Dainford Ltd v Smith [1985] HCA 23; (1985) 155 CLR 342 (28 March 1985)

HIGH COURT OF AUSTRALIA

DAINFORD LIMITED v. ERIC KENNETH SMITH & ANOR. [1985] HCA 23; (1985) 155 CLR 342

Real Property (Q.)

High Court of Australia
Gibbs C.J.(1), Mason(2), Wilson(3), Brennan(4) and Dawson(5) JJ.

CATCHWORDS

Real Property (Q.) - Home unit - Exclusive use of car parking space - Use of space governed by by-law - By-law required to specify terms and conditions of special privileges given to particular lot over common property - Validity of by-law - Delegation of legislative power - Reference to extrinsic matters - Specific performance - Building Units and Group Titles Act 1980 (Q.), s. 30(7).

HEARING

1984, November 6; 1985, March 28. 28:3:1985
APPEAL from the Supreme Court of Queensland.

DECISION

GIBBS C.J. The appellant was the vendor and the respondents were the purchasers under a contract made on 30 August 1981 for the sale of a home unit (lot No. 21) in a multi-storey building intended to be constructed by the appellant at Surfers Paradise in Queensland. The building was constructed and a plan was registered under the Building Units and Group Titles Act 1980 (Q.) ("the Act") on 31 December 1982. The effect of cl.3(a) of the contract, in the circumstances, was that settlement was required to take place on or before either 1 February 1983 or 4 February 1983 - according to the pleadings, the former date was the correct one, but as will be seen it is immaterial which was correct. When the time came for settlement the value of units on the Gold Coast had considerably declined and the purchasers naturally wished to be free of their obligations under the contract. They declined to attend for settlement in February, or on a further date nominated by the vendor - 17 March 1983. By their defence to an action for specific performance brought by the vendor they claimed that they were entitled to rescind the contract and denied that the vendor was ready, willing and able to perform it. Their claim is now based on the contention (first made after the vendor had commenced proceedings) that the vendor could not comply with cl.5 of the contract and persisted in offering to perform the contract in a way different from that which cl.5 required, and that the purchasers were entitled to, and did, treat the vendor's action as a repudiation of the contract.

2. Clause 5 of the contract was in the following terms:

"(a) The Vendor will ensure that prior to
settlement the By-Laws of the Body Corporate
brought into existence upon the registration
of the Plan will grant to the proprietor for
the time being of the said unit the exclusive
use for car parking of that part of the common
property outlined in red on the sketch plan
marked 'B' annexed hereto.
as part of the said unit in the Plan. If the
Vendor so elects then the terms of paragraph
(a) of this clause shall not apply and the
By-Laws to be adopted on registration of the
Plan shall be varied accordingly."
The sketch plan showed that the common property was divided into 165 areas, of which one, No. 7, was outlined in red.

3. By sub-s.(1) of s.30 of the Act, except as provided in that section, the by-laws set forth in the Third Schedule to the Act shall be the by-laws in force in respect of each plan. By sub-s.(2), subject (inter alia) to sub-s.(7), to which reference will later be made, a body corporate may, for the purpose of the control, management, administration, use or enjoyment of the lots and common property the subject of the plan, make by-laws amending, adding to or repealing the by-laws set forth in the Third Schedule or any by-laws made under that subsection. The contract between the parties in the present case made provision for the amendment of the by-laws in the Third Schedule to the Act. It provided, by cl.(9)(i), that the purchasers agree that on the registration of the building units plan the vendor as sole proprietor may -

"(1) Amend the By-Laws of the Body Corporate set
out in the Third Schedule to the said Act in
accordance with the amendments set out in the
Third Schedule hereto and any minor variations
thereof as may seem desirable or necessary".

By cl.21 the purchasers acknowledged that prior to entering into the contract copies of, inter alia, the Third Schedule to the contract, setting out the proposed amendments to the by-laws in the Third Schedule to the Act, were delivered to them and that they accepted the terms thereof. The Third Schedule to the contract, headed "Proposed Alterations to Third Schedule By-Laws", contained by-law 40, which read as follows:

"The proprietor for the time being of each lot
in the building shall be entitled to the exclusive
use for himself and his licensees of the car space
or spaces the identifying number or numbers of
which shall be notified in writing by Dainford
Limited to the Council of the Body Corporate within
twelve months after the date of registration of the
Plan provided that in respect of those car spaces
allocated pursuant to this By-law, the Council is
hereby authorised to vary the allocations so made
and to transpose car spaces from one lot to another
lot at any time and from time to time on the
written request of the proprietor of the lot
involved. Each proprietor to whom exclusive use of
a car space or spaces is given pursuant to this
By-law shall use such space or spaces for the
purpose of car parking only and shall not litter
the same or so use the same as to create a nuisance
but otherwise no such proprietor shall be
responsible for the performance of the duty of the
Body Corporate under Section 38(1)(b)(i)."

4. There was evidence that on settlement the vendor proposed to hand to the purchasers a copy of a notice addressed to the body corporate notifying it that "the Proprietor for the time being of Lot No. 21 is entitled to the exclusive use for himself and his Licencees of car space no. 7", and to lodge with the body corporate the original of the notification forthwith upon settlement having been completed.

5. The submission made on behalf of the purchasers was that by-law 40 as set out in the Third Schedule to the contract did not comply with cl.5(a) of the contract and was in any case not validly made under s.30 of the Act.

6. The provisions of cl.5(a) cannot be construed in isolation; they must be understood in the context provided by the contract as a whole. By cl.(9)(i)(1), the purchasers agreed that the vendor might amend the by-laws in the manner set out in the Third Schedule to the contract, and by cl.21 acknowledged that they accepted the terms of that Third Schedule. In the light of those provisions, cl.5(a) must be understood as imposing on the vendor an obligation to ensure that there are enacted by-laws which grant to the proprietor for the time being of Lot No. 21 the exclusive use for car parking of the part of the common property shown on the plan as space No. 7, but as recognizing that this result may be achieved by enacting by-laws in the form of the Third Schedule, and by giving the notice that by-law 40 requires. If the vendor elected to adopt the alternative course permitted by cl.5(b), the by-laws to be adopted on the registration of the plan were to be varied accordingly. However, if the vendor did not so elect, and cl.5(a) applied, the by-laws which the vendor had to ensure were brought into existence on the registration of the plan might include by-law 40 in the form in which it appears in the Third Schedule to the contract, with or without minor variations. By-law 40 prescribes a method of identifying those parts of the common property to which the respective proprietors of each of the units in the building are to be entitled to use for car parking, and by which each may be granted the exclusive use of a particular part. It would be superfluous to include two by-laws, each of which granted the proprietor of a unit the exclusive use of a part of the common property, and impracticable simultaneously to adopt two different methods to identify the space to which a proprietor was to be entitled. When the parties to the contract permitted the by-laws to be amended to include by-law 40, they must necessarily have contemplated that the by-laws brought into existence on the registration of the plan would not contain, in addition to by-law 40, another by-law which granted to the proprietors of lot No. 21 the exclusive use of the relevant car parking space. It follows that cl.5(a), on its proper construction, was satisfied if the vendor ensured that the by-laws brought into existence on the registration of the plan included by-law 40, and if the vendor further ensured that a notice was given under that by-law identifying the part of the common property outlined in red as that which the proprietor would be exclusively entitled to use as a car park.

7. For these reasons, even if the making of by-law 40 had been unauthorized by s.30 of the Act, the vendor would have complied with its contractual obligations by ensuring that the by-law was made and that the necessary notice was given. In any case, in my respectful opinion, the by-law is valid and effective. Subsection (7) of s.30 provides that "a body corporate may, with the consent in writing of the proprietor of a lot, pursuant to a resolution without dissent make a by-law in respect of that lot conferring on that proprietor the exclusive use and enjoyment of, or special privileges in respect of, the common property or any part thereof upon such terms and conditions ... as may be specified in the by-law ...". By s.30(8), a by-law referred to in s.30(7) "shall, while it remains in force, enure as appurtenant to, and for the benefit of, the lot in respect of which it was made". Section 30(9) refers to the duties of the "proprietor for the time being of a lot in respect of which a by-law referred to in subsection (7) is in force". In the construction of those sections the singular includes the plural, and neither the words of s.30(7) itself, nor those of sub-ss.(8) and (9), indicate that a separate by-law must be made in respect of each lot in the building; a by-law may validly deal with all the lots, provided, of course, that the proprietor of every lot consents in writing - that was the case here since the vendor was the proprietor of all the lots when the by-law was made. The question for decision is whether s.30(7) requires that the by-law shall itself define that part of the common property which is allotted for the exclusive use of the proprietor of a particular lot, or whether it permits the definition to be made by means of a separate instrument, such as the notice contemplated by by-law 40. The subsection does not in terms require that the part of the common property whose exclusive use is conferred on a proprietor shall be identified in the by-law itself. There is no general principle that a power to make by-laws may not be exercised by referring to some other document and incorporating or applying it, provided that what is referred to is sufficiently certain: Wright v. T.I.L. Services Pty. Ltd. (1956) SR(NSW) 413, at pp 421-422; Sobania v. Nitsche (1969) 16 FLR 329, at pp 340-342. There is no reason in principle why a by-law should not confer rights in respect of property which is not defined in the by-law itself, but which can be identified with certainty by reference to another document or to extrinsic facts. By-law 40 itself confers on a proprietor the exclusive use of part of the common property, notwithstanding that the identity of the proprietor, and the part to which he is entitled, must be ascertained by reference to a notice given to the body corporate.

8. Some reliance in argument was placed on s.30(3) of the Act, which in effect requires amending by-laws to be recorded by the Registrar of Titles on the registered plan, and on s.30(8) under which a by-law enures as appurtenant to and for the benefit of the lot in respect of which it is made. It was submitted that these provisions indicate an intention that a by-law made under s.30(7) should itself define the part or parts of the common property to which it refers. However the Act and the Regulations made thereunder define in elaborate detail what shall be contained in a building unit plan (see s.9 and regs.8 and 9) and neither the Act nor the Regulations require either that the plan, or the by-laws, should incorporate a description of that part of the common property which is to be the subject of exclusive use and enjoyment or special privileges. A person interested in discovering what part of the common property is so affected, having been put on notice by by-law 40, can, if a proprietor or mortgagee, as of right, inspect the documents of the body corporate, and, if a prospective purchaser, can obtain the authority of the proprietor to do so (s.40(1)(b)(viii)) and can thus inspect whatever relevant notice has been given under by-law 40. Nothing in the Act and Regulations reveals an intention that a by-law may not be made in terms of by-law 40.

9. It is implicit in what I have already said that by-law 40 does not effect an unauthorized delegation of legislative power. I am not convinced that recourse to the maxim delegatus non potest delegare is of much assistance in deciding upon the validity of an exercise of statutory powers. It is simpler to ask directly whether the power has been exercised by the person upon whom it has been conferred and whether it has been exercised in the manner and within the limits laid down by the statute conferring the power. However, by-law 40 does not delegate to anyone else the power which s.30(7) of the Act gives to the body corporate to make a by-law conferring on the proprietor of a lot the exclusive use and enjoyment of part of the common property. Under by-law 40 the vendor cannot make a by-law, but may give a notice upon which the provisions of the by-law operate. The by-law itself confers (as s.30(7) requires) the right to exclusive use and enjoyment, although it allows the vendor by notice to fix the car space in respect of which the right is conferred on the proprietor of an individual lot.

10. Finally, it was submitted on behalf of the purchasers that in any case the vendor did not either comply or offer to comply with its obligations under cl.5(a) prior to settlement, since what was proposed was that the notice under by-law 40 should be lodged with the body corporate forthwith upon settlement having been completed, and not prior to settlement. It was submitted that the words "prior to settlement" in cl.5(a) meant prior to the date fixed by the contract for settlement or agreed by the parties or fixed by proper notice as the date for settlement. The relevance of this submission was that the by-laws were not registered until 4 February 1983, which on one view was after the date on which settlement should have occurred. However, the contract does not fix a particular date for settlement, but provides that settlement shall take place within a specified period (cl.3(a)). When other provisions refer to "settlement" (e.g. cl.3(c), (d), (e), (f), cl.6(b), cl.18, as well as cl.5(a)) they naturally mean the date on which settlement in fact takes place. Clearly the vendor would have been bound, if the purchasers had insisted upon it, to give the notice to the body corporate before 17 March 1983, if settlement had actually taken place on that day. However, the purchasers did not at any time before the action was commenced inform the vendor that it must give the notice to the body corporate before, rather than immediately after, settlement and there is no reason to believe that the vendor would have failed to give the notice before settlement once it had been pointed out that this was what the contract required. This is not a case in which the vendor persistently maintained an untenable construction of the contract (cf. Summers v. The Commonwealth [1918] HCA 33; (1918) 25 CLR 144, at p 152), or indicated by his conduct that he had formed the fixed intention not to be bound by its provisions in the future (cf. Dimond v. Moore [1931] HCA 12; (1931) 45 CLR 159, at pp 166-169; Rawson v. Hobbs [1961] HCA 72; (1961) 107 CLR 466, at p 480), so as to entitle the purchasers to treat the contract as at an end. The fact that a vendor insists on the wrong construction of a contract does not necessarily mean that he is unwilling to perform it according to its true construction: see Green v. Sommerville (1979) 141 CLR 594, especially at pp 610-611. In the present case the vendor did not even insist upon an erroneous construction of the contract; it did no more than indicate what it intended to do to perform its contractual obligations and although what it proposed involved a departure from that which the contract strictly required, it is quite impossible to regard its conduct as a repudiation which the purchasers were entitled to accept.

11. On 6 August 1984, after judgment had been given by the Full Court of the Supreme Court of Queensland, allowing an appeal from the judgment of G.N. Williams J. who had granted the vendor a decree of specific performance, the by-laws were amended. The relevant by-law now provides that "the proprietors for the time being and from time to time of lots 1 to 165 in Building Units Plan No. 5457 shall have the irrevocable right to the exclusive use and enjoyment for themselves and their licencees of the car spaces allocated to such lots as set out in the attached schedule ...". On behalf of the purchasers it was submitted that the vendor cannot rely on this amendment, and that in any case this by-law also is invalid because it does not incorporate a plan delineating the spaces referred to in the schedule. It follows from what I have already said that a by-law is not invalid for the reason that to apply its provisions it is necessary to have regard to some extrinsic document such as a plan. However, it is unnecessary to consider whether the vendor could support its case by reference to the by-law made after the judgment now under appeal was given, since in my opinion, for the reasons I have given, the vendor was entitled to the decree for specific performance which it sought and obtained from the trial judge.

12. I would allow the appeal and restore the order of the trial judge. However the words "within fourteen days of today" which appear in the order will need to be varied in view of the lapse of time since the order was made.

MASON J. The facts and the relevant provisions are set out in the judgment of Wilson J.

2. The crucial question is whether s.30(7) of the Building Units and Group Titles Act 1980 (Q.) ("the Act"), on its true construction, requires that a by-law made by a body corporate conferring on the proprietor of a lot the exclusive use and enjoyment of a car space, being part of the common property, should itself designate the car space, either directly or by reference to an identification otherwise made before or at the time of the making of the by-law. Of the majority in the Full Court of the Supreme Court, D.M. Campbell J. answered this question in the affirmative, though Shepherdson J. seems to have reached his conclusion on the footing that the body corporate delegated its power under the subsection, contrary to the principle that a delegate cannot delegate his power unless authorized so to do. Unless the question which I have stated is answered in the affirmative, there is no foothold for the operation of the principle. And if the question is answered in the affirmative, by-law 40 is invalid without any need to resort to the delegation principle.

3. The appellant's case is that s.30(7) authorized the making of a by-law which, though expressed in terms of conferring on the proprietors rights to exclusive use and enjoyment, leaves it to the appellant by written notification to be given subsequently to the council of the body corporate to allocate particular car spaces to particular lots, and authorizes the council of the body corporate to vary the allocations so made. The language of the subsection needs to be read in the light of the nature and purpose of the Act and the general dispositions which it makes for the registration of building units and group titles, bringing them within the system of registered Torrens Titles. The subsection must also be read in association with the other provisions of the section. It is significant that a by-law authorized by the section has no force or effect until notification of it is recorded on the registered plan (s.30(3)). And a by-law conferring on a proprietor the exclusive use and enjoyment of any part of the common property enures "as appurtenant to, and for the benefit of, the lot in respect of which it was made" (s.30(8)). These provisions contemplate that the registered plan will contain a notification of the part or parts of the common property which are appurtenant to each lot, just as easements and restrictive covenants are noted in the register books under the various Real Property Acts.

4. If the terms of the by-law identify the relevant part of the common property the notification of the by-law will ensure that the registered plan discloses the part or parts of the common property appurtenant to each lot. The same result will ensue if the terms of the by-law identify the part or parts by reference to an existing document, so long as a copy of the existing document is lodged with notification of the by-law. In the case of a by-law which leaves the relevant parts of the common property to subsequent identification, notification of the making of the by-law will not result in the registered plan disclosing all material information. The consequence is that to leave the matter of identification of appurtenant car spaces for later ascertainment by the appellant and variation by the council of the body corporate will result in the registered plan omitting to contain information which, it seems, it was expected to contain.

5. This factor indicates that s.30(7) does not authorize the making of by-law 40. And an examination of the language of the subsection supports this conclusion. The subsection speaks of a by-law which confers on an individual proprietor the exclusive use and enjoyment of, or special privileges in respect of, the common property or any part of it. A by-law confers such rights or privileges if, and only if, it identifies the property in which the rights or privileges subsist. If the by-law leaves that property for later identification the by-law does not answer the statutory description. Then the rights or privileges arise, not on the making of the by-law, but on that later identification. That this is the intended effect of by-law 40 is made clear by its terms. It speaks of allocation of the car spaces "pursuant to this By-Law", thereby acknowledging that the by-law does not of itself confer the relevant rights.

6. No doubt the conclusion which I have reached produces some inconvenience for the developer who initially controls the body corporate and for the body corporate when it wishes to vary the entitlement of a proprietor to a car space. The requirement in s.30(7) that a resolution be passed "without dissent" may create a formidable obstacle to the passage of a resolution making a by-law relating to car spaces. However, this problem can be alleviated by the making of an appropriate by-law on the registered plan, so long as the developer's vendor enters into contracts of sale of the lots which bind the purchasers to vote for, and not to vote against, a resolution making a by-law giving effect to the intended allocation of car spaces. This may not overcome the problem created by the need for a resolution "without dissent" for a variation of car spaces subsequently agreed to by two proprietors. However, the existence of this problem is not an adequate reason for departing from the natural interpretation of the subsection.

7. I agree with the reasons for judgment of Brennan J. in so far as they relate to the other issues which were argued.

8. In the result I would allow the appeal, set aside the judgment of the Full Court other than the order allowing the appeal to that Court and in lieu thereof order that the action be remitted to the trial judge to determine whether the contract ought now to be specifically performed or whether the respondents should have judgment on their counterclaim.

WILSON J. By a contract of sale dated 30 August 1981 the appellant agreed to sell and the respondents agreed to buy a unit described as Lot 21 on a plan annexed to the contract. The unit was to form part of a multi-storey building called "Imperial Surf" which was proposed to be erected on the Gold Coast in Queensland. The plan by reference to which the unit was identified was a building units plan which was to be registered pursuant to the provisions of the Building Units and Group Titles Act 1980 (Q.) as amended ("the Act").

2. The contract included provisions designed to ensure that the respondents would have exclusive use of a car parking space which would form part of the common property. Those provisions, so far as material, were as follows:

"5.(a) The Vendor will ensure that prior to
settlement the By-Laws of the Body Corporate
brought into existence upon the registration of the
Plan will grant to the proprietor for the time
being of the said unit the exclusive use for car
parking of that part of the common property
outlined in red on the sketch plan marked 'B'
annexed hereto."

"9.(i) The Purchaser agrees that on registration of
the Building Units Plan the Vendor as sole
proprietor may:-

(1) Amend the By-Laws of the Body
Corporate set out in the Third
Schedule to the said Act in
accordance with the amendments set
out in the Third Schedule hereto and
any minor variations thereof as may
seem desirable or necessary;"

The proposed by-laws set out in the Third Schedule to the contract included by-law 40:

"40. The proprietor for the time being of each lot
in the building shall be entitled to the exclusive
use for himself and his licensees of the car space
or spaces the identifying number or numbers of
which shall be notified in writing by Dainford
Limited to the Council of the Body Corporate within
twelve months after the date of registration of the
Plan provided that in respect of those car spaces
allocated pursuant to this By-Law, the Council is
hereby authorised to vary the allocations so made
and to transpose car spaces from one lot to another
lot at any time and from time to time on the
written request of the proprietor of the lot
involved. Each proprietor to whom exclusive use of
a car space or spaces is given pursuant to this
By-Law shall use such space or spaces for the
purpose of car parking only and shall not litter
the same or so use the same as to create a nuisance
but otherwise no such proprietor shall be
responsible for the performance of the duty of the
Body Corporate under Section 38(1)(b)(i)."

3. Section 30 of the Act deals with by-laws. It contains, inter alia, the following provisions:

"(1) Except as provided in this section the
by-laws set forth in the Third Schedule shall be
the by-laws in force in respect of each plan."

"(2) Subject to subsections (7) and (11), a
body corporate, pursuant to a special resolution,
may, for the purpose of the control, management,
administration, use or enjoyment of the lots and
common property the subject of the plan, make
by-laws amending, adding to or repealing the
by-laws set forth in the Third Schedule or any
by-laws made under this subsection."

"(3) An amendment of, addition to or repeal of
the by-laws has no force or effect until the
Registrar of Titles has, pursuant to a notification
in the prescribed form lodged in his office by the
body corporate, recorded the notification on the
registered plan."

"(5) Without limiting the operation of any
other provision of this Act, the by-laws for the
time being in force bind the body corporate and the
proprietors and any mortgagee in possession
(whether by himself or any other person), lessee or
occupier, of a lot to the same extent as if the
by-laws had been signed and sealed by the body
corporate and each proprietor and each such
mortgagee, lessee and occupier respectively and as
if they contained mutual covenants to observe and
perform all the provisions of the by-laws."

"(7) Without limiting the generality of any
other provision of this section, a body corporate
may, with the consent in writing of the proprietor
of a lot, pursuant to a resolution without dissent
make a by-law in respect of that lot conferring on
that proprietor the exclusive use and enjoyment of,
or special privileges in respect of, the common
property or any part thereof upon such terms and
conditions (including the proper maintaining and
keeping in a state of good and serviceable repair
of the common property or that part of the common
property, as the case may be, and the payment of
money by that proprietor to the body corporate) as
may be specified in the by-law and may, in like
manner, make a by-law amending, adding to or
repealing any by-law made under this subsection."

"(8) A by-law referred to in subsection (7)
shall, while it remains in force, enure as
appurtenant to, and for the benefit of, the lot in
respect of which it was made."

4. The relevant building units plan was registered on 31 December 1982. By-laws in the form set out in the Third Schedule to the contract were made by the body corporate early in January and registered by the Registrar of Titles on 4 February 1983. The appellant notified a date for settlement in February 1983 in accordance with the contract but the respondents did not attend. Another settlement date, to occur in March 1983, was notified to the respondents but that date also came and went without any action on the part of the respondents. The appellant then instituted these proceedings in the Supreme Court of Queensland for specific performance. The action succeeded at first instance but an appeal to the Full Court was allowed by a majority (D.M. Campbell, Shepherdson JJ.; W.B. Campbell C.J. dissenting). The decision turned primarily on the question whether by-law 40 was a valid exercise of the power conferred on the body corporate by s. 30(7) of the Act and secondarily on the question whether, in the event that the by-law was beyond power, the parties having contracted on the basis of by-law 40 they could be held to the contract notwithstanding the invalidity of the by-law. The learned trial judge and his Honour the Chief Justice answered both those questions in favour of the present appellant while their Honours who constituted the majority in the Full Court answered them in favour of the respondents.

5. In this Court, counsel for the appellant advanced a number of arguments in support of the appeal but the primary issue is still the question whether the by-law is valid. If that question be answered in favour of the appellant it will not be necessary to turn to the other matters discussed in argument. It is accepted by the respondents that if by-law 40 is valid then it must follow that had they attended at settlement in March 1983 the appellant would have been able to ensure to them as the proprietors of Lot 21 the grant of the exclusive use of car parking space No. 7 in accordance with cl. 5(a) of the contract and the ground taken by them for resisting an order for specific performance would disappear.

6. The view which prevailed in the Full Court was that in making by-law 40 the body corporate had sub-delegated to Dainford Limited a power which it was not authorized to sub-delegate, namely, the power to identify the number of the car space allocated to the proprietor for the time being of each of the 165 lots in the building. In the course of his reasons for judgment, Shepherdson J., with whose reasons D.M. Campbell J. agreed, referred to the principles expressed by a Full Court of the Supreme Court of New Zealand in Geraghty v. Porter (1917) NZLR 554 and found them to apply to the present case. In that case, the Court said, at p 556:

"In making regulations such as these the Governor
is exercising a delegated power of legislation.
Such a delegated authority must be exercised
strictly in accordance with the powers creating it:
Halsbury's Laws of England Vol. xxvii, p. 124,
s. 217; and in the absence of express power to do
so the authority cannot be delegated to any other
person or body. The rule on the subject is
expressed in the maxim Delegatus non potest
delegare, and is of general application, although
the cases in which for the most part it has been
applied have been those arising out of the relation
of principal and agent."

This passage was endorsed as a correct statement of the rule by the Court of Appeal in New Zealand in Hawke's Bay Raw Milk Producers Co-operative Co. Ltd. v. New Zealand Milk Board (1961) NZLR 218, at p 223 ("the Milk Board case"), where the matter is discussed at some length and references are made to decisions of the Supreme Court of Canada (Reference re Regulations (Chemicals) under War Measures Act (1943) 1 DLR 248; Attorney-General of Canada v. Brent (1956) 2 DLR (2nd) 503) and other New Zealand decisions. It is clear that the maxim does not state a rule of law. It is a rule of construction, requiring the statutory provision which confers the power to be considered in the context of the purposes and objects of the enactment. The Milk Board case was a clear one. The Governor-General was empowered, from time to time, by Order in Council, in accordance with recommendations made by the New Zealand Milk Board to the Minister, to fix the prices at which milk produced or sold for human consumption may be bought or sold. In purported exercise of this power, the Governor-General made an Order in Council to the effect that:

"the Minister may, after consultation with the
Board, from time to time by notice to the parties
concerned fix the town milk producer price."

The Court of Appeal, referring to the statutory provision said, at p. 223:

"It contains no express power of delegation nor
does the language used permit of the implication of
any such power. Since a power to delegate to the
Minister the fixing of the price was not conferred
either expressly or by necessary implication, it
follows that the function professed to be conferred
on the Minister by cl. 4 is not authorised by
the statute."

The Court then added a statement which clarifies the limits of the operation of the principle, saying:

"The principle enunciated in Geraghty v. Power
(sic) ... does not preclude the making of
regulations which confer on a subordinate body or
official authority to make decisions and exercise
discretionary powers within the limits prescribed
by the regulations; but it is always to be borne in
mind that the legislative power itself cannot be
deputed. It seems to us that this distinction has
been recognized, and we think correctly recognized,
in the cases subsequent to Geraghty v. Power
(sic)."

In my opinion, this is a correct statement of the law.

7. In Van Gorkom v. Attorney-General (1977) 1 NZLR 535, Cooke J. upheld the validity of a regulation made under the Education Act 1964 (N.Z.) which empowered the Minister to

"lay down from time to time the general conditions
governing payment of removal expenses including
household articles which may be included in the
removal, the cost of the conveyance of the teacher
and his family, and the extent to which
accommodation and other expenses may be paid."

Earlier subclauses in the regulation conferred rights to actual and reasonable expenses. The Act in question conferred on the Governor-General the power to make regulations for, inter alia,

"Prescribing rates of allowances that may be paid
towards the cost of, or incidental to, the removal
of teachers on transfer from one school to another"

and

"Prescribing such other matters relating to the
conditions of employment of teachers as may be
necessary to give definition to the administration
of this Part of this Act."

His Honour held that the regulation did not purport to delegate either the legislative function itself or the precise matter entrusted by the statute to the Governor-General. It contemplated matters of administrative machinery. His Honour continued, at p. 540, that:

"it is clear that the mere fact that the regulation
delegates discretionary authority is not an
objection to its validity. I do not read
subcl (9) of reg 16 as purporting to authorise
the taking away or cutting down of the rights to
actual and reasonable expenses given by earlier
subclauses; but its wording shows, in my view, that
it does give the minister authority to settle the
kinds of expenses to be treated as reasonable ..."

8. It is against this background of principle and illustrative cases that I turn to the construction of s. 30(7) of the Act. It is apparent that the legislature recognized the importance of the subject-matter that is being dealt with. The grant of the exclusive use and enjoyment of, or special privileges in respect of, the common property or any part thereof requires the making of a by-law, with the consent in writing of the proprietor of the lot, pursuant to a resolution passed without dissent. The by-law must specify any terms and conditions to which the grant is subject. Finally, the by-law may only be amended, added to or repealed by a by-law made in like manner. There is clearly no power, express or implied, conferred on the body corporate to delegate to another person the power to confer on a proprietor of a lot the rights in respect of the common property which are referred to in the subsection. That power can be exercised only by the making of a by-law attended by the prescribed formalities. The criticism that is made of by-law 40 by the respondents is that it fails to meet that test. It is said that it is beyond the power of the body corporate in exercising the power given to it by s. 30(7) to "sub-delegate" to Dainford Limited the responsibility of identifying the particular car space that is allocated to each proprietor. I am unable to accept the argument. Section 30(7) does not require the by-law made pursuant to its provisions to contain a detailed description of the part of the common property that is to be the subject of the special rights granted by it. What is essential is that the by-law itself be the authority for the exercise over a part of the common property of the rights that are granted in respect of it. In my opinion, by-law 40 satisfies such a requirement. It confers on each proprietor the right to exclusive use of such part of the common property as is to be identified in a particular way, namely, by notification to the Council of the body corporate within a stated time. It is the by-law and not the notification that is the source of the right to exclusive use. Similarly, the authority which the by-law confers on the Council to vary the initial allocations on the written request of the proprietor of any lot involved merely completes the administrative structure by which the exercise of the power conferred on the body corporate by s. 30(7) is to be implemented. The power to include in the by-law such authorizations as are necessary or agreeable to its implementation is clearly to be implied from the grant of the primary power. Indeed, if the initial allocation of car spaces among 165 proprietors and any subsequent changes were required to be effected only by specific enumeration in a by-law attended with the formalities required by s. 30(7) the legislative scheme would be unworkable. In my opinion, the Act does not require such a construction.

9. Shepherdson J. was influenced in his consideration of the matter by the legislative character that normally attaches to the process of making by-laws and the importance of any by-law made by a body corporate being available for search by any member of the general public in the office of the Registrar of Titles (cf. s. 30(3)). It was clearly the intention of the legislature that by-laws made by a body corporate should be noted in the office of the Registrar of Titles but I fail to see the same significance attaching to the precise allocation of car spaces among the members of the body corporate. There is no such public interest in the detailed administration of the affairs of a body corporate as to require such details to be made a matter of public record. If any proprietor or mortgagee of a lot desires access to the information then it is available to them at the office of the body corporate (see s. 40). Furthermore, if it matters, it may be questioned whether the power conferred by s. 30(7) is properly to be regarded as a delegation to the body corporate of legislative power. The by-laws which are made in exercise of that power are not of general application; they bind only the body corporate itself and the proprietors and any mortgagee in possession, lessee or occupier of a lot to the extent described in s. 30(5). However, the matter need not be pursued.

10. I would allow the appeal, and restore the decision of the trial judge.

BRENNAN J. This is a vendor's action for specific performance of a contract for the sale of an estate in fee simple in a unit "together with such rights as are appurtenant thereto" in a building known as "Imperial Surf" at the Gold Coast in Queensland. The contract was made before the building was complete and before the building unit plan was registered under the Building Units and Group Titles Act 1980 (Q.) ("the Act"). The unit was to be known as Lot 21. Clause 5(a) of the contract provided:

" The Vendor will ensure that prior to
settlement the By-Laws of the Body Corporate
brought into existence upon the registration of
the Plan will grant to the proprietor for the
time being of the said unit the exclusive use for
car parking of that part of the common property
outlined in red on the sketch plan marked 'B'
annexed hereto."

The Third Schedule of the Act provides a model set of by-laws in force in respect of each building unit plan (s.30(1)). The model set of by-laws may be amended, added to or repealed pursuant to a special resolution of a general meeting of the body corporate "for the purpose of the control, management, administration, use or enjoyment of the lots and common property" (s.30(2)). A power to make a by-law conferring on the proprietor of a lot "the exclusive use and enjoyment of, or special privileges in respect of, ... any part" of the common property is conferred by s.30(7) to which s.30(2) is subject. A by-law made under s.30(7) enures "as appurtenant to, and for the benefit of, the lot in respect of which it was made" (s.30(8)). The contract contained an agreement by the purchasers (cl.9(i)(1)) that the vendor, on registration of the Building Units Plan, might amend the model by-laws in accordance with a schedule of amendments contained in the contract. The purchasers acknowledged that they accepted the terms of the proposed amendments (cl.21(c)). The proposed By-law 40 read as follows:

" The proprietor for the time being of each lot
in the building shall be entitled to the
exclusive use for himself and his licensees of
the car space or spaces the identifying number or
numbers of which shall be notified in writing by
Dainford Limited to the Council of the Body
Corporate within twelve months after the date of
registration of the Plan provided that in respect
of those car spaces allocated pursuant to this
By-Law, the Council is hereby authorised to vary
the allocations so made and to transpose car
spaces from one lot to another lot at any time
and from time to time on the written request of
the proprietor of the lot involved. Each
proprietor to whom exclusive use of a car space
or spaces is given pursuant to this By-Law shall
use such space or spaces for the purpose of car
parking only and shall not litter the same or so
use the same as to create a nuisance but
otherwise no such proprietor shall be responsible
for the performance of the duty of the Body
Corporate under Section 38(1)(b)(i)."

2. A by-law in these terms was made after the plan was registered. The solicitors for the vendor proposed that the vendor's obligation under cl.5(a) of the contract should be performed by handing to the solicitors for the purchasers on settlement a "copy of the notice addressed to the Secretary of the Body Corporate notifying the car space allocated to your client". They undertook to lodge with the Secretary of the Body Corporate the original of that notification forthwith upon settlement having been completed. The proposed notification read as follows:

" We hereby notify you pursuant to the Third
Schedule By-Law No.40 the Proprietor for the time
being of Lot No.21 is entitled to the exclusive
use for himself and his Licencees of car space
no.7."

No.7 was the car space outlined in red on the plan marked "B" annexed to the contract.

3. The settlement date was ultimately fixed by the solicitors for the vendor at 17 March 1983. The purchasers refused to settle. On 21 March 1983, the vendor sued for specific performance in the Supreme Court of Queensland. By an amended defence delivered on 3 October 1983, shortly before the trial commenced, the purchasers pleaded that the vendor had not -

" been in a position to give to the defendants the
exclusive use of the car parking space ... as the
exclusive use of that space has not been created
in favour of the proprietor for the time being of
lot number 21, according to the requirements of
Section 30 of the Building Units and Group Titles
Act."

The plea failed at first instance. G.N. Williams J. decreed specific performance. On appeal, the Full Court (D.M. Campbell and Shepherdson JJ., W.B. Campbell C.J. dissenting) upheld the plea, dismissed the vendor's action and ordered that judgment be entered for the purchasers on their counterclaim for the return of the deposit with interest.

4. The reason advanced for saying that the vendor's proposal to give a written notice to the Body Corporate would not confer on the proprietor of Lot 21 the exclusive use of car space no.7 is that By-law 40 is invalid. It is said to be invalid for want of conformity with s.30(7) of the Act. Section 30(7) provides:

" Without limiting the generality of any other
provision of this section, a body corporate may,
with the consent in writing of the proprietor of
a lot, pursuant to a resolution without dissent
make a by-law in respect of that lot conferring
on that proprietor the exclusive use and
enjoyment of, or special privileges in respect
of, the common property or any part thereof upon
such terms and conditions (including the proper
maintaining and keeping in a state of good and
serviceable repair of the common property or that
part of the common property, as the case may be,
and the payment of money by that proprietor to
the body corporate) as may be specified in the
by-law and may, in like manner, make a by-law
amending, adding to or repealing any by-law made
under this subsection."

5. Section 30(7) is the only provision which authorizes the making of a by-law conferring on the proprietor of a lot the exclusive use and enjoyment of, or special privileges in respect of, common property. Section 30(2) authorizes the making of by-laws for the purpose, inter alia, of the use or enjoyment of common property, but not for the purpose of conferring the exclusive use of part of the common property on the proprietor of a particular lot and thereby withdrawing that part from use by others. The stringent requirement that a by-law under s.30(7) be made pursuant to a resolution without dissent as well as with the assent in writing of the proprietor of the relevant lot makes it clear that a power to amend the model set of by-laws for the purpose of conferring exclusive use of part of the common property on the proprietor of a lot can be found only in s.30(7). In their context, the introductory words of s.30(7) "without limiting the generality of the foregoing" do not release the specific power conferred by that subsection from the conditions on its exercise therein prescribed: see Anthony Hordern & Sons Ltd. v. Amalgamated Clothing and Allied Trades Union of Australia [1932] HCA 9; (1932) 47 CLR 1, per Gavan Duffy C.J. and Dixon J. at p 7; and cf. Leon Fink Holdings Pty.Ltd. v. Australian Film Commission (1979) 141 CLR 672, per Mason J. at pp 678-680 and per Aickin J. at p 680.

6. When By-law 40 was made, it did not confer exclusive use and enjoyment of any part of the common property on the proprietor of any lot. The conferring of exclusive use of car spaces under By-law 40 awaited the written notice which was to be given ("shall be notified") by the vendor to the Council of the Body Corporate. If a notice were given, By-law 40 purported to confer exclusive use of the parts of the common property to be identified in the notice on the respective proprietors of the lots to whom the car spaces were allocated by the vendor. There is a significant difference between a by-law which refers to or incorporates a document specifying the property and the lot in respect of which the power conferred by s.30(7) is being exercised, and a by-law which purports to confer a right with respect to common property to be specified in a document yet to be produced on the proprietor of a lot to be specified in that document. In the former case, the holder and the subject matter of the right are specified by the maker of the by-law, even if the document referred to or incorporated in the by-law had been made by another person (cf. Wright v. T.I.L. Services Pty.Ltd. (1956) SR(NSW) 413, per Walsh J. at pp 421-422; Sobania v. Nitsche (1969) 16 FLR 329, per Gibbs J. at p 342). In the latter case, the holder and the subject matter of the right are specified by the maker of the document. By-law 40 falls into the latter category. The vendor was purportedly authorized to specify the parts of the common property and the respective lots whose proprietors were to have exclusive use of those parts. I am unable to construe s.30(7) as authorizing the making of a by-law which gives to a person a power to produce a document having the effect of appropriating a part of the common property specified by that person to the exclusive use of the proprietor of a lot specified by him. The power to appropriate common property to the exclusive use of the proprietor of a lot is reserved to the body corporate making a by-law pursuant to a resolution passed without dissent. I construe s.30(7) as requiring the by-law itself to specify the part of the common property which is appropriated to exclusive use by the proprietor of a lot and the lot in question. As the by-law must be recorded on the registered plan (s.30(3)), the register containing those particulars will be more informative. That consideration is not conclusive, but it tends to confirm the view that a by-law is invalid if it does not itself specify the relevant common property and the relevant lot. In my opinion By-law 40 is invalid.

7. However, the invalidity of By-law 40 is relevant only to the question whether the vendor was ready and willing to perform its obligation under cl.5(a) or, conversely, whether it had repudiated that obligation. The purchasers had consented to the making of that by-law (cl.9(i)(1)) and they had accepted its precise terms (cl.21(c)). It may be inferred that the purchasers expected that the making of By-law 40 and the giving of a notice to the Body Corporate in pursuance of the terms of that By-law would be the means by which the vendor would seek to perform its obligation under cl.5(a). The expectation was fulfilled, but was the obligation performed? The obligation imposed on the vendor by cl.5(a) was not an obligation to make By-law 40; it was an obligation to make or to procure the making of a by-law which would grant - that is, a by-law which would effectively grant - the exclusive use of car space no.7 to the proprietor of lot 21. Only a by-law made under s.30(7) could have that effect; only such a by-law would "enure as appurtenant to, and for the benefit of, the lot" (s.30(8)). The purchasers' consent to and acceptance of the terms of the proposed By-law 40 is not tantamount to a stipulation that, upon the making of By-law 40 and the giving of a notice in accordance with its terms, the vendor should be or be deemed to be discharged from his obligation under cl.5(a) whether or not those steps were effective to grant the exclusive use of parking space no.7 to the proprietor of lot 21. The common expectation of the parties that those steps would be effective does not dissolve the obligation if the expectation turns out to be ill-founded. A mistake of law shared by the parties as to what is effective to grant a right the subject matter of a sale does not relieve a vendor from the obligation of doing or having done what is effective to grant the right. And if the purchaser does not do or have done what is effective to grant the right, he cannot give the purchaser what the purchaser contracted to buy. In this case the purchaser had contracted to buy, inter alia, exclusive use of car space no.7 - a right which, being granted by by-law, would bind the body corporate, the proprietors, any mortgagee in possession, and any lessee or occupier of a lot (s.30(5)). As the making of By-law 40 and the giving of a notice were not effective steps to confer that right, it is not to the point that the parties had expected that those steps would be effective. Even if cll.9(i)(1) and 21(c) were construed as a stipulation that the obligation created by cl.5(a) should be performed by taking those steps, the stipulation would be inconsistent with the clear intention of the parties as expressed in cl.5(a). When the intention of the parties can be clearly collected from the language used in a contract, a provision that is inconsistent with that intention must be rejected as superfluous: Gwyn v. Neath Canal Co. (1868) LR 3 Ex 209, at p 215; Walker v. Giles [1848] EngR 20; (1848) 6 CB 662, at pp 701-702 [1848] EngR 20; (136 ER 1407, at pp 1423-1424). But where a provision admits of a construction that does not attribute to it the character of a stipulation inconsistent with the clear intention of the parties, that construction is to be preferred. In this case, cll.9(i)(1) and 20(c) may be regarded as providing no more than the purchasers' consent to the amending of the by-laws in the terms set out in the contract, leaving the vendor's obligation under cl.5(a) unaffected. I would so construe those provisions.

8. As the giving of a notification pursuant to By-law 40 would not be effective to confer exclusive use of car space no.7 on the proprietor of lot 21, the course proposed by the vendor's solicitors would not satisfy the vendor's obligation under cl.5(a). Yet the decree of specific performance made by G.N. Williams J. ordered the purchasers to settle the contract without obtaining a grant by by-law of exclusive use of car space no.7. That decree cannot be allowed to stand, but that conclusion does not fully dispose of the action. In the circumstances of this case, it is necessary to determine whether a different decree for specific performance should be made - a decree moulded to give effect to the true construction of the contract - or whether the deposit should be ordered to be returned to the purchasers consequent on a rescission of the contract. It is one thing to say that the vendor had not offered to give the purchasers on 17 March 1983 a title which carried exclusive use of car space no.7; it is another thing to say that the vendor was in breach of an essential term of the contract on 17 March 1983, or that it was not ready and willing to perform the contract when judgment was given after the trial, or that it had repudiated the contract by evincing an intention to fulfil the contract only in a manner substantially inconsistent with its obligations and in no other way.

9. The vendor was, it seems, always in a position to have a by-law made under s.30(7) that would have satisfied its obligation under cl.5(a) but, regarding By-law 40 as sufficient and appropriate for the purpose, it did not have another by-law made until after the Full Court gave judgment for the purchasers. Then, as appears from an affidavit filed in this Court, the vendor had a by-law made and registered which would have satisfied its obligation under cl.5(a) as the Full Court defined that obligation and as I would define it. Of course, the new by-law came too late if the contract had been rescinded for an actual breach of an essential term or if the vendor had repudiated the contract and the repudiation had been validly accepted before the new by-law was made: Dimond v. Moore [1931] HCA 12; (1931) 45 CLR 159. Clause 5(a) is clearly an essential term of the contract.

10. Although the vendor was in a position to convey the title contracted for by exercising its powers to have a new by-law made under s.30(7), the vendor did not have to be ready to convey a title carrying exclusive use of car space no.7 until the time of settlement (cf. Bell v. Scott [1922] HCA 13; (1922) 30 CLR 387). The vendor's obligation was to ensure that a by-law under s.30(7) was brought into existence "prior to settlement". "Settlement" in the contract is used to describe the event of settlement, not the date fixed for settlement. For example, provision is made for interest "on late settlement". The vendor was not in breach of its obligation under cl.5(a) of the contract unless, being called on by the purchasers to settle, the relevant by-law was not then in existence. The purchasers did not call on the vendor to settle. They refused to settle on the date fixed by the vendor's solicitors. It follows that the vendor's failure to ensure that the relevant by-law was brought into existence is not an actual breach of its obligation under cl.5(a). The next question is whether the vendor repudiated the contract by evincing an intention to perform its obligation under cl.5(a) only in a manner substantially inconsistent with its terms.

11. The question whether the vendor's failure to ensure that the relevant by-law was brought into existence before judgment establishes that the vendor was not then ready and willing to perform the contract and that it had repudiated the contract is a question which has not been answered. Sometimes it is right to find that a party who adopts an erroneous construction of a contract and who intends to act in accordance with that construction in fulfilling the contract is not ready and willing to perform the contract and has evinced an intention to perform the contract only in a manner substantially inconsistent with its terms. But "there are other cases in which a party, though asserting a wrong view of a contract because he believes it to be correct, is willing to perform the contract according to its tenor. He may be willing to recognize his heresy once the true doctrine is enunciated or he may be willing to accept an authoritative exposition of the correct interpretation" (D.TR Nominees Pty.Ltd. v. Mona Homes Pty.Ltd. [1978] HCA 12; (1978) 138 CLR 423, at p 432; and see Green v. Sommerville (1979) 141 CLR 594, at pp 600-601, 610). When an erroneous construction of the contract arises from a mistake of law that is common to the parties, it is difficult to infer repudiation from a party's assertion that it intends to perform the contract by doing what both parties erroneously believe to be required to perform it, at least until the mistake is exposed.

12. At the trial, G.N. Williams J. did not find it necessary to explore the question whether the vendor evinced an intention to perform the contract only in a manner substantially inconsistent with its terms. His Honour's view was that the vendor's proposed manner of performance was in accordance with the terms of the contract. And so he did not find it necessary to decide whether, if the vendor had evinced such an intention, the purchasers were willing to perform the contract and thus entitled to accept the repudiation (see Rawson v. Hobbs [1961] HCA 72; (1961) 107 CLR 466, at pp 480-482; D.T.R. Nominees Pty.Ltd. v. Mona Homes Pty.Ltd., at p 433). But if By-law 40 is invalid, the questions of repudiation and entitlement to rescind must be determined before the issues arising on the pleadings are determined. The findings of fact necessary to determine them have not been made. The question whether the vendor had repudiated its obligation under cl.5(a) is a question of fact that depends on all the circumstances of the case (per Walsh J.A. in Satellite Estate Pty.Ltd. v. Jaquet (1968) 71 SR(NSW) 126, at p 140). In the present case, the chief factor bearing on that question must be the vendor's conduct from the time when the amended defence raised the true construction of the contract shortly before the trial commenced until the conclusion of the trial when the vendor's attitude to its obligation under cl.5(a) must have been manifest.

13. Should the outstanding issues be determined by this Court or by the Supreme Court? It does not clearly appear that this Court has all the relevant facts before it, nor has it had the benefit of full argument on the facts. It is necessary then to remit the matter to the Supreme Court in order that those issues be determined: cf. White v. Cabanas Pty.Ltd. (1968) 42 ALJR 111. If the Court holds that it would have been appropriate to make a decree of specific performance at the conclusion of the trial, albeit not in the terms of the decree made by the learned trial judge, it may be necessary to consider also whether, by reason of events occurring after that time, the vendor has lost the right to a decree.

14. In my opinion the appeal should be allowed. I would set aside the judgment of the Full Court other than the order allowing the appeal to that Court and in lieu thereof order that the action be remitted to the learned trial judge to determine whether the contract ought now to be specifically performed or whether the purchasers should have judgment on their counterclaim. I would allow the respondents the costs of this appeal and I would order that the costs of all other proceedings abide the result of the further hearing.

DAWSON J. I agree with the Chief Justice and Wilson J. that the appeal should be allowed and I agree generally with the reasons given by each of them. I agree with the Order proposed by the Chief Justice.

ORDER

Appeal allowed with costs.

Set aside the order of the Full Court of the Supreme Court of Queensland and in lieu thereof order that the appeal to that Court be dismissed with costs, but that the order of G.N. Williams J. be varied by substituting for the words "within fourteen days of today" the words "within fourteen days of 28 March 1985" and by substituting for the words "within three (3) calendar months of today's date" the words "within three (3) calendar months of 28 March 1985".