206(1), the by-law may only be made by resolution without dissent.
…
(5)The by-law that restricts the use of any part of the community property—
(a)must include—
(i)subject to paragraph (c), a description of the restricted community property; and
(ii)details of the persons entitled to use the restricted community property; and
(iii)the conditions on which the persons may use the restricted community property; and
(b)may include—
(i)particulars about—
(A)access to the restricted community property; and
(B)the keeping and supply of any necessary key; and
(ii)particulars of the hours when the restricted community property may be used; and
(iii)provisions about the maintenance of the restricted community property; and
(iv)provisions about imposing and collecting levies from the persons entitled to use the restricted community property; and
(c)need not describe the restricted community property, if—
(i)the by-law prescribes a way of identifying the property; or
(ii)the by-law authorises a person to identify the property; and
(d)may authorise a person to allocate the use of the restricted community property.
…
(7)If a person allocates the use of the restricted community property under a by-law mentioned in subsection (5)(d), the person must, as soon as practicable, give the community body corporate details of the persons to whom use of the property has been allocated.
(8)The description and details given to the community body corporate under subsection (6) or (7) are taken to be a by-law made under section 206 when both the description and details are received by the community body corporate.
(9)The community body corporate must give a by-law made or taken to be made under this section to the Minister for approval under section 206 as soon as practicable but not later than 3 months after it is made or taken to be made.
Maximum penalty—50 penalty units.
(10)If the by-law is approved by the Minister, the Minister must give details of the by-law to the registrar of titles as soon as practicable after the Minister approves it.
(11)A by-law made under this section does not have effect until the registrar of titles has recorded details of the by-law on the relevant community plan.”
[28] The defendants argue that by-law 28 was made pursuant to s 206 while the plaintiffs’ contention was that it was made pursuant to both s 206 and s 206A as a by-law restricting the use of part of Cathedral Place CBC’s community property which could only be made by resolution without dissent and only similarly repealed. It is significant that it was proposed and passed as a comprehensive resolution, apparently pursuant to s 206 and given ministerial approval on the same basis.
[29] The defendants also point out that by-law 28 is expressed as the grant of an entitlement to the Cathedral Village proprietors and any person authorised by them to use the car park rather than an attempt to restrict the car park’s use. The plaintiffs drew attention, however, to the description in the heading of the by-law “Restricted Community By-law”.
[30] The critical feature, to my mind, precluding the resolution from being treated as a restricted community property by-law for the purposes of s 206A is that it does not restrict the use of that part of the community property to the entities listed in s 206A(1). Nor is there any history relied on by the plaintiffs to establish that somebody has been authorised to allocate the use of the property for the purposes of s 206A(5)(c) and (7) of the Act. In fact there was a car parking attendant but it is not clear to me that he has been authorised pursuant to those subsections.
[31] Properly construed, therefore, the by-law does not fall within s 206A. It does not restrict the use to s 206A’s nominated classes of people but permits its non-exclusive use by the Cathedral Village proprietors and those they authorised. In that context, as the defendants submitted, it is relevant that by-law 25, in contrast, expressly refers to the allocation of “the exclusive use of the carparking spaces”.
[32] There were other persuasive arguments relied on by the defendants, including the fact that the resolution was passed as a comprehensive resolution rather than one without dissent. The happenstance that it was passed without dissent does not mean that it therefore falls within that statutory category which requires a resolution without dissent. One might as well describe a company resolution, notified and passed as a general resolution, as a special resolution simply because it achieved the majority required for a special resolution.
[33] As the defendants submitted, the effect of the plaintiffs’ literal interpretation of the statute is that a resolution about a matter which only requires an ordinary resolution, where the resolution is put to the meeting as an ordinary resolution, but passed without a vote against it, would meet the requirements of a “resolution without dissent”, which would, in turn, attract the entrenching provision of the Building Units and Group Titles Act 1980 (Qld). They urged a purposive construction of the Act based on the submission that the legislation reflects an intention that something that is to be put to a meeting as other than an ordinary resolution should be notified as being a special resolution, a resolution without dissent or a comprehensive resolution or a unanimous resolution. That does make sense when one bears in mind that unit holders need to know the category of resolution that is proposed to them to be voted on at a meeting in order to help them to decide whether their attendance is desirable.
[34] The defendants also submitted convincingly that it would be improbable that the by-law was intended to give exclusive use to the visitors’ car park to Cathedral Village and any person authorised by it as it could mean that a proprietor of a lot in Cathedral Village would only be able to use the car park if the proprietor first secured authorisation from the Cathedral Village body corporate. Similarly, they argued that it would be improbable that Cathedral Place CBC would be proposing to prevent Notre Dame and Oxford & Cambridge lot owners from using their own common property.
[35] The by-law was not put to the Minister as a by-law made under s 206A or as one which operated to restrict the use of community property. That is significant when one bears in mind that the Minister, when considering whether to approve the by-law, would be taken to address it as a resolution for non-restrictive use of community property only requiring a comprehensive resolution under s 206. It was submitted that the Minister’s approval was important and that the way in which the by-law was presented was as one made pursuant to s 206.
[36] In my view, taking into account these matters, the by-law is one passed pursuant to s 206 which can be revoked by a comprehensive resolution, not a resolution without dissent.
[37] If I had formed the view that it was one made pursuant to s 206A the defendants argued persuasively that I should hold it to be invalid because of its failure to meet the requirements of s 206A because it went beyond the categories of permissible exclusive uses under s 206A(1) and gave exclusive use over areas that are not community property such as the common property of Notre Dame, Oxford & Cambridge and Cathedral Village and failed to properly describe the community property in respect of which the restriction of use is imposed.
[38] The latter argument arose because the by-law was said not to identify which area of the car park hatched on a plan said to be attached to it was community property. The by-law registered did not include the plan or, at least, no plan can now be identified as associated with the by-law registered in the Titles Office.
[39] Alternatively, the defendants also argued that if the by-law was validly passed under s 206A then the plaintiffs’ actions went beyond what by-law 28 allowed and could not be saved by s 203.
[40] Had it been necessary for me to approach the case on the basis that the resolution had been made pursuant to s 206A, those submissions would have been persuasive but it is clear to me that the resolution was, as it was expressed to be, one made pursuant to s 206.
[41] The defendants also argued that the intention expressed in by-law 28 that it was to apply to that portion of the car park that was common property for Notre Dame had not been realised because no easement had granted the benefit of that area to Cathedral Place CBC “for carparking purposes”. Rather, easements “R” and “S” and easement “A” granted rights of way only which did not confer a right to park on the easement.[7]
[42] Mr Perry SC for the plaintiffs argued that, in context, even though there was no express reference to parking in the easement, a right to park on the area of the easement was reasonably necessary for the effective and reasonable exercise and enjoyment of the rights expressly granted and should be implied here. He referred to easements over the common property of other residential bodies corporate to Cathedral Place CBC which, he argued, were also only for the purpose of access but which he submitted had been used for car parking as an example of parallel conduct.
[43] The conclusion does not necessarily follow however as it is clear that reference to material extrinsic to the registered easement to establish the intention or contemplation of the parties is contrary to the principles of the Torrens system.[8] Nor do other decisions relied on by Mr Perry persuade me that he has established that permanent or casual parking on these easements can be characterised as necessarily part of passing and re-passing to and from the dominant property.[9] Factually, also, the easements in the residential car parks do seem to operate as rights of way rather than the use for parking to which easements “R” and “S” have been put. If it were necessary, I would also decide therefore that the condition expressed in by-law 28 regarding the application of the by-law to Notre Dame’s common property has not been met.
Has by-law 28 been revoked validly?
[44] On the view I have formed that by-law 28 was passed pursuant to s 206 of the MUD Act it is therefore one which can be revoked by a comprehensive resolution. That occurred in 2010 with the consequence that by-law 28 has not been in force since then.
Should by-law 28 be set aside as a fraud on the power?
[45] Another argument for the defendants was that by-law 28, in purporting to limit the persons entitled to use the “Village Carpark” to the proprietors of Cathedral Village and any person authorised by them, should be set aside. The submission was that Mr Ritchie for CPD preferred his, or its, self interest under the sales contracts to the original lot owners over the duty in the first defendant, Cathedral Place CBC, to discharge appropriately its power to control the use of its community property.
[46] The submission proceeds on the basis that CPD obtained an unauthorised benefit from the exercise of the voting power at the meeting from being able to regard itself as having discharged its contractual obligations to the purchasers of the plaintiffs’ lots without regard to the implications for the other bodies corporate as a result of the passage of the resolution. It was asserted that if some resolution was needed to control parking in the visitors’ car park then that could have been achieved by ensuring Cathedral Place CBC remained in control of its common property and expended money on installing boom gates and a system for operating the car park for the benefit of all the proprietors, their guests, and visitors.
[47] Rather, the argument went on, CPD illegitimately disposed of the common or community property if, as the plaintiffs contended, they had some kind of exclusive use or control of the visitors’ car park. The following features were said to be important:
“38.…
(a)no duration was set for the plaintiffs’ ‘use’ of the carpark;
(b)no fee, charge or rent or other remuneration was stated to be payable by the plaintiff for such use, and the evidence from Mr Gilliland was that no special fee or levy was paid to the body corporate for the use or operation of the car park: only the pro rata proportion of sinking fund and administrative levy;
(c)no fee, charge rent or other remuneration has in fact been paid by the plaintiffs to the defendants (or any of them);
39.On the above facts, the conferral of some sort of entitlement to exclusive use of the ‘visitor car park’ as contended by the plaintiffs amounted to a gift of that part of the community property of the first defendant (and probably the common property of the second and third defendants); or alternatively, a disposition of that part of the community property of the first defendant.”
[48] Although, in his re-examination, Mr Ritchie emphasised the importance to the overall development of maximising the success of the commercial units in Cathedral Village,[10] the defendants’ argument was that, if the effect of by-law 28 was to appropriate part of the common property of Cathedral Place CBC and the other defendants then CPD had preferred its interests to those of Cathedral Place CBC illegitimately in a fraud on the power given to Cathedral Place CBC to regulate its common property because the power was used to discharge CPD’s obligations to the buyers of units in Cathedral Village.[11] This was partly at least because the rights of unit holders in common property are significant and should not be removed unheedingly or inadvertently to their detriment.[12]
[49] Mr Perry submitted that Mr Ritchie’s evidence should be construed as an attempt to balance the respective unit holders’ competing interests by reference to the overall success of the development as a mixed use project. He compared it with by-law 25 which gave Cathedral Place CBC the responsibility for allocating the exclusive use of car parking spaces on its common property or on the common property of a subsidiary body corporate and subject to an easement in favour of Cathedral Place’s common property and argued that, if by-law 28 was bad, then by-law 25 should also be invalid.
[50] The analogy does not seem appropriate for the reasons advanced by Mr O'Donnell QC for the defendants, namely that by-law 25 merely implements the residents’ contractual rights to exclusive use car parks, where by-law 28 deals with use generally. Further, by-law 25 was adopted pursuant to a proposed resolution without dissent under s 206A of the MUD Act which permits the restriction of the use of any part of the community property where the by-law is made by resolution without dissent.
[51] By-law 28, on the other hand, was moved as a comprehensive resolution, requiring a 75% majority to succeed. Although, with Mr Ritchie as the sole person entitled to vote, both resolutions were passed without dissent, the distinction is important as a resolution passed without dissent can only be repealed by a similar resolution passed without dissent as I have already pointed out.[13]
[52] To revert to the question whether there has been a misuse of the power relied on for the creation of by-law 28, one needs to ask whether Mr Ritchie’s expressed concerns about the need for Cathedral Village to have car parking to assist the development to “work together in its totality”[14] should be permitted to override Cathedral Place’s interest in retaining control of its use of its common property. Having regard to the alternative possibility proposed where Cathedral Place CBC could have remained in control and spent money on installing boom gates for the benefit of all proprietors, their guests, and visitors, no obvious reason springs to my mind to justify an appropriation of its rights.
[53] If the resolution had resulted in the appropriation of Cathedral Place’s rights then the result would have been that Mr Ritchie, on behalf of CPD, exercised his power to secure a particular gain for CPD, in apparent discharge of its contractual obligations to the original purchasers of lots in Cathedral Village, which did not arise fairly out of Cathedral Place CBC’s power to control its own community property pursuant to s 206 of the MUD Act and would have been able to be set aside.
[54] I should hasten to add that although the law uses the description “fraud on a power” to describe this type of behaviour it is clear that it does not necessarily denote any conduct in the common law meaning of the term which could be properly termed dishonest or immoral. “It merely means that the power has been exercised for a purpose, or with an intention, beyond the scope of or not justified by the instrument creating the power.”[15]
[55] Because I have reached the view that Cathedral Place CBC remains entitled to deal with its property itself and has done so effectively by removing by-law 28 at its meeting of 28 June 2010, the occasion to determine whether the licence created by by-law 28 in favour of Cathedral Village was an improper exercise of the power does not arise. If, contrary to the view I have formed, the by-law had the effect of appropriating Cathedral Place CBC’s property in the car park, I would have set it aside.
Does Cathedral Village have a registered interest in Cathedral Place CBC’s community property?
[56] Another consequence of Mr Perry’s argument that by-law 28 was passed pursuant to s 206A was, he submitted, that when its details were recorded on the relevant community plan they created a registered, indefeasible interest in favour of Cathedral Village unlike the situation that applies to a by-law passed pursuant to s 206. It is sufficient therefore, for present purposes, to rely on my conclusion that by-law 28 was an attempt at an exercise of power under s 206 not s 206A.
[57] Section 184 of the Land Title Act 1994 (Qld), as Mr O'Donnell pointed out, also makes indefeasible only the registered proprietor’s interest, namely that of Cathedral Place CBC. The right to use its property ostensibly given by the by-law does not amount to a proprietary interest in it and is not registered on the title as such.
Do the plaintiffs or some of them have an equitable interest in the car park?
[58] Nor does the claimed proprietary estoppel arise. Although Cathedral Village has expended money on the car park, it has been reimbursed from its takings from those who park there and did not spend the money on any understanding, express or implied, that it would thereby acquire a proprietary interest in the car park. All that it has ever had was, at best, a licence without an expectation that it or its unit holders would obtain an interest in the land beyond the six car spaces allocated to Cathedral Village.
[59] It was argued that it had, in effect, become entitled to an irrevocable licence in the land by analogy with the discussion in cases such as Pearce v Pearce[16] and Vinden v Vinden.[17] But, in each of those cases, there was an expenditure of money on the assumption that the plaintiff would acquire an interest in the land which is not this case. In my view, there is no entitlement to such a proprietary interest in the car park that would be recognised in equity either in Cathedral Village or in its unit holders.
Should a statutory right of user under s180 of the Property Law Act 1974 (Qld) be imposed over the area of the car park?
[60] The claim for the imposition of a statutory right of user under s 180 is brought on behalf of all the unit holders in Cathedral Village but not on its part. It appears to be a claim on behalf of each of the second and subsequent plaintiffs for a licence in perpetuity over the whole car park subject only to termination by Cathedral Place CBC by a resolution without dissent. It is not clear in favour of what land the imposition of the licence is sought, but I infer that it is in respect of each lot held by each of those plaintiffs. The section provides relevantly:
“180Imposition of statutory rights of user in respect of land
(1)Where it is reasonably necessary in the interests of effective use in any reasonable manner of any land (the dominant land) that such land, or the owner for the time being of such land, should in respect of any other land (the servient land) have a statutory right of user in respect of that other land, the court may, on the application of the owner of the dominant land but subject to this section, impose upon the servient land, or upon the owner for the time being of such land, an obligation of user or an obligation to permit such user in accordance with that order.
(2)A statutory right of user imposed under subsection (1) may take the form of an easement, licence or otherwise, and may be declared to be exercisable—
(a)by such persons, their servants and agents, in such number, and in such manner and subject to such conditions; and
(b)on 1 or more occasions; or
(c)until a date certain; or
(d)in perpetuity or for some fixed period;
as may be specified in the order.
(3)An order of the kind referred to in subsection (1) shall not be made unless the court is satisfied that—
(a)it is consistent with the public interest that the dominant land should be used in the manner proposed; and
(b)the owner of the servient land can be adequately recompensed in money for any loss or disadvantage which the owner may suffer from the imposition of the obligation; and
(c)either—
(i)the owner of the servient land has refused to agree to accept the imposition of such obligation and the owner’s refusal is in all the circumstances unreasonable; or
(ii)no person can be found who possesses the necessary capacity to agree to accept the imposition of such obligation.
…”
[61] The jurisdiction is used normally in cases where the relevant land has no or limited legal access available for rights of way or utilities. In determining whether it is reasonably necessary in the interests of effective use in any reasonable manner of the dominant land, the relevant principles have been summarised as follows:[18]
“[23]The applicant usefully and accurately summarised the relevant principles on this issue as follows:
(a)One should not interfere readily with the proprietary rights of an owner of land.
(b)The requirement of ‘reasonably necessary’ does not mean absolute necessity.
(c)What is ‘reasonably necessary’ is determined objectively.
(d)Necessary means something more than mere desirability or preferability over the alternative means; it is a question of degree.
(e)The greater the burden of the imposition that is sought the stronger the case needed to justify a finding of reasonable necessity.
(f)For a right of user to be reasonably necessary for a development, the development with the right of user must be (at least) substantially preferable to development without the right of user.
(g)Regard must be had to the implications or consequences on the other land of imposing a right of user.”
[62] It is not a remedy apt to be applied to enforce the creation of a car park for the holders of units in a particular part of a development such as this over the community property of another body corporate in the same development for what appears to be a claim to permit the unit holders to park permanently. The defendants made a number of submissions which appear to me to be insuperable, namely:
[63] It also seemed to me to be inappropriate to use this remedy in this situation where the legislature has already created a complex statutory scheme for the regulation of bodies corporate. Decisions dealing with car parking are are intended to be made pursuant to those relevant statutes and the bodies corporate have been empowered to deal with community property in precisely regulated circumstances. For these reasons it would be quite inappropriate to use the remedy provided by s 180 in favour of those plaintiffs.
Conclusion
[64] Although one can sympathise with the unit holders in Cathedral Village for not having obtained what they were promised by CPD, it is not open to them to seek to obtain what they were promised by attempting to prolong the revocable licence given by the original passage of by-law 28 by Cathedral Place CBC.
Orders
[65] I propose to dismiss the claim and make orders in terms of paragraphs 37(a), (b), (d), (e), and (h) and 38(a) and (b) of the counterclaim subject to further submissions as to the form of the orders and costs.
![The Proprietors Cathedral Village Building Units Plan No. 106957 v Cathedral Place Community Body Corporate [2012] QSC 301](/judgmentview/image?name=78527.001.png&id=78527)
[1] See cl46 in ex 1 tab J1, a typical contract between CPD and a purchaser of a unit in Cathedral Village.
[2] See T 2-85 to T 2-86.
[3] See ex 8, pp 6 and 29.
[4] See s 14 of Schedule 2 Part 2 of the Building Units and Group Titles Act 1980 (Qld).
[5] See T 3-12 ll 30-55; T 3-15 ll10-32 and T 3-22 ll 14-45.
[6] (1995) 182 CLR 432.
[7] Boglari v Steiner School and Kindergarten (2007) 20 VR 1,8 at [34].
[8] Westfield Management Ltd v Perpetual Trustee Co Ltd (2007) 233 CLR 528, 539 and Currumbin Investments Pty Ltd v Body Corporate Mitchell Park Parkwood CTS [2012] QCA 9 at [41]-[53].
[9] See Trewin v Felton [2007] NSWSC 851 at [46]-[52].
[10] See T 3-22 ll 14-45.
[11] See Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46, 53, applying general principles relating to fraud on a power in the context of legislation dealing with bodies corporate such as these. See also Community Association DP No 270180 v Arrow Asset Management Pty Ltd [2007] NSWSC 527 at [216]-[225] and Radford v The Owners of Miami Apartments, Kings Park Strata Plan 45236 [2007] WASC 250 at [157]-[162].
[12] Katsikalis v Body Corporate for the Centre Community Titles Scheme 14718 [2009] 2 Qd R 320, 326 at [32].
[13] See s 14 of Schedule 2 Part 2 of the Building Units and Group Titles Act 1980 (Qld).
[14] See T 3-22 ll 44-45.
[15] Vatcher v Paull [1915] AC 372, 378.
[16] [1977] 1 NSWLR 170, 174-175.
[17] [1982] 1 NSWLR 618, 624-625.
[18] Lang Parade Pty Ltd v Peluso [2006] 1 Qd R 42, 47-48 at [23] (footnotes omitted).
[19] See s 180(3)(a).
