Symes v The Proprietors Strata Plan No 31731 [2003] NSWCA 7 (7 February 2003)

Last Updated: 10 February 2003

NEW SOUTH WALES COURT OF APPEAL

CITATION: Symes v The Proprietors Strata Plan No 31731 [2003] NSWCA 7

FILE NUMBER(S):

40540/01

HEARING DATE(S): 12 November 2002

JUDGMENT DATE: 07/02/2003

PARTIES:

Douglas Symes (Appellant)

The Proprietors Strata Plan No 31731 (Respondent)

JUDGMENT OF: Sheller JA Heydon JA McClellan J

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S): SC 1987/00

LOWER COURT JUDICIAL OFFICER: Barrett J

COUNSEL:

Mr M D Young (Appellant)

Mr M A Bradford (Respondent)

SOLICITORS:

David Le Page (Appellant)

Alex Ilkin & Co (Respondent

CATCHWORDS:

Equity - appeal - strata plan - body corporate - dividing wall - water penetration - responsibility for rectification - common property - Strata Titles Board - finding of fact - whether trial judge can decide a question that did not appear in the stated case - no evidence - Coulton v Holcombe - notice of contention - case stated technique

LEGISLATION CITED:

Strata Schemes Management Act 1996

Strata Titles Act 1973

Supreme Court Act 1970

DECISION:

See paragraph 84

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40540/01

SC 1987/00

SHELLER JA

HEYDON JA

McCLELLAN J

7 February 2003

SYMES v THE PROPRIETORS STRATA PLAN NO 31731

Judgment

1 SHELLER JA: I agree with Heydon JA.

2 HEYDON JA: This is an appeal from orders of Barrett J made on 27 June 2001. The matter came to him in the following way.

3 On 7 January 1987 Strata Plan No 31731 was registered. It comprised an eleven storey building in Wollongong constructed in about 1986.

4 In August 1994 Douglas Symes purchased Unit 32 in the building. It comprised an area of the building on level 10 and another area on level 11. Mr Symes, after entering occupation, noticed that the area on level 11 suffered from water penetration. Since that time, he, as owner of Unit 32, and the body corporate, the Proprietors - Strata Plan No 31731, have been in dispute about whether he or it is responsible for rectifying that problem.

5 Mr Symes' lot 32 occupies only part of level 11. The eastern side of lot 32 is contiguous with lot 34 (owned by Mr Manning). The wall between them is known as "the No 3 wall". On Mr Symes' side of the wall, ie on the western side of the wall, is a deck (ie an open balcony) and a sunroom. There is a northern wall separating the sunroom from the deck which is known as "the No 2 wall".

6 Strata Plan No 31731 was registered under the Strata Titles Act 1973. That Act created a system of divided ownership of land. It provided for land, including the whole of the building, to be subdivided into lots, or lots and common property, by the registration of a plan as a strata plan: s 7(2). On registration of the strata plan any common property vested in the body corporate: s 18. The estate or interest of the body corporate in common property was to be held by it as agent for the proprietors of all the lots: s 20. The body corporate was to be constituted by the proprietors of the lots and to have control, management and administration of the common property: s 54 and s 68.

7 On 1 March 1996 the Strata Titles Commissioner made an order under s 105 of the Strata Titles Act 1973 requiring the body corporate to comply with s 68(1)(b) of the Act and take such action as was necessary "to rectify the water penetration problem through the common property concrete floor or at floor level into the lot known as Unit 32 in Strata Plan 31731." Section 68(1)(b)(i) provided:

"A body corporate shall, for the purposes of the strata scheme concerned -

...

(b) properly maintain and keep in a state of good and serviceable repair -

(i) the common property ...."

The equivalent provision now in force is s 62(1) of the Strata Schemes Management Act 1996.

8 Section 105(1) provided:

"... The Commissioner may, pursuant to an application of a body corporate, a managing agent, a proprietor, any person having an estate or interest in a lot or an occupier of a lot in respect of a strata scheme, make an order for the settlement of the dispute, or the rectification of a complaint, with respect to the exercise or performance of, or the failure to exercise or perform, a power, authority, duty or function conferred or imposed by this Act ... in connection with that strata scheme ...."

9 The body corporate appealed to a Strata Titles Board (constituted by a magistrate).

10 On 30 April 1997 the Strata Titles Board allowed the appeal. In the case which it stated to Barrett J, it described the relevant contentions as follows:

"On appeal to the Board, The Proprietors - Strata Plan No 31731 (the Body Corporate) contended that:-

(i) there was no water actually penetrating through the concrete slab.

The Board dismissed this ground of appeal and ordered the Body Corporate to investigate and take such action as necessary to rectify the water penetration problem through the common property concrete floor of level 11 into the ceiling of level 10 of Unit 34

(Determination 1).

(ii) if there was water penetration at floor level of level 11, then it was not the responsibility of the Body Corporate.

The Board upheld this ground of appeal (Determination 3).

A further matter arising from the original application to the Commissioner, was raised before the Board, that there was water penetration through the external eastern wall [ie wall 3] into Unit 32 on level 11 for which the body Corporate was responsible.

The Board dismissed this application (Determination 3).

The request to state a case relates to Determinations 2 and 3 above, made by the Board on 30 April 1997."

11 The case stated expressed the holdings in relation to Determinations 2 and 3 as follows:

"I held that:

In relation to Determination 2:-

(i) The stipulated conditions attached to the local council approval for the construction of the sunrooms on Level 11 of the building were never complied with during the life of the approval, or since.

(ii) The sunroom was not legally constructed for habitable use.

(iii) The lack of a rebate to the sunroom is not a defect in the original common property concrete slab on level 11 of the building, and was not integral to the slab.

(iv) The Body Corporate is not liable to rectify the water penetration into the sunroom at floor level.

In relation to Determination 3:-

(v) Given the grounds of Determination 2 above, the common walls on level 11 of unit 32, including the eastern wall [ie wall 3] do not bound approved habitable rooms.

(vi) The eastern wall is exempted from compliance with the waterproofing standards for habitable use set by the Building Code of Australia that it be impervious to water penetration.

(vii) The Body Corporate is not liable to rectify water penetration, if there be any, through the eastern wall [ie wall 3]."

12 These findings made the matter very much more serious, from Mr Symes' point of view, than it had been before. Unless these findings were overcome in some way, they left him with a unit which had something worse than a water penetration problem - they left him with a cloud on his title to that unit.

13 The date of the case stated by the Strata Titles Board was 13 March 2000. The length of the time which ran from 30 April 1997 to 13 March 2000 excites surprise. This Court was told that there were four or five days of argument before the Strata Titles Board about the form of the case stated, but no explanation was offered.

14 Barrett J heard the matter on 26 and 27 April and 1 May 2001. On 27 June 2001 he ordered that the appeal be dismissed with costs. He also made a declaration, the terms of which will be considered below.

15 Mr Symes' appeal against the orders of Barrett J is brought by leave granted by Meagher and Shepherd JJA on 22 March 2002.

Barrett J's reasoning

16 Barrett J said that a fundamental issue was whether any part of the building relevant to water penetration was common property. If it was, the body corporate's duty under s 68(1)(b)(i) would be attracted; if not, not.

17 The trial judge reached the following conclusion:

"the Board should have concluded, as a matter of law, that none of the No 2 wall, the No 3 wall and the surface tiles were within the statutory definition of `common property'. The Board should also have concluded, as a matter of law, that the obligation of the body corporate arising under s 68(1)(b)(i) did not apply to any of those items. The way in which the Board reached the conclusion that the body corporate was not liable to rectify the water penetration at either point was erroneous in point of law, even though the conclusion itself was correct."

He did not say why the way in which the Board reached that conclusion was erroneous.

18 In consequence the trial judge, apart from dismissing Mr Symes' appeal with costs, made the following declaration:

"The parts of the building referred to in the reasons as the No 2 wall, the No 3 wall and the surface tiles are not common property, with the result that the respondent, as body corporate, was not obliged by s 68(1)(b)(i) of the Strata Titles (Freehold Development) Act 1973 to repair any of them."

(The declaration operates on the assumption that by the relevant time, that provision had replaced s 68(1)(b)(i) of the Strata Titles Act 1973.)

Ground of appeal 1: "The No 2 Wall"

19 This ground was as follows:

"There being no issue before him arising on the stated case as to the status of the No 2 wall (and no issue on the hearing before him), the trial judge erred in making a declaration about its status."

20 Mr Symes argued that the only wall to which Determination 2 and Determination 3 related was the No 3 wall, which the case stated described as "the external eastern wall in the Unit 32 on level 11" and "the eastern wall". Nothing in the case stated relates to the No 2 wall. He argued that there was no issue about whether it was common property; it was common ground that it was not common property. Accordingly, it was wrong for the trial judge to declare that it was not common property.

21 The body corporate submitted:

"The Trial Judge found that the stated case was insufficient in that it did not, among other things, clearly identify the parts of the building which were causative of water penetration (Red 34H-O)."

The passage referred to in the trial judge's reasons for judgment was:

"Determination 2 refers to water penetration `at floor level'. The floor is of concrete construction with a covering of ceramic tiles. I shall refer to these as `the surface tiles'. It does not appear to be clear from the Board's determination whether water entered between the base of the wall and the surface of the floor (whether it be concrete or tiles at that point) or between the underside of the surface tiles and the upper surface of the concrete. Both possibilities must therefore be addressed."

The submission of the body corporate continued:

"For reasons which the Respondent will elaborate upon below, it was thus open to the Trial Judge to identify those parts for the purpose of determining whether common property was involved."

There was in fact no further elaboration of the point.

22 In my opinion Mr Symes is correct and ground 1 is made good. The body corporate did not controvert the proposition that it was common ground that the No 2 wall was common property and that no issue arose on that question.

Grounds of appeal 2-10: No 3 wall

23 These grounds of appeal were as follows:

"2. The trial judge erred in law on the hearing before him of the stated case in finding and declaring that the No 3 wall was not common property when:

(a) it had been common ground before the Strata Titles Board below that the No 3 wall was common property;

(b) the Stated Case stated as a found fact (`2(xxiv)') that that wall was common property;

(c) there was no challenge to that finding of fact raised in or on the Stated Case;

(d) no such issue arose for the Court's determination on the Stated Case.

3. The trial judge further erred in that the respondent should not have been permitted to argue before him that the No 3 wall was not common property when it had been common ground before the Strata Titles Board that it was common property, thereby precluding such argument on the principle that they were bound by their conduct of the case below.

4. The trial judge erred in dismissing the appellant's objection on ground 3 because it `was so central to proceedings before the Board'.

5. The trial judge further erred in making his finding and declaration based on findings of fact not found or stated in the Stated Case.

6. He further erred in that even had the respondent challenged finding of fact 2 (xxiv) in the Stated Case that the No 3 wall was common property (which it had not), it could only be challenged as an error of law if it had shown there was no evidence to support such finding of fact whereas His Honour:

(a) failed to approach the issue by the no evidence test;

(b) instead approached the issue by the conventional civil test on the balance of the evidence;

(c) in (b) relied on original evidence before the Board which lay outside the facts found in the Stated Case.

7. Further to 6, the trial judge erred in that he overlooked or failed to give due weight to the following evidence to support the unchallenged finding of fact in the Stated Case that the No 3 wall was common property:

(a) the strata plan;

(b) the s 317A certificate issued by the Council;

(c) Mr Lett's evidence,

and further overlooked the ambiguity of Mr Hodder's evidence on which he relied.

8. The trial judge erred in law or in the exercise of discretion in making a finding and declaration about the status of the No 3 wall (which divides the appellant's Lot 32 from the separately owned Lot 34) as being not common property in circumstances where the owner of Lot 34 had been given no chance to be heard on the matter.

9. He further erred in making such finding and declaration without determining whose property the No 3 wall was.

10. The trial judge, having found that the Board erred in the way in which it reached its conclusion that the respondent was not bound to rectify the water penetration through the No 3 wall (being the question asked of the Court and arising on the Stated Case), erred in not answering the question (as to whether the Board had thereby erred) in the affirmative and thereafter remitting the matter."

Ground 2 and Ground 5: Mr Symes' submissions

24 Mr Symes submitted that it was common ground before the Strata Titles Board that the No 3 wall was common property for the following reasons. The solicitor appearing for the body corporate, while examining in chief Mr P G J Griffiths, a building consultant, elicited the following evidence about the No 3 wall:

"Q. And you would agree that these walls are common property in nature?

A. That is my understanding referring to the strata documents, yes."

A little earlier the solicitor for Mr Symes referred to the No 3 wall as "the common property wall on level 11". Later the solicitor for the body corporate too called it a common property wall and said that "generally speaking being a common property wall the body corporate has to repair it": Blue 97Y-98C. The solicitor for Mr Symes a little later said: "we all admit it's a common property wall".

25 In short, the solicitor for the body corporate elicited evidence that it was a common property wall and later called it that. He twice heard the solicitor for Mr Symes call it that, and each time did not demur. In the circumstances it is not surprising that in its reasons delivered on 30 April 1997, the Strata Titles Board said: "It appears common ground and I accept that the wall in question is common property." Fact (xxiv) stated in the Stated Case was: "The external eastern wall (the eastern wall) [ie the No 3 wall] of Unit 32 on level 11 was common property".

26 Whether or not the proposition that the No 3 wall was common property is a proposition of fact or a proposition of law, it was not challenged in the stated case. The trial judge said:

"It will be noted that the Board's findings of fact include, at item (xxiv), a finding that the No 3 wall `was common property'. To my mind this conclusion that a physical item is within a statutory definition the content and scope of which depend on the construction of provisions of the statute (which is the only conclusion the Board could have intended to state in item (xxiv)) is a conclusion of law albeit, of course, one derived from and based on relevant facts. For reasons already elaborated, a conclusion that the No 3 wall is common property cannot properly be reached, in the context of the strata plan itself and the legislation in which the definition appears, unless it is found as a fact that the wall existed when the plan was registered on 7 January 1987. Although the findings of fact set out in the stated case do not include any express finding to that effect, such a finding is, as just stated, necessarily implicit in the conclusion that the No 3 wall is common property."

27 The trial judge then referred to evidence which, in his opinion, "amply justifies a finding that the No 3 wall did not exist on or about 30 January 1987 or, to put it the other way, precludes (in the absence of countervailing evidence) a finding that it did exist at that time."

28 The trial judge then said:

"There was no evidence before the Board from which it could properly infer that the No 3 wall existed on 7 January 1987. The only evidence as to the nature and state of structures on Level 11 at that time denied the existence of any wall. It was therefore not open to the Board to reach and act upon the conclusion that the No 3 wall is common property. To have done so was erroneous."

29 In these circumstances counsel for Mr Symes submitted that the course taken by the trial judge, at the instigation of the body corporate, offended the following fundamental principle stated in Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1 by Gibbs CJ, Wilson, Brennan and Dawson JJ:

"In a case where, had the issue been raised in the court below, evidence could have been given which by any possibility could have prevented the point from succeeding, this Court has firmly maintained the principle that the point cannot be taken afterwards."

That principle has been stated in many other decisions of the High Court and of other courts. It is not necessary to go to those decisions.

30 Counsel for Mr Symes pointed out that the trial judge said:

"The stated case procedure under the now superseded provisions of Part 5 of the Justices Act 1902 which I must follow here involves a limited avenue of appeal. The guiding principles which emerge from the provisions themselves and from the case law, including, in particular, the judgments of members of the Full Court and Court of Appeal in Ex parte Anderson (1920) 20 SR (NSW) 207, Wheeler v Cahill (1943) 61 WN (NSW) 1, Cook v Evans (1948) 65 WN (NSW) 289, Allen v Kerr (1995) Aust Torts Reports 81-354 and Waterloo Holdings Pty Ltd v Timso NSWCA, 28 August 1997, as well as the decision of Yeldham J in Glover v Macdougall [1976] 2 NSWLR 359, may be stated briefly.

First, s.106 of the Justices Act requires the Court to hear and determine `the question or questions of law arising on any such case'. It follows that the only questions that the Court may determine are questions of law and that the only questions of law it may determine are those raised by the stated case itself.

Second, it may be that a question of law will have been included in the stated case at the request of the applicant even though that question was not taken at the hearing below or brought to the attention of the tribunal. But this does not mean that the Court, upon the hearing of the stated case, is entitled to determine questions of law beyond those arising on the stated case itself."

Counsel for Mr Symes submitted that the trial judge had here stated the relevant principles correctly, but had failed to apply them. He had decided a question about whether the No 3 wall was common property even though it was not raised by the stated case and even though the facts necessary to decide it did not appear in the stated case.

Grounds 3-4: Mr Symes' submissions

31 Mr Symes' submissions were:

"His Honour further erred in that Appellant's counsel, when Respondent's counsel sought to raise a submission that the No 3 wall was not common property, objected to the raising of such submission on the further ground of the Coulton v Holcombe principle that a party is bound by its conduct of the case below. ...

As noted in 8 above it was common ground below that the No 3 wall was common property - a fact reflected in unchallenged finding of fact (xxiv).

Indeed there was evidence which on any view could have been given which could have prevented the newly raised (on appeal) issue from succeeding. The Appellant has obtained an affidavit sworn on 19 March 2002 by the surveyor who prepared and certified the strata plan (see annexed and to follow in Orange). His evidence is that the wall, which corresponded with the drawn line on the strata plan, existed at the time he prepared the strata plan as he certified and contrary to the subsequent finding of the trial judge at para 59 (Red 57M-R). Leave will be sought to read such affidavit on hearing.

His Honour at para 64 (Red 60A-E) dismissed the Coulton v Holcombe objection to the Respondent being permitted to challenge found fact (xxiv) in the stated case on the ground that because the question was `so central to the proceedings before the Board' Coulton's Case did not preclude him from deciding the appeal `by reference to that question'.

It is unclear what His Honour meant by the `so central' remark. As noted in 8 above found fact (xxiv) was common ground before the Board. In any event the High Court's statement of principle permits of no such qualification or exception.

He totally ignored in his judgment the Appellant's submission that, had it not been common ground below, further evidence could have been led to the effect the wall existed at the time of registration of the strata plan."

Grounds 2-5: The body corporate's submissions

32 The body corporate submitted:

"The Appellant placed before the Trial Judge the whole of the oral and documentary evidence which had been adduced before the Board and he invited the Trial Judge to review that evidence in order to determine the proceedings on the stated case.

The Appellant contended in the stated case itself that the Board had not properly stated the case (Red 72-W).

On the Trial Judge's analysis, the stated case, as it was presented to him, contained the insufficient findings of fact on crucial issues, including the fundamental issue of whether the relevant parts of the building were common property. It would have been open to the Trial Judge, in these circumstances, to send the case back to the Board for the purpose of having additional findings of fact made and for the case to be amended accordingly: see Sec 106 of the Justices Act and American Airlines Inc v Georgeopoulos & Anor, not reported, NSW Court of Appeal (26/9/96). The Trial Judge was not bound to do that, however.

As is well known, Part 32 of the Supreme Court Rules confers more extensive powers on the Court in an appeal of this kind than are contained in Part V of the Justices Act: See Sec 10 of that Act. Division 2 of Part 32 conferred on the Trial Judge a power to receive evidence, to make findings of fact and to add to or otherwise alter the case if it appears to him that it did not state the facts sufficiently to enable him to determine the proceedings. That is a power of some dimension and is apparently intended to simplify what was otherwise a notoriously cumbersome, often unsatisfactory and difficult procedure.

The Trial Judge was also entitled to draw inference from that evidence. Indeed, given the ambit of the appeal, it was necessary for the Trial Judge to examine the whole of that evidence and it was appropriate for him to make additional findings of fact, on the basis of that evidence, in the event that the stated case was insufficient see Allen v Kerr & Anor (1995) Aust Torts Reports 81-354 per Powell JA at 62, 591.

The Trial Judge also had the inherent and statutory power to dispense with the requirements of Part 342 in order to permit the Respondent to raise the issue of whether the No 3 wall was common property despite the concession which the Respondent had made in the Board: see Part 1 rule 12 and Galletta v Walter [1977] 1 NSWLR 1 per Yeldham J at 3 E-F.

Though it is true that such a power is not unlimited, and that it would be subject to the constraints of fairness, the Trial Judge was entitled, and indeed bound, to examine the evidence before the Board. Having done that, the Trial Judge was justified in concluding, as he did, that the Board had made insufficient findings on a threshold issue and to proceed to make those findings, at least in the absence of any identifiable prejudice to the Appellant.

The Trial Judge found that the question of whether a physical feature of a building was common property could not properly be regarded as a finding of fact (Red 5N-54F). The appellant does not, and could not, challenge the correctness of that analysis. It was thus open to the Trial Judge to review and, if necessary, contradict the Board's purported "finding of fact" that the No 3 wall was common property subject to considerations of procedural fairness of the kind discuss in Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1.

Coulton v Holcombe is not an inflexible rule and its rigorous application may occasion injustice if the point which is sought to be raised involves an error of law on a material issue, or which would involve the Court in dealing with the rights of the parties on a false basis: see Della Patrona v Director of Public Prosecutions not reported, NSW Court of Appeal (1/9/95) and Brady v Brady (1989) 1 AC 755 at 781. The Trial Judge obviously had these principles in mind (Red A-E).

In any event, the course which the Trial Judge adopted did not occasion to the Appellant any procedural unfairness if the nature of the issues before the Board are taken into account.

In the proceedings before the Board, considerable emphasis was placed by the Appellant on the effect of the 317A Certificate. Evidence was adduced before the Board by the Respondent on the state of the completion of the building work on level 11 at the time of the issue of that Certificate in late January 1987 (blue 77J-78H). That evidence was led from Mr Hodder on the first day of the hearing, that is in early October 1996 and the Appellant had enough time to obtain evidence to contradict him before the hearing resumed before the Board some 4 months later, that is in early February 1997 (Blue 182). The Respondent's concession before the Board that the No 3 wall was common property did not, in these circumstances, occasion any real prejudice to the Appellant in the way in which he presented his case to the Board. The Appellant tendered the 317A Certificate. He sought to establish before the Board that the building had in fact been completed by late January 1987 and he cross-examined the Respondent's witnesses in relation to that issue (Blue 79)."

Grounds 2-5: Conclusion

33 Mr Symes was granted leave to file and rely on an affidavit of Mr Le Page to which was annexed an affidavit of Dennis Smith. The point of the tender was to show that had the question whether the No 3 wall was common property been raised in the Strata Titles Board, the proposition on which the trial judge based his conclusion that it was not, namely that wall No 3 did not exist when the strata plan was registered and the lines on the floor plan did not indicate whether or not any particular line was the side of a wall, could have been contradicted by evidence called by Mr Symes. Mr Smith said:

"In 1986, I prepared a strata plan in respect of the home unit building at 10 Smith Street, Wollongong. The plan was registered on 7 January 1987 as Strata Plan 31731.

The strata plan identifies three part-lots (part-Lots 32, 34 and 35) and common property on Level 11 of the building. A line on the strata plan which separates each of those part-lots from another part-lot or from common property corresponds with the base of a wall. The boundaries of those part-lots are constituted by the inner surfaces of the walls represented by the lines on the strata plan, consistent with Section 5(2)(i)(a) of the Strata Titles Act 1973 (as now amended).

The strata plan contains no linear dimensions or linear connections which, if the boundaries had not been defined by walls, would have been required by Clause 9(d) of the Strata Titles Act Regulations 1974 to show the relationship between the inner surface of the walls and the boundaries.

When I inspected Level 11 to prepare the strata plan, the construction of enclosed rooms which currently stand on Level 11 did not exist. However I recall that the walls which are represented by lines on the strata plan existed at that time, as I certified in the Surveyor's Certificate in Sheet 1 of the strata plan."

The trial judge had relied on the contrary evidence of a Council officer, Mr Hodder, to the Strata Titles Board which rested, as counsel for Mr Symes submitted, on a "somewhat vaguely expressed recollection".

34 The tender makes Mr Symes' point good. It points not merely to the possibility that evidence which could have defeated the point raised for the first time before the trial judge could have been tendered, but also to its actuality. Hence the principles stated in Coulton v Holcombe should have prevented the trial judge from permitting the body corporate to agitate a matter which was not in issue before the Strata Titles Board and indeed was common ground before it and before him. This is not to say that Mr Smith's evidence necessarily defeats the evidence of Mr Hodder. It is to say only that the point which Mr Hodder's evidence was used to make could have been defeated had the issue been raised at the correct time.

35 Mr Symes' arguments about the making of a finding in relation to matters of fact not appearing in the case stated also appear unanswerable.

36 How did the status of the No 3 wall come to be an issue before the trial judge? The contention that it was not common property was raised by the body corporate in its address, which took place after the address in chief on behalf of Mr Symes. In the course of that address counsel for the body corporate handed up written submissions in which the following appeared at pages 17-18:

"the eastern wall is not in law common property by virtue of the fact that it was not in existence at the time the Strata Plan was registered and is not depicted in that Plan. It is open to the Body Corporate now to take this point because there was no possibility of it being met by the calling of further evidence in the Board given that the point raises a pure question of construction of the Strata Plan and given that Hodder's evidence about the stage at which the building work had reached at the time the Strata Plan was registered was not the subject of any challenge: see for example Ex parte Anderson (1920) 20 SR (NSW) 207; Wheeler v Cahill (1943) 61 WN (NSW) 1; and Cook v Evans 91948) 65 WN (NSW) 289."

37 In reply counsel for Mr Symes objected to the taking of this point. He read the relevant part of Coulton v Holcombe. He pointed out at some length that the solicitor appearing for Mr Symes in the Strata Titles Board would have cross-examined on the point and could have called evidence on it had it been a live point. He might also have pointed out that the reason why Mr Hodder's evidence was not the subject of challenge on this point was doubtless because the point was not then in issue. And he could forcefully have said that the three cases cited have nothing to do with the matter and do not create any relevant exception to or qualification on Coulton v Holcombe. Indeed, Jordan CJ in Wheeler v Cahill specifically noted the principles in Coulton v Holcombe and, as will be seen in [38]-[39].

38 How did the trial judge deal with the objection raised by counsel for Mr Symes based on Coulton v Holcombe? He said:

"The question whether the items concerned are common property is a question of law for the reason already stated, namely, that it involves the conclusion that a physical item is within a statutory definition the content and scope of which depend upon the construction of provisions of the statute. Because that question is decisive of the issues arising on the stated case, it is open to the Court, in these proceedings governed by the now repealed provisions of the Justices Act, to dispose of the appeal solely by reference to that question. In Wheeler v Cahill (above). Jordan CJ said:

`It is true that any dissatisfied party may by procuring a case to be stated under s.101 obtain a determination by this Court under s.106 of any question of law arising on the case. It is true also that the jurisdiction so exercisable is not restricted to questions of law which have been specifically raised before the magistrate. It extends to all questions of law which are necessarily involved in his decision whether his attention was drawn to them or not; although the Court will not entertain a point of law not raised before the magistrate if, assuming it to have been taken before him, it is possible that it might have been met by calling further evidence.'

To the same effect are the following observations of Isaacs J (with whom Higgins and Starke JJ agreed) in George Hudson Ltd v Australian Workers' Union [1923] HCA 38; (1923) 32 CLR 413 referred to by Jordan CJ:

`Whether represented by counsel or not or, being represented by counsel, whether or not he is habitually accustomed to the recondite intricacies of scientific jurisprudence, if a litigant, merely because some decisive but unusual point escapes attention, were to be debarred from the benefit of the Supreme Court's ruling on the point, Parliament would have failed to meet an obvious necessity. The decisions I have quoted show that, in the opinion of the Judges who gave them, that failure did not exist; and I agree with them. That establishes, in my opinion, that, so far as the State Act operates, the case stated was open to the Supreme Court to decide every point of law that was relevant to the facts stated.'

Because the question whether the relevant items are common property was so central to the proceedings before the Board, I do not consider that principles of the kind discussed in Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1 preclude my deciding this appeal by reference to that question."

39 It is to be noticed that in the last lines of the passage quoted from Wheeler v Cahill, Jordan CJ said that the raising of a new point of law, in relation to cases stated as much as elsewhere, was impermissible if the new point could have been met by calling further evidence. It is also to be noted that on the page before the passage quoted from Isaacs J's judgment in George Hudson Ltd v Australian Timber Workers' Union [1923] HCA 38; (1923) 32 CLR 413 at 427, namely page 426, he said that English authority held:

"that a fatal objection in law may be taken in the appellate Court, though not noticed before the justices, the condition being that it could not be cured by further evidence. The basis of that decision obviously is that in law the whole matter is open to the appellate Court on the law with respect to the facts, but, that being open, the ordinary dictates of justice require that neither party shall be prejudiced by the late discovery of the new point. If it is incurable, he is not prejudiced, except perhaps as to costs; but, if curable by evidence, he may be prejudiced, and, therefore, on grounds of natural justice the party taking it must bear his own misfortune rather than pass it on to the other party. This is a course followed in all appellate jurisdiction where no statutory provision prevents it. It is the rule in this Court and in the Privy Council; and is exemplified in numerous cases."

That statement of the principles in Coulton v Holcombe qualifies the passage quoted on 427.

40 Finally, the principles in Coulton v Holcombe do not cease to apply when the new question is "central". They apply whether the new question is central or marginal, fundamental or minor. In Coulton v Holcombe itself the point which the High Court said could not be raised was whether a particular notice lacked statutory validity. If it had statutory validity, it might have prevented a particular application for water rights from succeeding. If it were invalid, the parties' rights could be different. The issue of statutory validity was thus important. Nothing in the High Court's reasoning suggests that that was a passport to favour, and the High Court held that the Court of Appeal had erred in permitting the point to be raised.

41 It is convenient to turn to the various arguments which the body corporate advanced in defence of its conduct in instigating the trial judge to entertain the new point.

42 As to the argument that Mr Symes placed before the trial judge the whole of the evidence before the Strata Titles Board and invited the trial judge to review it, the fact is that Mr Symes did not invite the trial judge to do this at large. He did so in order to raise various "no evidence" points. He did not do so in order to raise the issue of whether the No 3 wall was common property.

43 The next argument of the body corporate was that Mr Symes himself had criticised the stated case. Paragraph 4 of the stated case sets out various complaints about particular facts which relate to Determination 2. Fact (xxiv), which relates to Determination 3, is not the subject of any complaint. That proposition is not affected by the fact that the stated case records that Mr Symes submitted:

"That the case has not been stated properly by me in that generally matters are stated as findings of fact although in my judgment no such findings of fact were made; also, that grounds of determination are stated by me in terms different from the grounds of determination given in my judgment."

There is no specific submission about fact (xxiv); and even if the challenge embodied in the material just quoted applied to fact (xxiv), it must be concluded that the challenge was withdrawn in view of the common position adopted by the parties and argued before the Strata Titles Board.

44 The next arguments related to Part 32 of the Supreme Court Rules. Let it be assumed that the trial judge had power to remit the matter to the Board. It is questionable whether that would have been a proper course where one party wished to raise a fresh issue contrary to its earlier position. But the fact is that the trial judge did not remit the matter to the Board. Let it also be assumed that the trial judge had power under Part 32 rule 7 of the Supreme Court Rules to make findings which contradicted what was in the stated case, or to dispense with Part 32 entirely. It is to be noted that Yeldham J said in Galletta v Walter [1977] 1 NSWLR 1 at 3 that the latter power "would normally be sparingly exercised". In Allen v Kerr (1995) Aust Torts Rep 81-354 at 62,591, Powell JA (Meagher JA concurring) agreed. Further, either power would be subject to compliance with the principles of procedural fairness stated in Coulton v Holcombe.

45 The next submission was that Coulton v Holcombe will not apply if the point raised involves an error of law on a material issue or would involve the court dealing with the rights of the parties on a false basis. That submission is not supported by the citation of Brady v Brady [1989] AC 755 at 781: Lord Oliver of Aylmerton did no more than restate the principles stated in Coulton v Holcombe. It is not surprising that the law of England and the law of New South Wales remain, as they have for a long time been, identical on this point. Della Petrona v Director of Public Prosecutions (Cth) (No 1) (Court of Appeal, 1 September 1995, Kirby P and Priestley JA, Meagher JA dissenting) does not support the submission either. That was a case in which a constitutional point was raised late. Kirby P, speaking for the majority, stressed that the issues presented were "pure points of law" and also stressed that "no evidence is required to permit the court to address the issues". He said: "Where evidence is required, ... procedural fairness requires an appellate court to deny the facility which the appellant seeks." It is true that there are cases where the courts are averse to pronouncing judgments on incorrect factual hypotheses, because to do so amounts to the giving of advisory opinions and to encouraging collusive litigation: see the cases discussed in Damberg v Damberg [2001] NSWCA 87; (2001) 52 NSWLR 492 at [148]- [160]. However, these perils do not exist here. It has not been demonstrated that the hypothesis that No 3 wall was common property is plainly incorrect. There is some evidence that it was incorrect; on this appeal evidence strongly pointing in the contrary direction has been filed. Courts commonly act on admissions in relation to matters of fact which might be disputed if the parties desired to do so, but which they have chosen to arrive at a compromise about.

46 The contention that Mr Symes had enough time between 3 October 1996, when Mr Hodder gave the evidence to the Strata Titles Board on which the trial judge relied, and the resumption of the hearing on 10 February 1997, is wholly invalid. The question of time is beside the point. The common assumption and agreement of the parties that the No 3 wall was common property existed before and after the time when Mr Hodder gave evidence, and extended up to the time when the Strata Titles Board gave its reasons, the time when it settled the case stated over a period of three years and after four or five days of argument, and indeed up to 1 May 2001. No doubt Mr Symes had time to deal with Mr Hodder's evidence. What he lacked was any consciousness that Mr Hodder's evidence would be used to attack the status of wall No 3 as common property.

47 If the concluding passage quoted from the body corporate's written submissions is intended to suggest that the solicitor for Mr Symes cross-examined Mr Hodder with an eye to the status of the No 3 wall as common property, it is entirely fallacious. The cross-examination referred to is not of that character.

48 In oral argument the body corporate relied on the trial judge's detection of deficiencies in the stated case. Even if he was right in detecting deficiencies in it, this does not justify what happened. A deficiency in the stated case would be significant if it related to something in issue. Whether the No 3 wall was common property was not in issue.

49 In oral argument the body corporate relied on Allen v Kerr (1995) Aust Torts Rep 81-354 as supporting its conduct in raising the issue of whether wall No 3 was common property. Nothing to which counsel pointed showed that that case is relevant. It does not offer any ground on which the body corporate could prevent the principles stated in Coulton v Holcombe operating adversely to its case. It was a case on Part 32 rule 7(1) of the Supreme Court Rules which provides:

"(1) Where it appears to the Court that a stated case does not state the facts and documents sufficiently to enable the Court to decide the questions arising or otherwise to hear and determine the proceedings on the stated case, the Court may -

(a) with the consent of all parties interested, add to or otherwise alter the stated case;

(b) send the stated case back to the Division or court in which it is stated or to the judge, justice or person by whom it is stated for the purpose of addition or other alterations; or

(c) receive evidence, make findings of fact, and add to the stated case in accordance with the findings of fact of the Court.

(2) The Court shall not exercise its powers under subrule (1)(c) in respect of a stated case in any criminal proceedings."

Part 32 rule 7(1) cannot be construed as a legislative repeal of Coulton v Holcombe. In the course of argument on this point, it emerged, incidentally, that the reason why the transcript of proceedings before the Strata Titles Board was received by the trial judge was so that various "no evidence" points raised by Mr Symes could be considered. These "no evidence" points were obviously not related to whether the No 3 wall was common property. There was no application by the body corporate for the trial judge to "receive evidence" on that latter issue. The reliance on Part 32 rule 7(1) to overcome the usual rule that evidence cannot be called where a case is stated thus fails.

50 Counsel for the body corporate defended what happened by saying that if he had applied for the matter to be sent back to the Strata Titles Board for further findings to be made and an improved case stated devised, that would have involved the parties in further delay, expensive and complexity. The trial judge did not, however, rely on this reasoning. While there is, particularly in this case, much to be said for reducing delay, expense and complexity, the desirability of Mr Symes having an opportunity to deal with the factual aspects of the common property issue outweighs them. If the trial judge thought it was open to the body corporate to raise the point for the first time, which is itself a controversial proposition, the trial judge ought to have remitted the matter to the Strata Titles Board for reception of all necessary evidence, or received it himself. The importance of procedural fairness outweighs considerations of delay, cost and complexity.

51 Counsel for the body corporate then said that the trial judge's decision to bypass Coulton v Holcombe was a discretionary decision and that the principle in that case was not of universal application. While there can be discretionary aspects to the application of Coulton v Holcombe, in my opinion there was no reason not to apply it here.

52 The appeal should be upheld on grounds 2-5.

Grounds 6-10

53 These grounds are:

"6. He further erred in that even had the respondent challenged finding of fact 2 (xxiv) in the Stated Case that the No 3 wall was common property (which it had not), it could only be challenged as an error of law if it had shown there was no evidence to support such finding of fact whereas His Honour:

(a) failed to approach the issue by the no evidence test;

(b) instead approached the issue by the conventional civil test on the balance of the evidence;

(c) in (b) relied on original evidence before the Board which lay outside the facts found in the Stated Case.

7. Further to 6, the trial judge erred in that he overlooked or failed to give due weight to the following evidence to support the unchallenged finding of fact in the Stated Case that the No 3 wall was common property:

(a) the strata plan;

(b) the s 317A certificate issued by the Council;

(c) Mr Lett's evidence,

and further overlooked the ambiguity of Mr Hodder's evidence on which he relied.

8. The trial judge erred in law or in the exercise of discretion in making a finding and declaration about the status of the No 3 wall (which divides the appellant's Lot 32 from the separately owned Lot 34) as being not common property in circumstances where the owner of Lot 34 had been given no chance to be heard on the matter.

9. He further erred in making such finding and declaration without determining whose property the No 3 wall was.

10. The trial judge, having found that the Board erred in the way in which it reached its conclusion that the respondent was not bound to rectify the water penetration through the No 3 wall (being the question asked of the Court and arising on the Stated Case), erred in not answering the question (as to whether the Board had thereby erred) in the affirmative and thereafter remitting the matter."

54 Since the conclusion in relation to grounds 2-5 was that it was not open to the trial judge to consider whether the No 3 wall was not common property, and since grounds 6-10 all assume that it was, but that he erred in that consideration, it is both undesirable and unnecessary to deal with grounds 6-10.

Grounds 11-16

55 These grounds are:

"11. In finding and making a declaration that the tiles were not common property the trial judge erred in law in that no such question arose on the Stated Case nor did that matter even form part of the stated grounds of determination.

12. He further erred in law in proceeding to make a finding of fact about whether the tiles were laid on or before 7 January 1987 (the date of registration of the strata plan) when no finding of fact on that matter was stated in the Stated Case.

13. He further erred in criticising the Board for erroneously reaching and acting upon `the conclusion that the surface tiles are common property' when:

(a) no such finding of fact appeared in the Stated Case;

(b) no such ground of determination appeared in the Stated Case.

14. He further erred in relation to his findings and declaration about the tiles in that he overlooked the law of fixtures.

15. He erred in assuming that his finding and declaration about the tiles being common property disposed of the questions asked on the stated case about the slab.

16. The trial judge, having found that the Board erred in the way it reached its conclusion that the respondent was not bound to rectify the slab (which lacked the necessary rebate for habitable accommodation - Stated Case findings of fact 2 (xviii), (xix), (xx) and (xxi)), erred in not answering the question as to whether the Board had thereby erred in the affirmative and thereafter remitting the matter."

56 In view of the fact that the body corporate advanced no argument against Mr Symes' submissions on these grounds they can be dealt with quickly.

57 Mr Symes set out the background to his submissions thus:

"From the Strata Titles Commissioner the Appellant had obtained an order of 1 March 1996 that the Respondent take such action as necessary to rectify the water penetration problem at floor level into the Appellant's lot - see `1 Determination' in the stated case (Red 31-L).

It was the case of the Appellant before the Board that the ingress of water at floor level into the sunrooms (such ingress not being in issue) was due to the absence of a rebate or step in the concrete slab which was present on all other residential levels of the building at the junction between rooms and external terraces or balconies. As to the absence of and need for such a rebate - see stated case findings of fact 2(xvii), (xix), (xx) and (xxi) (Red 5U-6I). The appellant argued that the Respondent's duty to repair included making good that which was not sound or properly built - Proprietors of Strata Plan No 6522 v Furney [1976] 1 NSWLR 412, 416 - such principle not being in issue on the appeal (judgment para 17 - Red 35C-I).

In relation to the grounds of determination 3(i) and (ii) in the Stated Case, the Appellant argued before the trial judge that firstly the Board erred in law by placing the onus on the Appellant to prove compliance with the original conditions of the development consent (or building approval - it was unclear from the stated case which was relied on). The development consent for the sunrooms was not in evidence below or before the trial judge so the stipulated `conditions' (Grounds of Determination 3 (i)), if that was being referred to, were unknown. What was clear on the evidence and findings of fact was that it was a development consent for residential use (findings of fact 2(ix), (x)). Accordingly, as a matter of public law, if development consent conditions had not been complied with, the Respondent as `owner' of such building was bound to bring the buildings into compliance - such secondary statutory duty reinforcing its obligation under s 68 Strata Titles Act to put the building into proper repair. A breach of a condition of development consent or building approval does not mean that consent or approval lapses (Tynan v Meharg (1998) 101 LGERA 255, 258; Pulver Cooper v Johnson (1998) 101 LGERA 76, 96). If the `stipulated conditions' referred to in 3(i) of the Stated Case referred to the building approval rather than the development consent, that approval was in evidence below and:

(a) there was no evidence that any of its conditions had not been complied with;

(b) anyway the obligation lay on the Respondent as owner of the building to bring it into compliance with the conditions of the building approval.

The Appellant argued Ground of Determination 3(ii) was equivocal as to meaning - unquestionably the only evidence of a development consent or building approval was that they were for residential habitable use. If it meant no more than such consent or approval had not been complied with then the same reasoning applied, this merely added a second statutory obligation on the Respondent to make good.

Ground of Determination 3(iii) was absurd on the findings of fact already set out. Obviously, as a matter of common sense a rebate in a concrete slab is `integral' in that it is there or not from the time the slab is poured. Once it was accepted that the only development consent for the rooms at this level was for residential use (see Ex 5 (Blue 205P-Q) development consent for sunrooms) and the building approval for the same it followed from findings of act 2 (xviii), (xix) and (xx) that the lack of rebate was a defect - and it had not been in issue between the experts before the Board that had it existed as on other floors it would have prevented ingress of water.

It would appear by necessary inference from what the trial judge said in para 61 of the judgment - `The only way in which the Board reached the conclusion that the body corporate was not liable to rectify the water penetration at either point was erroneous in law ...' - that the above Appellant's submissions succeeded, but for other reasons he found there was no liability in the body corporate to rectify the water penetration at floor level.

Those other reasons would appear from earlier in that paragraph to be:

(a) that neither the No 2 wall or the surface tiles were common property; and

(b) that this led in some unexplained way to there being no s 68(1)(b)(i) statutory obligation to rectify the floor slab."

Ground 11

58 The only references to the tiles in the case stated are:

"(xxii) The tiled exterior balconies on Level 11 of unit 32 were 85mm higher than the internal sunroom floor area.

(xxiii) The tiles laid on the balcony near the bedroom of the sunroom, in particular near the north east corner, were poorly sloped."

59 Mr Symes submitted that since no question arose in the stated case as to the status of the tiles and since they were not mentioned in the Grounds of Determination, it was contrary to principle to decide the question. This unanswerable proposition was, as indicated, not answered.

Ground 12

60 This ground succeeds. There was no relevant finding, and no relevant question of law was raised.

Ground 13

61 The trial judge said it was not open to the Strata Titles Board to reach and act upon the conclusion that the surface tiles were common property. It did not reach that conclusion. The trial judge's findings that none of the tiles were common property and that the Strata Titles Board should have concluded that the s 68(1)(b)(i) obligation of the body corporate did not apply to them were outside any question raised by the stated case. Hence ground 13 succeeds.

Ground 14

62 Mr Symes submitted that in concluding that the tiles were not common property, the trial judge overlooked the principles stated by Jordan CJ in Australian Provincial Assurance Co v Coroneo (1938) 38 SR (NSW) 700 at 712-713. However, since Mr Symes' submissions about introducing the issue of tiles are sound, it would be wrong to deal with ground 14.

Grounds 15-16

63 The questions asked in the stated case about the slab were whether the four grounds for Determination 2 were correct. (See paragraphs 7(g), 8(g), 9(a)-(b), 9(d) and 10.)

64 Mr Symes drew attention to [61] of the trial judge's reasons for judgment:

"For the reasons stated, the Board should have concluded, as a matter of law, that none of the No 2 wall, the No 3 wall and the surface tiles were within the statutory definition of `common property'. The Board should also have concluded, as a matter of law, that the obligation of the body corporate arising under s. 68(1)(b)(i) did not apply to any of those items. The way in which the Board reached the conclusion that the body corporate was not liable to rectify the water penetration at either point was erroneous in point of law, even though the conclusion itself was correct."

65 Mr Symes then submitted:

"As noted, in paragraph 61 His Honour found that the Board erred in law in the way it reached its conclusion, which could only mean on its Grounds of Determination the stated case `5' should accordingly, insofar as concerns the slab, have been answered in the affirmative and the order of the Commissioner been restored and/or the case remitted with such answer.

Instead His Honour seems to have assumed that his findings and declaration about tiles disposed of the floor slab issue and particularly the defect in the slab in that it lacked the necessary rebate for habitable space. Having found that the Board had erred in law on the latter issue that defect had to be remedied and the order restored. The proposition can best be tested by momentarily assuming the correctness and legitimacy of His Honour's finding and declaration about the tiles. The logic of that is that the tiles belong to the Appellant and as such could be removed by him. Whatever happens he is still left with the ingress of water caused by the lack of rebate in the slab, as to which His Honour has found the Board had erred in law in overturning the Commissioner and holding the Respondent not liable to rectify."

66 In my opinion grounds 15 and 16 should not be upheld. The errors made in the Equity Division require the matter to be remitted to the Equity Division so that the stated case can be dealt with there afresh.

Ground 17

This ground was:

"Having regard to the above (and particularly 9 and 14), the trial judge erred in not upholding the appeal by way of stated case and not ordering the respondent to pay the appellant's costs."

67 This raises the question of what order is appropriate, and that question will be examined after the Notice of Contention has been discussed.

Notice of Contention

68 The body corporate contended that the decision of the trial judge ought to be affirmed on grounds other than those relied on, namely:

"1. His Honour should have also held that the Board was entitled, on the evidence before it, to make the findings of fact which it made and to conclude, on the basis of those findings, that the Respondent was not under a duty to repair or maintain the common property so as to prevent water from penetrating into the enclosed areas of the Appellant's Lot on level 11 of the building.

2. Alternatively, if the Respondent was under such a duty, His Honour should have held that the Board had been entitled to conclude, on the basis of the evidence before it, that the Respondent was not in breach of that duty.

3. His Honour should have held that, because the Board made no specific findings in relation to the structural state of the building on level 11 at the time the Strata Plan was registered, it was open to him to make those findings on the evidence before the Board and to proceed to determine the issues before him in accordance with those findings.

4. His Honour should have held that the respondent was not precluded from raising an issue as to the status of the No 3 wall before him on the grounds that:

(a) the Appellant did not contend before His Honour, much less establish, that he was in a position to lead any other evidence on that issue before the Board; and

(b) there was a live issue as to the structural state of the building on level 11 at the time the Strata Plan was registered and, more particularly, as to whether the No 3 wall was in existence at that time; and

(c) the Appellant had ample opportunity to address that issue and deal with it before the Board."

69 Grounds 3 and 4 have already been rejected.

70 The arguments advanced in support of the Notice of Contention, paragraphs 1 and 2, were essentially arguments in support of the propositions that the construction of the sunrooms on level 11 was unlawful. That was a proposition which Mr Symes put much effort into attacking before the trial judge, which the body corporate defended before the trial judge, and with which the trial judge did not deal. The body corporate also argued that even if it had any duty, it had not breached it. These arguments were advanced, and partially answered, over most of a day. There were also written submissions before and after the hearing relating to them which were of some complexity.

71 It is undesirable that this Court should determine the merits of the arguments surrounding paragraphs 1 and 2 of the Notice of Contention in view of the fact that the body corporate had directed the trial judge into forbidden territory and caused this Court to be unassisted by any reasoned analysis of the relevant arguments in the court below. It will shortly be proposed that the matter be remitted to the Equity Division. In the Equity Division each party will remain fully at liberty to agitate whatever arguments were fairly open on the case stated.

The case stated technique

72 In Collins v State Rail Authority of New South Wales (1986) 5 NSWLR 209 at 211 Street CJ described the stated case procedure as "a cumbersome and often unsatisfactory means of bringing a matter up for consideration on appeal". Those words have never been more forcefully illustrated than they have been by this case. That a relatively small dispute about the responsibility for dealing with water penetration should have led, first, to a threat to Mr Symes' capacity readily to sell his unit, and, secondly, to the maze of complex litigation that has resulted, does not reflect well on the selection by the legislature of an appeal by case stated as a means of reviewing the activities of the Strata Titles Board.

Orders

73 The Notice of Appeal seeks an order that the appeal be allowed. That order is appropriate.

74 The Notice of Appeal also seeks orders setting aside the declaration of 27 June 2001 and the order "dismissing the appeal with costs". These orders are appropriate.

75 The Notice of Appeal next seeks an order that seven questions in the stated case be answered affirmatively. These questions are whether the Strata Titles Board was correct in each of the seven "Grounds for Determination". At one stage in the argument in this Court consideration was given to whether this Court should attempt to determine all outstanding issues between the parties, as distinct from, on the one hand, merely remitting the matter to the Equity Division, and on the other hand, remitting the matter to the Strata Titles Board. To this end Mr Symes sought leave to amend his Notice of Appeal by seeking, inter alia, the following order:

"An order declaring that:

(a) the respondent owners corporation is bound to rectify the water penetration into the sunrooms of Lot 32 at floor level on level 11 caused by the lack of rebate in the floor slab;

(b) ... the eastern boundary wall to Lot 32 of level 11 (described as the `No 3 wall' in the judgment of Barrett J of 27 June 2001) is common property;

(c) ... to the extent that the wall referred to in (b) is cracked or is admitting moisture into Lot 32 the respondent is bound to repair it pursuant to s 62(1) of the Strata Schemes Management Act 1996."

76 The difficulty in this Court answering the questions in the stated case or in attempting to decide all the issues for itself, lies in the fact that the questions in the stated case are intertwined in the trial judge's reasons for judgment with questions, such as whether the No 3 wall was common property, which should not have been foisted on the trial judge by the body corporate. It is better that a judge of the Equity Division look at the matter afresh and consider the arguments of Mr Symes in favour of the proposition that the Strata Titles Board was wrong in its determination, together with the arguments of the body corporate against that proposition. Although the body corporate's conduct appears to have been the main cause of the hearing before the trial judge miscarrying, it is entitled to have its legitimately posed arguments, such as they are, considered just as much as Mr Symes is entitled to have his considered. The trial judge dealt with issues that were foreclosed to him, but either did not deal with the issues that were agitated, or, so far as he did, gave no reasons for his conclusion. It is desirable for the issues to be dealt with by a single judge rather than by this Court. The issues can then be thoroughly considered by the single judge, and if the parties are dissatisfied, and this Court grants leave, considered again by this Court. In the circumstances of cases such as the present, which turn on highly complex questions of fact and law, to deprive the parties of consideration of their problems by a single judge can work injustice. A fortiori, it is inappropriate for this Court to go further and seek to resolve the entire dispute, attractive though that might be to the parties.

77 The order of remitter to the Equity Division proposed below should be understood as not permitting any attempt by the body corporate to re-agitate, whether by further evidence to be called in the Equity Division or by a further remitter to the Strata Titles Board the issue of whether wall No 3 is common property. That is because of the body corporate's agreement to the contrary before the Strata Titles Board. If it were desired to raise that issue, the time to do so was no later than the hearing before the Strata Titles Board. To permit the matter to be raised later would reduce the proceedings there "to little more than a preliminary skirmish", to use the words of the majority in Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1 at 7.

78 In his Notice of Appeal Mr Symes sought an order that the respondent pay his costs of the appeal. To that he is certainly entitled. He also sought an order that the respondent pay his costs in the Equity Division. In my opinion that is a just order, because what caused proceedings in the Equity Division to miscarry was the body corporate's impermissible desire to contend that the No 3 wall was not common property. The prosecution of that contention in turn distracted the trial judge from the issues on which the body corporate should have been concentrating his attention.

79 In his draft Amended Notice of Appeal Mr Symes proposed two other costs orders. One relates to the costs order just discussed. It is:

"An order pursuant to s 229(2) of the Strata Schemes Management Act [1996] that any costs payable by the respondent ... must be paid from contributions levied in relation to lots other than lot 32."

The other order sought is:

"An order that any costs of the respondent incurred in these proceedings (including the appeal) not be payable in any part by the appellant."

80 The thinking underlying these two orders was put thus by Mr Symes. As to the first he said that it:

"was omitted from the original Notice of Appeal by oversight. It would obviously be unfair to burden a successful Appellant with paying as a lot proprietor part of his own costs as ordered to be paid by the Respondent. With the intent this not happen s 229 of the Strata Schemes Management Act [1996] provides for just such an order:

`(1) This section applies to proceedings brought by one or more owners of lots against an owners corporation or by an owners corporation against one or more owners of lots (including one or more owners joined in third party proceedings).

(2) The court may order in proceedings that any money (including costs) payable by an owners corporation under an order made in the proceedings must be paid from contributions levied only in relation to such lots and in such proportions as are specified in the order'."

81 As to the second he said:

"for the same reasons it would be outrageous if a successful Appellant had to pay, through levies based on unit entitlement, part of the Respondent's costs in unsuccessfully opposing him. So much is recognised by s 230(1) of the Strata Schemes Management Act which provides:

`(1) An owners corporation cannot, in respect of its costs and expenses in proceedings brought by or against it under Chapter 5, levy a contribution on another party who is successful in the proceedings.'

Since there might be a doubt as to whether the proceedings brought under a repealed section of the former Strata Titles Act 1973 were `proceedings brought by or against it under Chapter 5', it would be appropriate for the court to make such an order."

82 However, it is questionable whether the first of the orders proposed by Mr Symes goes far enough in view of s 229(2) of the Strata Schemes Management Act 1996, quoted above. Section 229(3) also provides:

"If a court makes such an order the owners corporation must, for the purpose of paying the money ordered to be paid by it, levy contributions in accordance with the terms of the order and must pay the money out of the contributions paid in accordance with that levy."

What proportions should be specified in the order? Section 78(2) of that Act provides:

"Contributions levied by an owners corporation must be levied in respect of each lot and are payable (subject to this section and section 77) by the owners in shares proportional to the unit entitlements of their respective lots."

This justifies adding to the end of the first order proposed the following:

"in shares proportional to the unit entitlements of the respective lots other than lot 32."

Should this create some unforeseen practical difficulty, application can be made under liberty to apply. The same is true of the other order sought.

83 The body corporate opposed the grant to Mr Symes of leave to amend his Notice of Appeal, but the arguments advanced relate only to the new declaration sought. Those arguments said nothing about the proposed costs orders, and these are sufficiently covered by the costs order requested in the Notice of Appeal, or are so close to it as to justify the Court in making the orders without the need for amendment. So far as it is unclear that the proceedings in the Equity Division are not proceedings under Chapter 5 of the Strata Schemes Management Act 1996, a source of power to make the second proposed order is s 76(1)(b) of the Supreme Court Act 1970, which gives the court "full power to determine by whom and to what extent costs are to be paid". It would be unjust if Mr Symes had to assist in the payment of the costs of the body corporate through levies based on unit entitlement, or had to suffer indirectly as a result of the existing assets of the body corporate being diminished for that purpose.

84 The following orders are proposed.

1. The appeal is allowed.

2. The declaration, the order dismissing the appeal, and the order that the appellant pay the respondent's costs of the appeal made by the trial judge on 27 June 2001 are set aside.

3. The matter is remitted to the Equity Division for determination.

4. The respondent is to pay the appellant's costs of the appeal.

5. The respondent is to pay the appellant's costs of the hearing before the trial judge.

6. Any costs payable by the respondent under Order 5 above are to be paid from contributions levied in relation to lots other than lot 32 in shares proportional to the unit entitlements of the respective lots other than lot 32.

7. Any costs of the respondent incurred in these proceedings (including this appeal) are not payable in any part by the appellant.

8. Liberty is granted to apply in relation to orders 6 and 7 on seven days' notice.

85 McCLELLAN J: I agree with Heydon JA.

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LAST UPDATED: 07/02/2003