Sanctuary Cove Principal Body Corporate [2009] QBCCMCmr 312 (24 August 2009)

Last Updated: 28 September 2009

REFERENCE: 0875-2008

ORDER OF A REFEREE

MADE UNDER PART V

BUILDING UNITS AND GROUP TITLES ACT 1980

Name of Building or Parcel:	Sanctuary Cove Principal Body Corporate
Number of Plan:	-
Address:	SANCTUARY COVE, QUEENSLAND 4212

TAKE NOTICE that pursuant to an application for an order made under section 77(1) of the Building Units and Group Titles Act 1980 by the Body Corporate for Plumeria

I hereby declare that Motion 8 purportedly passed as a special resolution by the Sanctuary Cove Body Corporate on 29 September 2008, to transfer part of Lot 70 to Lot 90, was invalid as contrary to section 33(1)(a) of the Sanctuary Cove Resort Act 1985.

STATEMENT OF REFEREE’S REASONS FOR DECISION - 0875-2008

“Sanctuary Cove Principal Body Corporate”

APPLICATION

Sanctuary Cove Principal Body Corporate (PBC) is established under the Sanctuary Cove Resort Act 1985 (SCRA), which provides the legal structures for the Sanctuary Cove Resort. The SCRA sets out a number of matters for the regulation of the PBC and the Sanctuary Cove Primary Thoroughfare Body Corporate (PTBC). The members of the PTBC comprise, directly or indirectly, owners of lots in the initial plan of survey. Owners of lots in non-residential zones automatically became members of the PTBC. Owners of lots in residential zones automatically became members of the PBC which is a member of the PTBC. The Body Corporate for Plumeria (Plumeria) is a residential body corporate which was the result of a subsequent subdivision. Plumeria is registered as Group Titles Plan (GTP) 2207.

This application was made under the Building Units and Group Titles Act 1980 (BUGTA) by Plumeria (applicant) on 14 October 2008, pursuant to a resolution passed by the Committee on 5 September 2008. The applicant sought the following orders against the PBC (respondent):

That the referee should examine the reasons and justification provided by the RBC in support of the PBC decision to transfer part of lot 70 to lot 90. If the Referee is not satisfied that the reasons and justification provided fulfil the PBC's obligations under section 33 of the SCRA the Referee to order that the Resolutions (Motion 8 parts 4-7 inclusive) passed at the PBC EGM of 29 September 2008 be rescinded and the orders issued by the referee dated 24 June 2008 will prevail.

That a transfer of any portion of lot 70 to the owners of lot 90 on whatever conditions which may be agreed, can proceed only with the consent of Plumeria Body Corporate.

The applicant also sought interim orders. On 3 November 2008 I made the following interim order:

I hereby order that Sanctuary Cove Principal Body Corporate shall not implement Motion 8 passed at the extraordinary general meeting of the Sanctuary Cove Principal Body Corporate on 29 September 2008, or otherwise take steps to transfer Lot 70 on GTP 2207, except with the prior consent of the Body Corporate for Plumeria.

This interim order has effect until three (3) months have elapsed from the date of this order, a further interim or final order for the application is issued, or until the application is withdrawn or otherwise ended (whichever is earlier).

Pursuant to a request by the applicant, on 22 January 2009 I made a further interim order:

I hereby order that the following interim order issued on 3 November 2008:

I hereby order that Sanctuary Cove Principal Body Corporate shall not implement Motion 8 passed at the extraordinary general meeting of the Sanctuary Cove Principal Body Corporate on 29 September 2008, or otherwise take steps to transfer Lot 70 on GTP 2207, except with the prior consent of the Body Corporate for Plumeria.

is extended.

This interim order now has effect until and including 2 May 2009 (being six months after the date of the original interim order), or this interim order is revoked, or a final order for the application is issued, or until the application is withdrawn or otherwise ended, whichever is earlier.
JURISDICTION

The SCRA is one of a number of pieces of legislation defined as a ‘specified Act’ under section 326 of the Body Corporate and Community Management Act 1997 (BCCM Act). Section 325(2)(a) of the BCCM Act provides that BUGTA continues to apply to plans registered under BUGTA for a specified Act. Section 104A of the SCRA provides for the application of the BUGTA to disputes about the operation of the SCRA or the rights and obligations of persons under the SCRA. Section 5A of BUGTA also provides that BUGTA applies for the operation of the SCRA.

Part 5 of BUGTA concerns disputes, and sections 75 to 94B provide for orders by a referee. Section 77 of BUGTA provides for the general power of referees to make orders.

77 General powers of referee to make orders

(1) A referee may, pursuant to an application of a body corporate, a body corporate manager, a proprietor, a person having an estate or interest in a lot or an occupier of a lot in respect of a parcel, make an order on any person entitled to make an application under this subsection or on the chairperson, secretary or treasurer of the body corporate for the settlement of a 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 parcel.

(2) Where a body corporate has a discretion as to whether or not it exercises or performs a power, authority, duty or function conferred or imposed on it by this Act, it shall be deemed to have refused or failed to exercise or perform that power, authority, duty or function only if it has decided not to exercise or perform that power, authority, duty or function.

(3) Nothing in this part authorises the referee to make an order of the kind that may be made by the Court under section 25 or 26.

(4) Nothing in this part affects the generality of subsection (1), but an order in respect of any matter dealt with in any other section of this part shall not be made under this section.

As previously outlined, I am satisfied that the applicant is both a body corporate and a person having an interest in a lot. The applicant is seeking an order against the PBC, as a body corporate regarding the exercise or performance of a power or function conferred on the PBC by the SCRA. Accordingly I am satisfied that I have jurisdiction as a Referee to determine the present dispute due to section 104A of the SCRA and section 77(1) of BUGTA[1].

PROCEDURAL MATTERS

Following the interim order, on 4 November 2008 I invited final submissions from the PBC and other affected parties, in accordance with section 73(1)(c) of BUGTA. Initially the closing date for parties to provide submissions was 2 December 2008. A delay by the PBC in providing the submissions notice to the bodies corporate which comprise the PBC, and a request for an extension from Sonia Trott (Trott) who is an affected party, resulted in an extension of the date to 12 January 2009. Trott then sought a further extension until 9 February 2009. This extension was not opposed by the applicant or the PBC and so was granted. On 4 February 2009 Trott made a third extension request for a further month, and the PBC requested an extension of one week. The applicant objected to extensions beyond one week and, given all the circumstances (which have previously been outlined to the parties), one further week extension was granted.

In due course submissions were made by the PBC and Trott. I note that while all schemes that comprise the PBC were invited to make a submission, none did so. The submissions received were provided to the applicant who made a written reply to the submissions.

I considered that it would be of benefit to my determination of this dispute to inspect the site in dispute in this application. A preliminary date was scheduled in March 2009 however Trott requested that this be deferred until mid April to enable her to attend. I was concerned that this delay would make it difficult to ensure a final order was issued prior to the interim order expired on 2 May 2009, bearing in mind that there was no capacity in BUGTA for me to extend the interim order again. Subsequently the PBC provided a written undertaking that it would abide by the terms of the interim order until a final order was issued, even if the interim order had expired. On this basis I consented to the inspection being conducted in April.

On 21 April 2009 I conducted an inspection of the site, and the surrounding area. The inspection was attended by two Committee members for the applicant Plumeria, three Committee members and a solicitor for the PBC, the Trotts and their solicitor, and Susan Minnekeer who is the body corporate manager (BCM) for both the applicant and the PBC.

On 2 April wrote to the parties seeking further information on a wide variety of issues arising in this dispute. The queries were primarily directed at the PBC but I invited Plumeria and Trott to also comment, as appropriate. A partial response, related to physical aspects of the scheme, was provided by the PBC prior to the inspection, with the remainder substantially submitted on 5 May. Comments were then submitted by Trott, with a response was received from Plumeria on 11 June.

Trott then advised that she had made contact with the original developer and sought further time to access additional documents. The extension was opposed by Plumeria but, while acknowledging the continuing delays I allowed a further time in the interests of enabling all relevant material to be considered. Trott provided further information on 14 July and Plumeria responded on 21 July.

MATTERS IN DISPUTE

The following is a summary of the matters in dispute, as ascertained from the application, submissions, investigations and statement of reasons in the previous application. The unprecedented volume of material and correspondence presented by the parties on this matter (with the file in this Office comprising some ten folders), and the considerable lack of clarity in many aspects of the dispute, has resulted in an unusually lengthy ‘summary’.

Background

The dispute relates to proposals by the PBC to enter into an agreement with Trott regarding the transfer of part of the secondary thoroughfare (ST) in Sanctuary Cove. This part of the ST which comprises Lot 70 on GTP 2207 (Lot 70), is owned by the PBC and services lots within Plumeria. Lot 70 runs along the northern side of Plumeria parallel to the Coomera River, with a section some 8 metres wide and 38 metres long running down to the river between Lot 90 and Lot 50. This section of approximately 310 metres is shown on the registered plans as Easement D. Easement D is an easement for drainage purposes over part of Lot 70, for the benefit of Lot 90. Trott is the registered owner of Lot 90 on Group Titles Plan of Resubdivision (GRP) 3441 which is a resubdivision of GTP 2207 (Lot 90). The area covered by Easement D has been landscaped and fenced by previous owners of Lot 90, and the house on Lot 90 encroaches slightly onto Lot 70.

The PBC seeks to transfer the area of Lot 70 covered by Easement D to Trott, but Plumeria objects to this occurring without its consent. On 20 March 2006 the PBC passed a special resolution purporting to transfer the easement area to Lot 90. The resolution included that the PBC would negotiate with Plumeria to “obtain their consent in the required form to the arrangements”. The PBC then sought to proceed without Plumeria consent. Plumeria lodged an application [Reference 0034-2008] challenging the transfer. Referee Toohey found[2] the PBC resolution was made on the basis that Plumeria would consent, and so ordered that PBC could not transfer the easement area pursuant to special resolutions passed on 20 March 2006 or 26 May 2008, without Plumaria’s consent.
The Referee also ordered the PBC to ensure that all occupiers in Sanctuary Cove have a right of way over the easement area as required by section 56 of the SCRA. The Referee commented that if the PBC wished to pursue the transfer without Plumeria’s consent it would need to pass a new special resolution to that effect. However he also commented that “...if the PBC decides instead to proceed with the transfer without the consent of Plumeria it would be open for Plumeria to challenge any proposed transfer under section 33 of the SCRA.”

My understanding of Referee Toohey’s statement of reasons is that he envisaged the parties entering into negotiations to seek a compromise solution to the dispute. It appears this did not occur. A new motion (Motion 8) on the proposed transfer was submitted by the PBC Committee to an extraordinary general meeting (EGM) of the PBC on 1 September 2008. In essence the motion sought to rescind the previous decisions on the matter and to execute an agreement with Trott and obtain Council consent to transfer the relevant portion of land to Trott.

At the EGM Plumeria tabled legal advice asserting that the motion lacked adequate explanation as to how it would benefit the wider interests of PBC members; that the interest of the Sanctuary Cove community was to reinstate access to the river frontage; that Trott has limited grounds for a claim for compensation against the PBC and the prospects of success were poor; that even if a claim were successful damages would be limited; and that the Lot 90 building unlawfully encroaches onto Lot 70 with rectification being the responsibility of Lot 90. The PBC agreed to defer voting on the motion until 29 September 2008, to t seek a mutually acceptable solution.

On 2 September Plumeria outlined a proposal that the PBC adjust the boundary between Lot 70 and Lot 90 to transfer a strip of the easement area to Lot 90, conditional on Trott agreeing to extinguish the deed under which they were permitted to landscape the disputed area. Plumeria says this would “...rectify the existing building encroachment and regularise appropriate building set backs from the Secondary Thoroughfare.” The PBC referred the proposal to Trott’s solicitor. It appears that Trott responded that she was not willing to entertain any compromise proposal and that no right of access by residents would be acceptable.

Consequently, Motion 8 was considered again at the EGM on 29 September 2008. It passed as a special resolution with 15 votes in favour, three against and one abstention. It seems 76.5% of the lot entitlements were in favour of the motion. The applicant notes that a third of the lot entitlements in favour of the motion were cast by the proxy for the developer.

The applicant indicates that the verbal justification for Motion 8 provided at the EGM was that:

• Trott purchased Lot 90 in good faith believing she was purchasing exclusive rights to Lot 70.
• The PBC has a duty to protect Trott’s investment, even to the disadvantage of other residents.
• As Trott is not prepared to compromise, the PBC must determine whether to insist on reinstating the right of way or pursue the transfer, at which time the problem will go away.
• If the PBC reinstated the right of way it could be liable for ‘millions’ in compensation to Trott.
  

Applicant’s argument

In response to the alleged justifications for Motion 8 Plumeria asserts that:

• Reasonable title and record searches would have revealed that no exclusive rights existed.
• While there will be some disadvantage to Trott by reinstating the right of way, residents are lawfully entitled to a right of way and should not be denied that right due to an error by Trott.
• Trott would benefit from a gift of land by the transfer, at the expense of other residents who would receive no benefit while losing open space and amenity.
• Without a legal opinion as to Trott’s likely causes of action, the prospects of success and the PBC’s exposure to damages, the PBC could not properly consider the merit of the motion.
  

Plumeria claims the PBC is failing in its duties under section 33 of the SCRA. They argue that:

• Section 63 of the SCRA entitles the PBC to transfer parts of the ST by special resolution. But without the protection of section 33 this allows 75% of qualifying votes to transfer any part of the ST to the detriment of the remaining 25%.
• Residents cannot be excluded from any part of the ST.
• Easements contribute to open space and property values. Other easements in Sanctuary Cove have been landscaped in a manner which conforms to the requirements in section 56 of the SCRA in that residents have unrestricted access over the ST.
• The previous order found that the Owner of Lot 90 was not given exclusive use of Lot 70.
• By failing to investigate properly the arrangements approved in 1996 the PBC has failed to manage and administer the ST in the interests of members.
• The Lot 90 building was not approved by the PBC, was not retrospectively approved and remains non-complaint, so there is no basis to the claim that the boundary location gives a right to exclude resident access to the area.
• The PBC has not released any legal advice supporting its claim that a challenge to Trott’s exclusivity would expose the PBC to damages in excess of $1,000,000.
  

Submissions

The submissions from the PBC oppose the application. They include the following arguments:

• Under section 63 of the SCRA the ST may be transferred with approval by special resolution of the PBC and the Gold Coast City Council (formerly Albert Shire Council) (Council).
• There is no requirement in section 63 for consent to be obtained from Plumeria.
• The PBC has carried a special resolution to transfer part of Lot 70 to Lot 90 by way of the steps outlined in Motion 8, including obtaining Council consent.
• There is no basis for an order that the transfer cannot proceed without Plumeria’s consent.
• Referee Toohey found that the process agreed to on 20 March 2006 required the consent of Plumeria and, consent having not been achieved, the transfer could not proceed. However he considered that if the PBC wished to pursue the transfer without the consent of Plumeria it could pass a special resolution to that effect. The PBC has now passed new resolutions which do not require the consent of Plumeria, and have revoked the previous resolutions.
• Plumeria relies on the Referee’s comments that a transfer without Plumeria’s consent would be open to challenge under section 33. However those comments were observations on matters not before the Referee, were speculation as to future matters, and were not correct.
• Plumeria has no legal authority for its proposition and does not specify how the PBC has failed in its duties under section 33 of the SCRA.
• The PBC disputes that its duty under section 33 to control, manage and administer the ST for the benefit of its members must be observed when transferring land. Section 63 does not refer to section 33 because it is not relevant to section 63. The words ‘control’, ‘manage’ and ‘administer’ do not relate to a transfer but to actions such as regular maintenance. If section 33 applied a transfer it would need to explicitly say so, including the word ‘transfer’.
• This interpretation is supported by Referee Toohey who said that, upon a proposal proceeding to transfer a ST, the area would no longer be ST and section 56 of the SCRA would not apply. Similarly, if section 33 did apply, it would not apply because the area would no longer be ST.
• No further reasons or justifications are required as the requirements of section 63 have been met and it is evident the PBC has acted diligently and in good faith.
• It is not for a third party to scrutinise the PBC’s decision with reference to arbitrary considerations and say whether the transfer would benefit members or not. It is not for PBC members to justify to a third party the reasons for making a decision and have a presumption applied against them if they do not. The legislation prevents unbeneficial transfer decisions by requiring a special resolution of the PBC representing each residential body corporate.
• There is no suggestion that the PBC members have conspired against a minority.
• The basis for the transfer was to avoid liability or cost in respect of the area and to regularise it, and to avoid litigation if the transfer did not occur and the landscaping was removed.
• In 2005 a section of wall on the easement area partially collapsed. The PBC investigated the rights and obligations of the relevant parties. Legal advice indicated that the obligation to maintain the easement was imposed on the PBC but there were no indemnity provisions protecting the PBC from damages resulting from the exercise of Lot 90’s rights under the easement. In addition the PBC may be liable under the Dividing Fences Act to contribute to the repair of the fence. The advice indicated that PBC could transfer the relevant area, could not ‘sell’ it for value, but could obtain reimbursement of costs.
• The explanatory note to the transfer motion in March 2006 noted that the fencing on the area was in poor structural condition and that the PBC may be subject to claims from any person suffering loss or damage in respect of the fencing, and the transfer would absolve the PBC from such liability and ongoing maintenance responsibilities.
• Legal advice in July 2007 indicated that an easement was granted to Lot 90 for what appeared to be landscaping but was possibly subsequently mis-described as drainage and that over the years the PBC had approved certain works including landscaping on the area. The advice was that if the approval were now revoked it could result in a significant claim against the PBC which would have to be met by additional levies.
• Legal advice in October 2007 on Plumeria’s proposed compromise was that if the area was reinstated for public access without Trott’s agreement the ensuing dispute would involve complex legal and equitable principles regarding reliance, illegality, estoppel and detriment. Attempts to restrain Trott’s use of the area would be met by injunctions and the owner may have grounds for applications under sections 180 and 184 of the Property Law Act 1974.
• An approach was made to Trott regarding the compromise but she rejected it out of hand saying the landscaping was there when she bought the lot and searches did not reveal any notation on the body corporate records regarding landscaping.
• Trott’s property and privacy would be affected if the right of way were restored. Her house encroaches onto Easement D and an external door from her lounge would become unusable.
• Trott has confirmed that she may sue under the Property Law Act 1974 or in equity.
• PBC has investigated Plumeria’s objections and compromise proposals with independent professional advice, including numerous legal and engineering advices.
• After four years of regular discussions on the matter, including a one hour discussion at the EGM, the PBC again voted in favour of the transfer. The decision was made diligently and in good faith. The decisions have been logical.
• Plumeria should respect the integrity of the PBC members in undertaking the process and accept the outcome arrived at in accordance with section 63.
• The PBC seeks that its legal costs incurred on this application be awarded.
• Section 110 of BUGTA a Referee may determine that an application is vexatious in nature. This application is vexatious and should be dismissed with legal costs awarded to the PBC. Plumeria did not oppose the motion considered on 20 March 2006 but simply abstained. Plumeria had planned this application even before the recent motions were considered.
  

The PBC’s submission includes a lengthy statutory declaration from Paul Whiteman, chairperson of the PBC since November 2005. The document sets out a full chronology of the events from 2005 to 2008 and referencing a large volume of supporting documentation. I have reviewed this information, which has been made available to the parties, and will not summarise it further here.

The submission from Trott opposes the application and includes the following arguments:

• Section 14(1) of the Acts Interpretation Act 1954 states that the interpretation of an Act that best achieves the purpose of the Act will prevail. Where a literal meaning will not give effect to the purpose of the Act, it must yield to a meaning which promotes the underlying purpose of the Act. Provisions cannot be read in isolation and must be construed by their context.
• Section 33(1) of the SRA relates to general powers of the PBC. Its purpose is to define the obligations of the PBC in its general and overall capacity as administrator and manager of the ST, in a general caretaking type function.
• The purpose of sections 62-64 is to provide authority for the PBC, subject to the express limits, to deal with the ST. There are no restrictions such as ‘subject to this Act’ or ‘subject to any other provision in this Act’. Other than the exception provided by section 64 and the requirement for Council and special resolution approval, there are no restrictions on section 63. If the legislature intended another provision to restrict the power of the PBC under section 63 this would have been expressly stated.
• Even if section 33 applies, the PBC made the transfer decision for the benefit of its members.
• Section 33 does not require the PBC to document its reasons for a decision.
• The PBC has considered the transfer at 17 PBC Committee meetings, with eight separate legal advices obtained between 2005 and 2007, and a compromise considered PBC in 2005 and 2009. Most PBC members who voted at the EGM attended two site inspections.
• It is reasonable to conclude that members who voted at the EGM would have borne in mind the documents tabled at previous PBC meetings including all legal advice.
• These documents show the issues considered by the PBC include public liability and insurance for the encroachments and the fence; potential litigation; landscaping approval and encroaching structures; and maintenance of the overland flow path and draining pipes.
• The fence and the house were appropriately approved by the PBC.
• The PBC has consistently said it approved the fence. The PBC previously submitted that the fence and landscaping were approved by virtue of the approval of the easement.
• A PBC Committee member (Eliza Macrossen) at the time the easement was granted has written stating that the easement was allowed for then Owner of Lot 90, Austek Enterprises Pty Ltd, to design and build a house to take advantage of the use of the easement. She says it was the intention of the PBC that the Austek have exclusive use of the easement provided that any fence or landscaping would allow the unobstructed drainage of water to the river and that any damage to the landscaping from the passage of water and the maintenance of the easement would be the owner’s responsibility.
• Plumeria Committee minutes do not indicate that they have consistently raised the rights of residents. The first reference to the rights of all Sanctuary Cove residents is not until January 2006. Further, in August 2005 Plumeria Committee agreed to propose that the PBC offer the sale of the floodway to any party and particularly both neighbouring properties.
• A statutory declaration from Trott refers to an on-site meeting with Plumeria Committee member Alan Lock on 14 February 2008. She asserts that Lock said he was happy for the land to be transferred to Trott providing that she paid for it and he objected to her being given the land. She says he gave no indication that he wanted the fence removed because it would benefit owners. When Trott referred the loss of privacy from persons walking down the easement, they assert that Lock said not to worry as no one would use it anyway. This casts doubt on the Plumeria’s stated concern of opening the ST up to all residents.
• The PBC did not ignore Plumeria’s concerns but sought legal advice on them.
• The PBC would have considered the fact that any court proceedings brought against the PBC would not be in the interest of its members regardless of the amount of actual compensation received. Substantial legal costs would have to be expended by the PBC in unrecoverable legal fees in defending potentially several causes of action. It would be unreasonable in the circumstances to require the PBC to provide a quantum of potential compensation.
• Trott seeks orders that the PBC and Trott be given 12 months to effect the transfer in accordance with the approved motions.
  

Reply to submissions

The Plumeria’s reply to the interim and final order submissions includes the following:

• The duties of the PBC under section 33 are a fundamental obligation to be observed in all actions taken by the PBC. This obligation cannot be abdicated just because another section does not specifically state that the duties of the PBC are to be observed.
• If the section 33 requirements did not apply unless specifically stated, then the requirements for insurance, records, payment of monies and so on in section 33 would also not apply.
• The PBC is asking the Referee to set a precedent that any part of the ST can be gifted to any resident or group of residents under section 63 without any right of appeal by others or any formal justification to be documented, if it is agreed to by 75% of the PBC.
• This is an important issue because the developer holds 35.76% of the total votes by lot entitlements, which is just under half the votes required for a special resolution. This voting power is added to if absentee members grant proxies to the Chairperson.
• Plumeria cannot envisage that this was the intention of the legislature. Section 33 must act as a check on the actions of the PBC that disadvantage the minority without justifiable benefit.
• The question of section 33 was directly before Referee Toohey and his comments were not just speculation. He stated in a teleconference that he would defer consideration of section 33 in the expectation that a compromise solution could be worked out between the parties.
• Plumeria objects to claims that the application is vexatious. It is the precinct most affected by the PBC resolution. Whilst the applicant is primarily concerned for the residents of Plumeria, it is conscious that all residents in Sanctuary Cove will enjoy a right of way to this piece of land.
• The PBC has failed in its duty under section 33 in allowing the fence to be built.
• Any investigation would have revealed Lot 90 had never had exclusive use rights.
• PBC claim Plumeria did not vote against the special resolution on 20 March 2006. The minutes are incorrect and should have shown a ‘no’ vote, but regardless the motion required Plumeria consent which was not given. The PBC were informed of the Plumeria Committee resolution that its preferred option was a compromise but that if that could not be reached and the PBC purported to pass the resolution Plumeria would challenge the decision.
• The PBC has sought an award of costs but Referee Toohey has previously stated that, under section 75(7) of BUGTA, a referee has no jurisdiction to make an order for costs.
• Even if costs could be ordered, the matter has reached the current stage because of the PBC’s failure to investigate, consult with members of the 1996 PBC Committee, and resistance to Plumeria’s advice and warnings for nearly nine years.
• After Referee Toohey determined the right of way issue, the PBC failed to negotiate any compromise even though Plumeria made it clear that compromise was its preferred outcome.
• As with the previous application, the PBC continues to act virtually for Trott against the Plumeria community. They would have expected that the PBC would have acted in the interests of the community and not defend action that would disadvantage Plumeria residents.
• Plumeria first became involved in the dispute when the Plumeria’s nominee argued at a PBC Committee meeting on 12 August 1996 against the motion to grant the easement.
• When the front fence was erected in 2001, dividing the ST and prohibiting access by residents, Plumeria drew the PBC’s attention to the fact that the fence was non-compliant and breached the terms of the deed agreed to in 1996. Minutes of a Plumeria committee meeting on 16 May 2001 record that the Committee were told that the owner of Lot 90 had been given exclusive use of the area by the PBC but had not built in accordance with the approved plans and the Architectural Review Committee (ARC) (a PBC subcommittee) were pursuing that.
• The PBC has stated that its justification to transfer the easement to Lot 90 was to regularise exclusive use granted by the PBC in 1996, which was incorrect information.
• In 1996 the PBC had seven members, of which six represented residents and were eligible to vote. Of those six, one is now deceased and another is uncontactable. Statutory declarations are provided by three members who voted in for the grant of easement in 1996 (Arthur Carolan, John Reid, Beverley Goss), and a statement is provided by a fourth (J Roger). These statements contradict Macrossen, who did not hold a right to vote at the meeting.
• Reid participated in the Executive Committee meeting on 17 June 1996 which first considered the proposal. He says the proposal was presented verbally by Macrossen from Sanctuary Cove Management, with no notice or supporting papers, on the basis that the principal of Austek, who had developed several homes in the precinct, was building a home on Lot 90 for his own occupancy (although the house was sold actually on completion). Reid says there was no doubt that the area was to remain publicly accessible and that when he asked the proponent for assurances that the area would not be enclosed, Macrossen included the enjoyment of local residents as one of the benefits of the proposal. Reid says that other than the motion at the EGM on 12 August 1996 which formalised the Executive Committee’s agreement, the matter was not discussed at any further PBC meeting. Neither he nor, to his knowledge, any other resident member nominee were aware that the easement application was rejected or that it was only recorded almost two years later after the purpose was altered from that which had been agreed. He was not aware the house on Lot 90 was built contrary to the development control by-laws and over the boundary, or that the application to build was reconsidered by the ARC several times between September 1997 and October 2001, or that the landscaping plan included a fence, or any details of the fence until after it was erected.
• Goss confirms that she never agreed to exclusive use of the overland drain path. She indicates that the PBC Committee was not disposed to grant Austek any special favours.
• Carolan says the proposal was put up as an economically viable means of beautification and that the Owner of Lot 90 would build his own home on the lot and be responsible for the cost of landscaping and maintenance of Lot 70. He was in no doubt that the area would remain separate from Lot 90, be unfenced from the street and river, and that landscaping would be subject to approval. He disputes that the area was to be enclosed for the benefit of Lot 90 rather than enhanced for the benefit of all owners. He says he was never approached with an alternative proposal and was not aware that the easement had been rejected.
• Rogers confirms that the benefit of the easement was not exclusive and the area was to be open to the public. He is not aware of any proposal to alter the resolution.
• The Land Registry refused to register an easement for landscaping and beautification of public land. The registered easement is for drainage, which is on the title of the land Trott acquired.
• Referee Toohey has already determined the right of way of residents over the ST.
• Trott purchased Lot 90 with an easement that had very little benefit to Lot 90, which was available to view on the public record, and so any premium which might have been paid for that easement was unwisely spent. This would be taken into account in any litigation.
• The easement documentation includes a certificate dated 16 August 1996 pursuant to section 18 of the SCRA that the PBC had passed a special resolution granting an easement for drainage. This was an error of judgement at best and at worst a false declaration.
• The front fence was erected in 2001 and the easement area was allowed to be maintained exclusively by Lot 90 either because the PBC misunderstood the easement terms or the PBC or associated persons intended to provide Lot 90 a benefit at the expense of other lot owners.
• The PBC has ignored all objections of Plumeria regarding the fence.
• Plumeria now considers the PBC intends to provide Lot 90 with a benefit of a gift of public land regardless of the background, objections and loss of benefits to other residents.
• The PBC’s opinion of section 33 is subjective. Plumeria refers to the Collins English Dictionary definitions of control, manager and administer. On this basis it submits that the duties in relation to the ST extend far beyond just maintenance. It also note there is no reference in the SCRA that section 33 will not be considered in any decision under section 63.
• If section 33 does not apply to section 63 there would be no obligation for PBC members to provide reasons or justifications and the special resolution would not have to be in the interests of residents. However, if it does apply the PBC’s reasons and justifications are vital.
• Plumeria disputes the PBC’s interpretation of Referee Toohey’s order, which supported compromise. Referee Toohey’s final orders were issued on 24 June and motions for the transfer were tabled at a PBC Committee meeting on 28 July 2008 with no intention to seek mediation or compromise but just a determination to proceed with the original plan of transfer.
• In regard to PBC claims the transfer is necessary to avoid liability or costs in relation to Lot 70:
  • ­ The block wall separating the easement area from Lot 50 collapsed and the PBC paid to rebuild it. It is unlikely there will be any further maintenance cost from this newly built and solid wall. So there is no logical reason to expect any future cost.
  • ­ Many floodway areas of the ST have one block wall and some have two. Plumeria is not aware of any proposal to gift the transfer any of these areas to neighbouring lots.
  • ­ The PBC already accepts the costs associated with landscaping all parks and floodway easements, all of which are publicly accessible, and the cost of this area is no different.
  • ­ The easement terms require Lot 90 to pay for the maintenance of the area should Trott should be responsible for landscaping and gardening when the front fence is removed.
  • ­ There is no unusual or exceptional liability or future cost in respect of the easement area.
• The PBC claims the transfer is necessary to regularise the relevant part of Lot 70. Plumeria has no objection to a boundary adjustment sufficient to ensure that the encroachment area of land was transferred to Lot 90 so that the whole building is located on Lot 90 land. But Plumeria submits that this does not provide any justification for transfer of the entire easement area. Attempts to regularise a prima facie unlawful situation by a gift of land against the objection of affected residents is not reasonable and is not for the benefit of the members.
• In regard to PBC claims the transfer is necessary to avoid litigation if the transfer was not approved and the landscaping removed:
  • ­ Plumeria acknowledges the possibility of litigation. However its legal advice is that the probability is low due to the cost that Lot 90 would incur and the poor chance of success in being awarded substantial damages.
  • ­ Nowhere in the numerous legal advices to the PBC is there a comprehensive opinion on the extent or cost of any liability to the PBC if the fence is removed.
  • ­ All the advice is based on the assumption that the true intention of the PBC in 1996 was to grant exclusive use to Lot 90, which is false.
  • ­ The legal advice also assumes a desire to revoke the easement. Plumeria has never suggested this and has no objection to the terms of the original agreement.
  • ­ Whiteman confirms that the claim of a $1,000,000 plus damages claim was his subjective and personal opinion which was not supported by any expert opinion.
  • ­ Whiteman also told the Committee that compensation costs could be up to $2,000,000 on the basis that the PBC could be required to purchase Lot 90.
  • ­ A local real estate agent engaged by Trott advised in March 2008 that the impact of removing the front fence and opening the easement area up would reduce the value of Lot 90 by ‘at least $100,000’. This estimate is based on the assumption that no fence or plantings for privacy and security would be allowed between Lot 90 and the easement, which is incorrect. As such Plumeria’s solicitors refute this suggestion.
• In August 2005 a certified valuation of the easement land was obtained, valuing the easement land at $140,000. Therefore the transfer of the land would result in an economic loss to residents of $140,000 aside from the loss of the amenity of open land and visual ambience.
• In regard to the Trott’s privacy concerns, sympathetic landscaping would continue to provide necessary privacy, as has been provided for similar buildings adjacent to other areas of ST.
• No evidence has been provided that the PBC has considered and approved the building, landscaping or fence on Lot 90 or Lot 70 under the Development Control By-laws. The ARC may have made recommendations but it has no decision-making capacity.
• The PBC had no power to approve a fence on the ST which contravened section 56.
• A statutory declaration is provided from Alan Lock disputing the statements made by Trott in regard to their meeting on 18 February 2009.
  

Investigations

The inspection conducted on 21 April 2009 primarily sought to focus on issues relating to the physical space and features of the area in dispute, but also ranged into more general discussions. Information of note which I ascertained during the inspection included:

• There does not appear to be much general community interest in using the area, and public access to the river very close by allegedly receives little use. This was accepted by the Plumeria representatives, who said it was about the principle of public land being accessible.
• Unless the current landscaping was removed, any publicly accessible area would be relatively narrow. If a fence was installed between the easement area and Lot 90, which would be desirable for security purposes, the accessible area would be even more constrained, particularly depending on where any such fence was located.
• The location of the electrical substation in the middle of the entrance to the easement area would also limit any public access to the easement area if the front fence was removed[3].
• I received a general impression of poor communication over a long time between the parties, with the lack of consultation and communication exacerbating the dispute.
• I was struck by the lack of knowledge of or agreement on basic factual circumstances, such as who had made various decisions or proposals, when decisions had been made, and when construction and improvements had occurred on Lot 70 and 90.
• There was a suggestion that the house on Lot 90 was built in 1999 before the ARC had even considered the plans for the building, and that the original owner had built the fence.
• Comments by Trott indicated that she believed she had exclusive rights to the easement area and, for example, that the plants on the easement area were her property.
• Comments by the PBC Chairperson indicated a belief that the ST was for the PBC to deal with however it wished.
• The PBC Chairperson clearly acknowledged that previous PBC members had been cavalier in its adherence to legal requirements and that mistakes had been made. He said the current Committee was simply trying to rectify the situation.
• In response to queries about the potential for the land to be sold rather than simply given, Plumeria indicated there was no Committee decision on this issue but that a sale would be better than the land being given away. The Trotts expressed concern over the improvements and expenses they had paid for, but indicated that they would buy the land if they had to.
  

The information provided by the PBC in response to my numerous written queries included:

• The PBC has not previously transferred ST or, to its knowledge, contemplated this. The current proposal is an exception due to the peculiar circumstances and historical usage.
• All ST lots which abut water provide public access to the river or harbour, except Lot 70.
• Lot 70 is the only ST lot abutting water that is burdened by an easement.
• Several ST lots abutting easements are benefited by an easement. These easements are generally for the conduct of stormwater, sewerage, drainage or electrical services.
• Other areas of ST abutting the river have block walls, although none have easements.
• The PBC is unable to find any record of who originally built the block wall on Easement D.
• The current wall is new but will require maintenance from time to time.
• No insurance risk assessment has been undertaken as to any insurance risk on Easement D.
• As the PBC is not in control of the area and does not inspect or maintain it, the risk of injury or damage caused by hazards or lack of maintenance, and resulting liability, is greater than if the PBC had control. As such, there are greater risks over this area than other parts of the PBC.
• The PBC currently has no expenditure on the maintenance of the easement area.
• The PBC has not obtained legal advice on the prospects of success of any legal action by the Trotts, or the quantum of potential damages. Legal advice in October 2007, which set out grounds for several legal actions, informed the PBC as to the risk of legal action. This advice included a conclusion that a ‘likely outcome’ may be a finding that exclusive use had been granted, and that remedies other than damages may be considered.
• Advice to the PBC was that legal action was likely to be expensive, complex and protracted. The transfer was appropriate as other courses of action were uncertain and likely to be costly.
• The PBC accepts that claims under section 180 and 184 of the Property Law Act 1974 may, if successful, result in Trott being required to compensate the PBC.
• Improvements on the ST currently require a PBC resolution, usually an ordinary resolution.
• The PBC is unable to speculate as to what approval process was in place when the fence and landscaping were approved.
• It appears that the landscaping on Easement D commenced and was substantially completed between March and August 2001, by the then owner of Lot 90.
• It is difficult to determine but the PBC may have approved the landscaping. The landscape plans are stamped on 15 June 2000 as approved by the PBC. On 29 August 2000 the PBC resolved that “...the landscape plan be declined as the conditions and intent of the easement use only relate to soft landscaping and not paving, rocks or large trees”. The plans dated August 2000 are sealed with the Common Seal of the PBC on 18 August 2001. PBC minutes of 16 October 2001 refer to the easement being landscaped by the owner of Lot 90 in accordance with the easement documents.
• The PBC has no records as to who constructed the front fence or when. There is no record of the PBC approving the fence. On 20 September 2001 the ARC declined an application from the original owner of Lot 90 for horizontal timber slats on the front fence and resolved that the original approved front fence be installed. The PBC is cannot confirm whether this is a reference to the fence on Easement D.
• The PBC cannot speculate as to whether there was ever an intention to grant exclusive use rights over the easement area. They refer only to the original easement grant, a minuted reference to a commercial benefit to the original owner of Lot 90 in respect of the easement, the minutes which envisage a front fence, and apparent approval of the landscaping plans.
• The Trotts and previous Lot 90 owners have, in practice, used the area privately for 10 years.
• The building on Lot 90 was apparently approved by the ARC on 17 August 2000 on the basis that no part of the building was in the easement area and that approval was subject to the PBC approving the landscape plan. The plans are stamped as approved on 18 August 2000.
• It appears the encroachment was first identified in a surveyor’s report of 9 September 2004.
• The transfer is the only action taken by the PBC to regularise the encroachment.
• As a minimum, the PBC would require a transfer that allowed a set-back of 2.5 metres from the house to the boundary pursuant to section 2.7.1 of the Development Control By-laws.
• While 2.5 meters could be transferred to regularise the area, this would not be satisfactory as it would result in a narrow strip of ST facing the Trott’s lounge room.
• There is no power in the SCRA for the PBC to receive ‘consideration’ for the transfer of part of the ST, nor would the PBC be entitled to deal with the ST on that basis.
• The PBC levies proprietors in accordance with annual budgets and there is no mechanism to trade, make a profit, or deal with the proceeds of any trade or profit-making activity.
• The land in question was valued in 2005 at $140,000 excluding GST.
• The PBC estimates that the current tally of costs that it would seek to recover in respect of the transfer would be around $30,000.
• In respect to Plumeria claims of a parallel with Lot 1 The Circle, the PBC refutes any similarity. It notes there is no easement and no history of private usage or potential legal liability.
  

The response from Trott to my queries and the information provided by the PBC included references to previous submissions and the following:

• In regard to the PBC’s responsibilities or liabilities in relation to the encroachment onto Lot 70, the PBC must insure the ST and an encroachment may invalidate the PBC’s insurance. The PBC also is responsible for maintaining the ST, including encroachments on it.
• Trott will bring proceedings against the PBC to enforce her rights if agreement is not met. In addition to claims under the Property Law Act 1974, a claim could be made in equity.
• There would be significant costs to the PBC in responding to applications under the Property Law Act 1974, even if Trott were responsible for compensating the PBC for the easement area. Trott could also apply for costs to be awarded against the PBC. Therefore the potential legal costs to the PBC for an application could amount to $100,000 to $250,000.
• Equitable relief to prevent the removal of the fence could be based on estoppel, waiver by conduct, enforcement of varied easement arising in equity and misrepresentation. If the easement is opened, Trott would suffer a loss which may be recoverable as equitable damages. Damages could be awarded on the amount of the loss of value of Lot 90 (estimated in the order of $100,000), the costs of landscaping the easement, and legal costs.
• Landscaping costs incurred which may be recoverable include the costs of a watering system, lighting, plantings, the digital automation of the horticultural aspects of the easement area under the CBUS computer system, and the installation of a spoon drain. These costs are amount to around $19,300. Details of Trott’s expenditure on landscaping of the easement area totals over $36,000 between late 2003 and early 2009.
• It is evident that the true purpose of Easement D as approved by the PBC Committee in 1996 was not properly reflected in the registered document. The approval of the fence is consistent with the intention that Easement D be used for landscaping and beautification.
• By approving the fence and the consistent conduct of the PBC, the PBC has evidenced by its continued support for the position that exclusive use rights were granted to Lot 90.
• A search of the PBC records prior to her purchase in August 2003 would have revealed the sealed landscaping approval dated 18 October 2001, the approval of the fence (ARC minutes of 20 September 2001 and PBC Executive Committee minutes of 16 October 2001), and the conclusion that the PBC granted exclusivity (Plumeria Committee minutes of 16 May 2001).
• At the time of purchase, Trott understood that the PBC had entered into an agreement with the original owner which gave Lot 90 the right to restrict access to the easement area to all but the PBC. Trott fairly concluded that because of the fence, which was erected at least two years prior to her purchase and was approved as part of the landscaping approval.
• Trott also concluded that because Easement D required her to pay for all maintenance, lighting and landscaping costs for the area, she was entitled to control the landscaping and lighting by restricting access to anyone other than the PBC.
• A statutory declaration is provided from a former Plumeria owner and Committee member (Gary Medley). He understood Easement D was granted to Lot 90 for landscaping providing that the overland flow path was unobstructed; that the fence was erected to preserve this use; and that all residents of the street shared this view. He has no recollection of the issue of the fence being raised prior to November 2003, at which time the PBC’s approval of the fence and easement was noted. He also notes that prior to Trott’s purchase the easement was dishevelled and not maintained, but that after Trott’s purchase it improved dramatically.
  

The response from Plumeria to these matters included:

• Reference is made to the situation of Lot 1 The Circle, in Schotia Island (GTP 107106) which shares a boundary with ST floodway Lot 117. The entrance to the Lot 1 garage faces the ST lot. In early 2008 the Owner of Lot 1 offered to fund a driveway across the ST to the garage entry and to be responsible for landscaping and maintaining the floodway area. The PBC determined that such costs were the PBC’s responsibility. While there is no easement involved, Plumeria notes there was no suggestion of gifting the ST to the owner of Lot 1.
• The views of Medley are not and have not been the views of the Plumeria Committee or residents and have been consistently rejected by Plumeria since 16 May 2001. Records show Plumeria’s first engagement in the dispute was on 16 May 2001. The opinion that his views were shared by other residents is subjective, speculative and uninformed. A letter from a long term owner is provided disputing that all residents in the street shared his view.
  

Additional information later provided by Trott includes the following:

• A certificate of the PBC executed under seal[4] confirming that a special resolution was passed granting an easement “...for drainage and for landscaping and beautification purposes including the establishment, preservation and conservation of flora of any and all description”.
• A Form 9 easement document, purportedly executed for the PBC on 8 September 1997, for the purpose outlined in the above certificate. The easement form was executed five months after the registered easement form was executed on 26 March 1997.
• The attached easement (Form 20) provides extensive provisions for landscaping of the area providing that the use of the land for drainage purposes is not interfered with or obstructed. It also notes the Grantor may not erect any buildings or structures other than boundary fences.
• Both documents were obtained from the developer.
• The September 1997 easement document is valid and enforceable on a contractual basis; reflects the equitable agreement which was entered into between the PBC and the original owner; and its terms are effective as a covenant touching and concerning the land.
• The September 1997 easement document obligations are more expansive and are clearer than the registered easement and were executed after the registered easement.
• The September 1997 documents are evidence that the registered easement is not exhaustive in its terms. It demonstrates the PBC’s intentions at the time regardless of whether the document was registered. It clarifies the intended terms of the registered easement and may have been intended to be read in conjunction with it. It is prima facie evidence of the PBCs approval and agreement in respect of land under section 59 of the Property Law Act 1974.
• The document is further evidence of the previous arguments presented by Trott.
  

In response, Plumeria comments:

• Plumeria does not wish to comment on the legal issues between Trott and the PBC.
• The Forms 9 and 20 provided do not appear to have been registered. This is no doubt because an easement for landscaping and beautification had been rejected.
• Notwithstanding uncertainties in the registration of the Forms 9 and 20, Plumeria agrees with the PBC that in 1996 the PBC resolved to grant Lot 90 a conditional right to landscape and beautify the easement area for the benefit of Lot 90 and the wider Sanctuary Cove community.
• Plumeria considers that the wording of the forms is consistent with that limited decision. There is no reference in those forms to exclusivity.
• As the easement grantor was the PBC, reference in Form 20 to boundary fences can only refer to fences between the Lot 90 and Lot 70 or between Lot 50 and Lot 70.
• Having now had the assistance of the original developer and its architect and lawyer, Trott remains unable to produce evidence that Lot 90 can claim exclusive use of the area.
• Any contrary view held by Trott at the time of purchase must have originated from the vendor.
  

DETERMINATION

The substantive issue in this dispute is whether the PBC was entitled to pass a resolution on 29 September 2008 to transfer the area covered by Easement D to Trott, and whether it can give effect to that resolution. In considering this issue, further questions arise, such as:

­ Whether Easement D was validly authorised and registered;
­ Whether the landscaping and fence constructed by the previous Owners of Lot 90 on the easement area were validly authorised;
­ Whether the PBC ever granted, or purported to grant, or led Trott to believe that it had granted Lot 90 exclusive use rights in respect of the easement area.
­ In what circumstances the PBC is entitled to transfer this part of the ST to Trott;
­ Whether those circumstances have been met in this instance; and
­ What impact the transfer would have on owners in Sanctuary Cove.

I note that considerable difficulty has arisen in this application in regard to the apparent absence of many historical records relating to decisions, processes and actions taken by the PBC, particularly relating to the registration of the easement and the approval of the building, landscaping and fencing on Lots 70 and 90. In addition, the significant volume of material, along with continual extensions sought by parties, has also delayed the final determination of the dispute.

In parts my discussion necessarily covers ground considered by Referee Toohey in the previous application and, where appropriate, explores some issues further. However, in essence I concur with Referee Toohey’s conclusions.

Applicable law

Several sections of the SCRA are relevant. Of most significance are sections 33(1) and 63:

33 Duties of principal body corporate

(1) The principal body corporate shall—

(a) control, manage and administer the secondary thoroughfare for the benefit of its members; and

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

(i) the secondary thoroughfare, including any improvements thereon;

(ii) any personal property vested in it; and

63 Dealings with land comprising secondary thoroughfare

Except as provided in section 64[5], no part of a secondary thoroughfare may be subdivided, transferred or leased without the prior approval of—

(a) the principal body corporate given by special resolution; and

(b) the Albert Shire Council.

Other relevant provisions of the SCRA are as follows:

23 Principal body corporate

(1) Upon registration of the initial plan of survey, the proprietor or proprietors of all the initial lots within the residential zones of the site shall by virtue of this Act be a body corporate under the name ‘Sanctuary Cove Principal Body Corporate’.

(1A) Upon registration of the initial plan of survey of the adjacent site, the proprietor or proprietors of all the initial lots within the residential zones of the adjacent site shall be members of the principal body corporate.

(2) When an initial lot is subdivided into secondary lots (whether or not lots for secondary thoroughfares are thereby created), the proprietor of the initial lot shall cease to be a member of the principal body corporate and the proprietor or proprietors of the secondary lots shall become a member or, as the case may be, members of the principal body corporate.

(3) When a secondary lot is subdivided by way of a group titles plan or a building units plan, the proprietor of the secondary lot—

(a) shall give notice in writing to the principal body corporate of the name and address or service of notices of the body corporate incorporated by the registration of that plan; and

(b) shall cease to be a member of the principal body corporate, and the body corporate created by the registration of that plan shall become a member of the principal body corporate.

(4) Subdivision or resubdivision of a lot or a lot and common property on a group titles plan by way of a building units plan or a group titles plan does not affect the membership of the principal body corporate.

...

(6) Subject to this Act, the principal body corporate shall have the powers, authorities, duties and functions conferred or imposed on it by or under this Act, the development control by-laws or the residential zone activities by-laws and shall do all things reasonably necessary for the enforcement of the development control by-laws and the control, management and administration of the secondary thoroughfares. [my emphasis]

...

(8) The principal body corporate may—

(a) sue and be sued on any contract made by it;

(b) sue for and in respect of any damage or injury to the secondary thoroughfares caused by any person;

(c) be sued in respect of any matter connected with the secondary thoroughfares for which as proprietor it is so liable;

(d) take such legal action as may be necessary to enforce the development control by-laws and the secondary thoroughfare by-laws.

...

28 Secondary thoroughfare by-laws

(1) Subject to subsection (5), the principal body corporate, pursuant to a special resolution, for the purpose of the control, management, administration, use or enjoyment of the secondary thoroughfares, may from time to time make by-laws and may in like manner amend or repeal those by-laws.

(2) A secondary thoroughfare by-law has no force or effect until the Minister has approved the by-law and notification of the Minister’s approval has been published in the gazette.

(3) A lease of a lot or of any common property where access to the primary thoroughfare is through a secondary thoroughfare shall be deemed to contain an agreement by the lessee that the lessee will comply with the secondary thoroughfare by-laws for the time being in force.

(4) Without limiting the operation of any other provision of this Act, the secondary thoroughfare by-laws for the time being in force bind the principal body corporate, each member of the principal body corporate and each registered proprietor and any mortgagee in possession (whether by himself or herself or any other person), lessee or occupier, of a lot within a residential zone to the same extent as if those by-laws had been signed and sealed by the principal body corporate, the members of the principal body corporate and each registered proprietor and each such mortgagee, lessee and occupier respectively and as if they contained mutual covenants to observe and perform all the provisions of those by-laws.

(5) No amendment of or addition to a secondary thoroughfare by-law shall be capable of operating to prohibit, destroy or modify any easement, service right or service obligation implied or created by this Act.

56 Occupier’s right to use thoroughfares

(1) Subject to the application of any primary thoroughfare by-law or any secondary thoroughfare by-law, every person who lawfully occupies any land within the site or the adjacent site has a right of way over the primary thoroughfare and the secondary thoroughfare.

(2) A primary thoroughfare by-law or a secondary thoroughfare by-law that, but for this subsection, would have the effect of unreasonably restricting access to or access from any land within the site or the adjacent site shall in respect of that land have no force or effect unless the person for the time being entitled to occupy that land consents in writing to that restriction.

(3) For the purposes of this section, where land is the subject of a registered mortgage, the mortgagee shall be deemed to be a person who lawfully occupies that land.

Pursuant to section 14(1B) of the SCRA, once a lot or common property shown on the plan as ST is transferred to the PBC, the lot or common property ceases to be part of the parcel shown on the group titles plan for the purpose of BUGTA. Therefore, while the provisions of BUGTA apply to lots within each of the group titles plans in Sanctuary Cove, such as the lots within Plumeria, only the SCRA applies to the PBC and the ST.

Easement D

Easement D is recorded as having been registered on 30 June 1998, purportedly pursuant to a special resolution of the PBC on 12 August 1996. Issues arise as to the validity of this easement.

Creation of easements

Section 18 of the SCRA provides for the creation of easements. Easements can be granted, accepted, and surrendered if the PBC agrees by special resolution. In addition, section 16 provides as follows for various implied easements:

16 Services

In respect of each initial lot and each secondary lot there shall be implied—

(a) in favour of the proprietor of the lot and as appurtenant thereto, easements for the passage or provision of services (including water, sewerage, drainage, gas, electricity, garbage and telephone) through or by means of any pipes, poles, wires, cables or ducts to be laid down or erected or which are for the time being existing in or over the primary thoroughfare and the secondary thoroughfare to the extent to which those services are capable of being used in connection with the enjoyment of the lot;

(b) as against the principal body corporate and to which the lots comprising the secondary thoroughfare shall be subject, easements for the passage or provision of services (including water, sewerage, drainage, gas, electricity, garbage and telephone) through or by means of any pipes, poles, wires, cables or ducts to be laid down or erected or which are for the time being existing within any of those lots as appurtenant to the initial lots and secondary lots;

(c) as against the primary thoroughfare body corporate and to which the lot or lots comprising the primary thoroughfare shall be subject, easements for the passage or provision of services (including water, sewerage, drainage, gas, electricity, garbage and telephone) through or by means of any pipes, poles, wires, cables or ducts to be laid down or erected or which are for the time being existing within any of those lots as appurtenant to the initial lots and secondary lots;

but the easements conferred by this section shall not be exercised by any proprietor in such a manner as unreasonably to prevent any other proprietor from enjoying the use and occupation of the proprietor’s lot or the use of the primary thoroughfare or the secondary thoroughfare.

Section 17 of the SCRA provides that “...all ancillary rights and obligations reasonably necessary to make easements effective shall apply...” for easements created under section 18 or implied under section 16.

Scope of the PBC authorisation

The special resolution passed by the PBC on 12 August 1996 provided as follows:

Moved that the Sanctuary Cove Principal Body Corporate in pursuant to Section 18 of the Sanctuary Cove Resort Act 1985 (as amended) confer the benefit of a Grant of Easement for landscaping and beatification over part of Lot 70 on the Group Titles Plan known as the Proprietors “Plumeria” group Titles Plan No. 2207 upon the Grantee from time to time on the following conditions:-

1. The profile of the area that is subject to the easement must be maintained at all times to provide the facility of overland flow.
2. Full landscape plans detailing what will be planted on the easement must be submitted prior to any construction commencing on Lot 90 and the easement area.
3. All costs relation to establishment and maintenance shall be borne by the Grantee from time to time.
   

Certification is included with the registered easement documents that a special resolution was passed approving the easement. This certification is dated 16 August 1996 and signed by the then secretary and a member of the PBC Executive Committee. The original typed wording of the certification referred to an easement for ‘landscaping and beautification’. These words have been crossed out at some point and replaced with the handwritten word ‘drainage’. The amendment is initialled but it is not clear who initialled the change and the amendment is not dated. The handwriting is the same as the change to the same words on the easement registration form (which presumably occurred shortly before the easement was accepted by the Registrar of Titles).

The unregistered certification provided by Trott is not dated, although the year 1997 is included. The purpose of the easement described in the certification is beyond the terms of the resolution of the PBC on 12 August 1996, in respect of the reference to drainage and the “...establishment, preservation and conservation of flora of any and all description”. The certification does not indicate the names of the persons purportedly signing it, unlike the registered certification.

I am satisfied on the evidence, particularly the statements of the four PBC voting members at the time the easement was authorised and the absence of any relevant minutes, that no amendment to the easement purpose was ever returned to the PBC for approval. Therefore, I find that approval for an easement benefiting Lot 90 is limited to the August 1996 resolution.

Recording of Easement D

In the recorded easement document the PBC grants the Owner of Lot 90 “full right and liberty ... from time to time for drainage purposes”. The PBC undertakes to maintain the easement area “...in good repair and condition and keep it cleansed, properly lighted, and unobstructed at all times”, but this requirement is subject to Lot 90’s obligation to pay the costs and expenses in relation to the upkeep and maintenance. The PBC also undertakes to establish and upgrade the easement area in accordance with the scheme’s by-laws.

It is apparent that the original easement request was rejected or requisitioned by the Registrar of Titles on several occasions. I also note that the PBC Executive Committee minutes of 20 October 1997 indicate some difficulty in locating documentation relating to the easement registration. Although no information appears to be available for why the proposed easement was rejected, the fact that it was accepted after the purpose was changed implies that the Registrar of Titles had concerns with an easement for “beautification and landscaping”. Certainly it is my understanding that beautification or landscaping would be a quite unusual purpose for an easement.

At some point, although no date is evident, the easement application was amended to record the purpose as for ‘drainage’. Some submissions and legal advice suggest that this purpose was ‘wrong’ but this point is not further explained. It cannot be concluded from the registered document that the easement was inadvertently recorded for drainage. There was a clear, initialled annotation on the registration form and certification. Although it is unclear who made the change (and, as indicated, there is no evidence that it was a change considered or authorised by the PBC itself) or why, the annotations demonstrate that the change was deliberately made.

The reason for a ‘drainage’ easement is unclear, and there is no documentation relating to this purpose. There does appear to be some agreement that there was no requirement for a drainage easement at the time. Even if an easement for drainage was required, it is not necessarily the case that it needed to be registered because section 16 arguably already implies an easement for drainage. Furthermore, even if there was an original need for an easement for drainage, there are certainly indications that it is not necessary now.

The circumstances of the repeated requisitions lead to conjecture that ‘drainage’ was chosen as the purpose of the easement simply to get something formally recorded, given that the originally intended purpose of the easement was apparently unable to be registered. However, there is no evidence to substantiate such conjecture and it does not appear to be possible to ascertain with any further clarity what occurred or why.

I am not satisfied that the unregistered Forms 9 and 20 alter the view of this situation. The forms add little beyond being a potential draft that was either not progressed by the PBC or were rejected by the Registrar of Titles. I do not consider the fact that the Form 9 was executed by the PBC after the initial Form 9 is significant. Clearly the Form 9 which was ultimately recorded was amended after September 1997. It is again conjecture, but it may have been that when the landscaping easement was first rejected, a further version was attempted which added drainage, and that when that attempt was similarly rejected a drainage-only easement was progressed.

Validity of Easement D

The issue at this point is whether Easement D was in fact validly registered. The PBC received legal advice suggesting that the easement was valid[6]. However, while the easement might (eventually) have complied with the requirements of the Registrar of Titles, this does not necessarily mean that it complied with the requirements of section 18 of the SCRA.

Although there is no doubt that the PBC approved the grant of an easement, I am of the view that the easement it approved was not the easement that was ultimately recorded. I consider the purpose of the easement which was actually recorded was so substantially different from the intended easement which was authorised that the PBC resolution on 12 August 1996 cannot be considered as effective as an authorisation of Easement D as recorded.

The parties have not sought orders in regard to the validity of Easement D and so it is not necessary for me to make specific findings in that regard. It is also beyond the scope of this application and my authority as a Referee to make any determination on whether Easement D, if valid, has been varied by equitable agreement. However, based on the material provided, I am inclined to the view that Easement D was not validly authorised by the PBC.

Scope of Easement D

If valid, Easement D only provides a right in respect of drainage. It does not give Trott rights in respect of landscaping, fencing or exclusivity. This should have been very apparent to any person searching the title. While section 17 of the SCRA does provide for ‘ancillary rights and obligations’ to apply, it is difficult to envisage how a right to landscape, fence or have exclusivity could be interpreted as ‘reasonably necessary’ to give effect to an easement for drainage.

There appears to have been a belief by Trott that she is responsible for undertaking maintenance, landscaping and lighting of the easement area, and also for putting drainage into the area. No documentation has been presented to me to indicate how this belief or expectation arose but it is not, in my view, based on the terms of the easement. Rather, the easement terms require the PBC to undertake any such work. Furthermore, there is a query as to whether, because section 33(1)(b)(i) of the SCRA requires the PBC to maintain the ST, including any improvements on the ST, the PBC could give its maintenance responsibility away through an easement in any event.

Some easement costs associated are to be reimbursed by Lot 90 under the easement terms. The special resolution indicated an intention that Lot 90 be responsible for costs of establishing and maintaining the easement area. Liability for maintenance is contemplated in the easement document, but not establishment costs. Therefore, while the easement terms provided for Trott to reimburse the PBC for general gardening and maintenance costs, it is arguable that Trott was not responsible for new infrastructure like the drain and lighting.

In her submissions on the previous application on this matter[7], Trott asserted that parties may, by their conduct, vary the terms of a registered easement[8]. Trott argued that just because terms were not reduced to writing or registered on the title does not mean they are not enforceable. She argued that Easement D was varied to include a right by Lot 90 to prevent access to the area, and this was granted by virtue of the approval for the front fence, its construction, and the reliance on the landscaping approval and use of the fence. These issues were not pursued in this application, although Trott has argued that there was an equitable agreement and that the September 1997 version of the easement terms were a covenant and enforceable on a contractual basis.

Arguably it would be beyond the scope or role of a referee to determine the existence and terms of any contract, covenant or equitable agreement. However, I do not accept that the terms of the unregistered Form 20 are of particular significance in ascertaining the rights and obligations that bind the parties to the easement. The registered Form 20 must have been a later version, in that it was registered in June 1998 and refers only to drainage once (presumably) landscaping was rejected. Therefore the September 1997 version appears to have been at most an unsuccessful attempt that was superseded. It seems difficult to argue that it could be a greater indication of the PBC’s intentions that the minuted resolution or the ultimately registered document. Moreover, as Trott clearly only became aware of that version very recently, she cannot argue that she was a party to the document, had rights under it, or acted in reliance on its terms.

Moreover, regardless of whether any variation or addition to the registered easement was ever intended by the PBC (and I am not satisfied that I have been provided with any evidence of that), I would suggest that any such intention would necessarily be limited by express provisions of the legislation. Therefore, while an individual may potentially vary the terms of an easement by their conduct, it is arguable that the PBC could not amend an easement to the extent that the amendment substantially altered the purpose of the easement without approving the substantially new easement under section 18 of the SCRA. Furthermore, section 56 of the SCRA would arguably limit any variation of an easement to the extent that it would restrict access to the ST.

Implied easements

Trott has also argued (again in her submission to the previous application)[9] that even if the grant of Easement D was not valid (which she disputed) there was an implied easement granted by virtue of section 16 of the SCRA. This issue was not argued in this application and so it is not necessary for me to determine. However, for completeness, I would make two observations on the point.

Firstly, while section 16 would provide for an implied easement for drainage, it is not apparent that an easement for activities of the nature of ‘landscaping’ or ‘beautification’ would fall within the scope of section 16. That section refers to easements “for the passage or provision of services (including water, sewerage, drainage, gas, electricity, garbage and telephone) through or by means of any pipes, poles, wires, cables or ducts...”.

Secondly, even if the scope of the activities undertaken by the current and previous Owners of Lot 90 on the easement area fell within the scope of an implied easement (which, aside from any overland flow path, seems difficult to sustain), the fence and the restriction of public access to the area would fall foul of the requirement in section 16 that “...the easements conferred by this section shall not be exercised by an proprietor in such a manner as unreasonably to prevent any other proprietor from enjoying the use and occupation of the proprietor’s lot or the use of the primary thoroughfare of the secondary thoroughfare.” Furthermore, section 56 of the SCRA would arguably limit any implied easement to the extent that it would restrict access to the ST.

Rights and obligations in respect of the Secondary Thoroughfare

Right of way

In the previous application Referee Toohey found that all occupiers of Sanctuary Cove have a right of way over the easement area under section 56 of the SCRA. The application of section 56 is subject only to the principal and secondary thoroughfare by-laws, and there are no relevant restrictions in those by-laws. Referee Toohey was not satisfied that there was any action by the PBC or Plumeria which gave Trott the right to restrict access to the area. He found that, even if it risked legal action by Trott, it was necessary to restore access as required by section 56 if the parties could not reach agreement to transfer the disputed area to Trott. I concur with this view.

There is an argument in the submissions that section 56 does not apply if there is a decision to transfer the ST under section 33 of the SCRA. My reading of Referee Toohey’s remarks, and my own conclusion, is as follows. If part of the ST is validly transferred under section 33 then, once the transfer is registered on the title (but not just when a resolution is passed approving a transfer), the area in question will cease to be ST and section 56 will cease to apply. Up until the point that the transfer is effected, access is required to be maintained under section 56. However, the fact that the transfer will, after transfer, alienate occupiers from the land is not contrary to section 56 and so is not of itself a basis for invalidating a decision to transfer the land that is otherwise valid.

Improvements to the secondary thoroughfare

The SCRA does not provide specifically for improvements to the ST, other than section 62 which provides that the PBC is responsible for the maintenance and reconstruction (including construction on relocation) of roads and any other improvements on the ST. As the legislation primarily contemplates the ST for the purpose of roads it appears to give little further contemplation to the use and activity on parts of the ST that are not a road. The Secondary Thoroughfare By-laws similarly focus on the use of the ST as a road and do not provide for other activity on the ST.

The PBC advises that improvements to the ST currently require a PBC resolution, usually being an ordinary resolution. Surprisingly, the PBC says it is ‘unable to speculate’ on the process in place at the time the fence and landscaping were constructed. It would appear from the material before me[10] that the basis for assessing improvements on the ST is the Development Control By-laws (DCB). The current DCB provided by the PBC were apparently approved on 18 July 1994, and so were in place at the time of the relevant improvements.

The DCB do not appear to specifically contemplate improvements to the ST. This may be because the DCB predominantly provide the guidelines for owner developments on their own lots, while it is the PBC who (under section 62) is expected to undertake any improvements to the ST.To the extent that the DCB processes would apply to an owner’s proposal for improvements to the ST, it seems that a proposal would be submitted to the ARC who would make a recommendation to the PBC as to whether a proposal should be approved, rejected, or approved with conditions. It is clear from the DCB that the ARC has no authority to approve improvements.

Approval of the fence and the landscaping

I have been provided no evidence that the front fence was approved by the PBC. There are indications that the ARC may have refused a potential fence design proposed by the original owner of Lot 90 and required that an originally approved fence be installed. However there is no indication that this relates to the fence on Lot 70, or what was originally approved, or that there was any actual approval by the PBC, as opposed to purported approval by the ARC. I am satisfied that the ARC had no power to approve a fence, but only to make recommendations to the PBC.

The landscaping plan is claimed to have been approved because a plan is stamped as approved and sealed by the PBC. One version of the landscaping plan dated April 2000 is stamped as approved on 15 June 2000 and bears the PBC seal. However PBC minutes on 29 August 2000 indicate the plans were actually refused. This raises queries over the potential misuse of the approval stamp and seal, and in that context the existence of the stamp and seal cannot be taken as evidence of approval. A later version of the plans, dated August 2000 plans, are stamped as approved on 18 October 2001 and also have the PBC seal. There do not appear to be any PBC minutes specifically approving them, and, given that the apparently incorrect application of the approval stamp and seal in June 2000, I am not satisfied that the seal and stamp are sufficient evidence of approval. However it does appear that in October 2001 the PBC noted that the landscaping had occurred in accordance with the easement. This implies at least implicit if not formal approval for the landscaping plan.

While there may have at least been implicit approval for landscaping of the easement, I am not satisfied that this amounts to approval for a fence. I do not consider that the landscaping plans presented clearly contemplate the installation of a front fence. The April 2000 plans certainly do not show a fence fully blocking access to the easement area because on those plans there is a driveway where the current fence exists. On the August 2000 plan there is a thickish line where the current fence is located but it is not as distinct as the line around the Energex box or the blockwall boundary fence, and there are other landscaping lines which are as thick which are not apparently fences. The plan, although generally somewhat indistinct, does suggest a garden bed and plantings which of themselves would block access regardless of whether there was a fence or not. However, on balance I do not consider that the landscaping plan, which does not of itself appear to have been specifically considered or approved by the PBC, is evidence that the PBC has approved a fence on the easement area of the ST. This appears to be supported by the comments of PBC members at the time, specifically Reid.

Importantly, even if the PBC had approved the fence (and I find no evidence that it did formally or informally approve it) I do not accept this was a valid approval. The PBC had no authority to approve the fence. The fence was contrary to the requirement in the Easement D (if in fact valid) that the PBC keep the area unobstructed at all times. More importantly, the fence was contrary to the requirement in section 56 that there be no restriction to access to the ST.

Exclusive use

Notwithstanding the legal advice given to the PBC[11], I find no evidence that there was ever any intention of the PBC to grant ‘exclusive use’ over the easement area. During the very lengthy period that this matter has been in dispute, and the numerous legal and other expert input, no documentary evidence has been provided to support this intention. In the absence of any clear evidence to the contrary, I accept the statements of four of the six voting members at the time the easement was granted that they understood that the area would remain publicly accessible.

The claim that exclusive use had been granted appears to be based on the vaguest of assumptions. The only real evidence in support of any exclusivity is the fact that the fence was, although arguably not ever approved, not required to be removed. However the suggestion that this inaction amounted to a grant of exclusive rights appears tenuous.

Even if there were a clearly expressed intention, or conduct, purporting to give Lot 90 exclusivity under the easement or through some other method, any such grant would have been beyond the power of the PBC to the extent that it purported to affect the rights of occupiers to use the ST. As outlined, section 56 provides for all Sanctuary Cove occupiers to have a right of way over the ST subject only to the thoroughfare by-laws and any by-law that purports to limit such access has effect only to the extent to which it would not unreasonably restrict access to or from any land within Sanctuary Cove or the occupier consents in writing to the restriction.

Furthermore, there is in fact no concept of or provision for the creation of ‘exclusive use’ rights under the SCRA. The BUGTA provides for exclusive use rights to be granted by the body corporate through a by-law[12], however those provisions do not apply to the PBC or the ST. Therefore it is clear that exclusive use could not have been granted or attempted to be granted pursuant to a statutory process. It appears that Trott and the PBC believe that there may have been an ‘implied’ grant of exclusive use. However, the concept of exclusive use is not a common law interest in land but a specific statutory right[13] and so it could only have been granted pursuant to a statutory provision and in accordance with a statutory process.

There is a common law right of exclusive possession in relation to an interest in land, and Trott may assert that such rights have been granted by implication or conduct. However, the concept of exclusivity would appear to be in conflict with land burdened by an easement which, by its nature, gives dual rights in respect of the land. Moreover, exclusive possession usually implies the right to exclude all other persons, including the owner or landlord, and Trott does not suggest that she has a right to exclude the PBC from the easement area.

The question of whether a lease or license incorporating rights to exclusive possession was ever granted to Trott is beyond the jurisdiction of a referee because it is a question of title to land[14]. However to the extent that there was any intent to so deal with the ST, such a dealing would arguably have no effect unless it was approved pursuant to section 63 of the SCRA and any dealing purporting to grant exclusive possession would remain contrary to section 56.

Accordingly, I find that there is no evidence to support a conclusion that exclusivity was ever granted or purported to have been granted to Lot 90 in respect of Lot 70. Even if there were such an intention, there does not appear to have been any legal basis or process for the granting of exclusivity (barring a transfer of title) that could have been validly approved under the SCRA. As such, while it would appear that the PBC have acted in good faith in reliance on legal advice in this regard, I find no substantiation for the advice.

It is certainly unfortunate if Trott was misled into believing that she had greater rights over the easement area than ever actually existed, or if she paid a premium for Lot 90 in reliance on such a belief. However, it is clear that there was nothing on the title which granted her the rights which she apparently believes she has. I have received no evidence from any party that any such belief was fostered by the PBC, although the PBC failed to require the easement to remain accessible and has sought to transfer the land to the Trott and in doing so may have raised expectations. To the extent that any inaccurate representations were made pursuant to the contract of sale between Trott and the previous owner, Trott could seek legal advice regarding her rights.

Right to transfer Secondary Thoroughfare

Two fundamental issues arise in regard to whether and under what circumstances the PBC is entitled to transfer the ST or any part of it. The first is whether the PBC must abide by section 33(1)(a), that is, controlling, managing and administering the ST for the benefit of its members, when making a decision to transfer under section 63. If it does, the second question is whether the decision to transfer in this case was for the benefit of the members of the PBC.

Approval of a transfer

Section 63 of the SCRA provides for the subdivision, transfer or lease of a part of the ST, subject to approval by the PBC (by special resolution) and approval by Council. There is no inherent right to a transfer, with consent subject to the discretion of those two bodies.

There is no indication that Council has or is likely to object to the current proposal. As such, the only issue is whether the PBC has validly given its consent. There is no specific requirement in the SCRA that the PBC must act ‘reasonably’ in undertaking its duties under the legislation or in making decisions[15]. Therefore, providing that it complies with the requirements of the SCRA and any other applicable legislation or regulations, and exercises it decision-making power lawfully, arguably a PBC decision under section 63(a) will be valid and enforceable notwithstanding that it may be seen as objectively unreasonable or unsubstantiated. There is no legislative requirement for the PBC to give reasons for or justify its decision to any interested or external parties.

Section 13(4) of the SCRA allows for a plan of survey to be registered in which land that was ST ceases to be ST. Section 13(5) requires Council to approve a survey plan under section 13(4) and section 13(5A) requires that Council shall not approve the plan “...unless it is satisfied that access to any land within the site or the adjacent site will not be restricted or if access is restricted the proprietor of that land consents to that restriction.” The easement area is not an access way to any property (except, perhaps, to Lot 90 and Trott consents to the transfer), and so access to land will not be restricted by the transfer. It does not appear that the provision refers to the loss of access to the land that would be transferred (that is, the easement area), but even if it is I am satisfied that the PBC, as the proprietor of the easement area, has consented to the transfer.

Given this, the only question is whether the exercise of the PBC’s decision-making capacity under section 63 is constrained by the requirements of section 33(1)(b).

Application of section 33 to section 63

The PBC and Trott argue section 33 is not applicable to decisions under section 63. They say it does not apply because section 63 does not mention or refer to section 33. Further, they argue that the words ‘control’, ‘manage’ and ‘administer’ refer to day-to-day caretaking functions such as regular maintenance rather than dealings such as a transfer. In addition they argue that even if section 33 did apply generally, it would not apply here because upon a proposal proceeding to transfer the ST the area would no longer be ST and so would no longer be governed by section 33. I am not satisfied that any persuasive evidence has been presented in support of these arguments.

Firstly, the plain English meaning of the words ‘control’, ‘manage’ and ‘administer’ are clearly broader that mere caretaking functions. The Concise Oxford Dictionary refers to the term ‘control’ as the ‘power of directing, command’; to ‘manage’ in terms of ‘conduct’, ‘organise’, ‘regulate’, ‘be manager of’, and ‘take control of’; and to ‘administer’ as to ‘manage affairs’ or ‘act as administrator’. These are broader concepts than the narrow interpretation proposed by the PBC and Trott. While ‘administer’ has the tenor of the purpose that the PBC and Trott assert, ‘control’ in particular invokes higher order decisions. To my mind, a requirement to control must encompass decisions about how and when to cede control (where there is a legislative power to cede control). I have not been presented with any basis to determine that this interpretation is contrary to the underlying or general purpose of the SCRA.

Secondly, there would seem to be no reason why Parliament would have included specific reference in section 33(1)(b)(i) to the requirement for the PBC to maintain and repair the common property if the intention was that section 33(1)(a) provided little more than a maintenance function.

Thirdly, I do not accept that section 33(1)(b) must specifically refer to transfers (or, for example, any other forms of land dealings such as subdivisions, leases, licences or easements) to apply to those transactions. Section 63 cannot be read in isolation[16]. Rather, it must be read in the context of the general purpose and obligations in the legislation, including section 33. This principle of statutory interpretation may mean a section is read more narrowly than if it had stood on its own[17].

Clearly section 33(1)(b) is, and is intended to be, a general provision. Therefore, it provides general obligations. Section 63 (and numerous other provisions) provides specific detail in regard to the process by which certain actions may be undertaken. I would consider it be an absurd construction of these sections to suggest that section 33 does not apply to decisions, for example, relate to the granting of a lease or an easement over an area of ST because section 33 does not include specific references to such transactions. I consider that section 33 must apply to all decisions and actions relating to the control and management of an area of the ST until that area ceases to be within the control (ownership) of the PBC. This must logically include decisions regarding whether to sell or give away ownership of the ST.

There appears to have been no previous judicial or quasi-judicial interpretation of section 33 or section 63 of the SCRA. BUGTA includes a similar provision, in that section 37(1)(a) provides that a body corporate shall “...control, manage and administer the common property for the benefit of proprietors”. In addition, section 169 of the BCCM Act provides that a body corporate may make by-laws including for “...the administration, management and control of common property and body corporate assets...”. Similar provisions occur in the other ‘specified Acts’ and similar terminology exists in the strata titles legislation in other jurisdictions.

I note that it has been considered to be “...notoriously difficult to apply decisions construing one Act to the construction of another even though ... both Acts cover generally the same topic ... and there are a number of similar provisions.”[18] Moreover, I have found little by way of directly relevant interpretation of these terms in judicial consideration of similar phrases in other legislation. Notwithstanding those limitations, there would appear to be some findings or commentary that support my interpretation of “control, manage and administer”.

For example:

­ In Coastalstyle Pty Ltd v The Proprietors, Surf Regency Building Units Plan 4246[19] the court found that the BUGTA provision requiring a body corporate to "control, manage and administer the common property for the benefit of the proprietors” gave ‘extensive powers’ and, unless the legislation expressly provided otherwise, there seemed to be no reason to exclude from their ambit a power in the body corporate to grant exclusive use or enjoyment, or special privileges, in respect of the common property for the purpose of a business engaged in on behalf of the proprietors of the units in the building.
­ In Jacklin v Proprietors of Strata Plan No 2795[20] Holland J referred to a legislative duty “not only to repair and maintain but also to control, manage and administer” indicating that control, manage and administer is beyond mere repair and maintenance.
­ The New South Wales Consumer, Trader and Tenancy Tribunal concluded that a by-law to authorise a licence agreement in respect of common property fell ‘squarely’ within the meaning of the legislative provision that the owners corporation could make by-laws “...for the purpose of the control, management, administration, use or enjoyment of the lots or the lots and common property for the strata scheme...”.[21]

In addition, the suggestion that section 33 does not apply because the area in question will, under the proposal, no longer be ST is unsustainable. As discussed above, the easement area would only cease to be ST once a new survey plan is actually recorded with the Registrar of Titles. Until that point the land is ST and subject to the control, management and administration of the PBC. Necessarily a decision about whether the land should cease to be ST is taken while the land is still ST and so must be subject to the general duties in section 33.

In light of all these considerations I am satisfied that, when making a decision to transfer the secondary thoroughfare under section 63, the PBC is obliged to make its decision ‘for the benefit of its members’. The question then is: what is for the benefit of members in this instance?

Test of ‘for the benefit of’ PBC members

Again, I am aware of no previous judicial or quasi-judicial interpretation of the meaning of ‘for the benefit of its members’ in the context of the SCRA. The fact that the PBC majority voted in favour of the proposal is a consideration but does not of itself determine that the resolution was for the benefit of its members. If that were the case, all resolutions carried by a body corporate would be deemed to be for the benefit of its members, which I do not accept. Section 33(1)(a) of the SCRA imposes an overriding safeguard on all PBC decisions regarding the control, management and administration of the ST to ensure decisions benefit members.

In the context of body corporate case law generally, there is support for the proposition that the obligation to control, manage and administer a common area for the benefit of members does not require that decisions must benefit all or even the majority of members[22].

Therefore, the general duty of the PBC to act for the benefit of members does not mean that all actions of the PBC in relation to the ST must benefit all members. There are times when actions for the benefit of the majority are appropriate even though they will inconvenience or even disadvantage other owners. On the other hand, there are situations where this duty protects the minority where a proposed action could cause an unreasonable detriment to a particular member.

For example, where all members enjoy benefits in respect of a common area, all would be entitled to act to ensure that the common area is maintained even if no other member benefits from that maintenance or has an interest in the maintenance occurring, or even could be disadvantaged in respect of the cost of the maintenance. However that principle applies in respect of a statutory duty to act. In this case the PBC has no statutory duty to transfer land in question. Therefore, I consider it is necessary to consider whether there is any benefit which members will accrue, or detriment that they will suffer, from the transfer decision.

I note the following consideration of such issues:

­ In one matter, a tribunal held that a proposed car park could not be said to be for the benefit of all proprietors if it would be “...detrimental in a substantial way to some but not all of the proprietors.”[23]
­ In Young v Owners – Strata Plan No 3529[24] it was found that a by-law limiting the use of the common property could not be made without the consent of those deprived of the use of the common property to those who owned residential lots.
­ In Lin and Anor v The Owners - Strata Plan No. 50276[25] Gzell J considered the decision in Young and said (at para 27) that:

“Implicit in that decision is the proposition that an owners corporation’s power of management and control of the use of common property does not extend to overriding the proprietary right that a lot owner has in that common property. That proposition is also implicit in the court’s conclusion that the doctrine of fraud on the minority was capable of application in relation to the contemplated expropriation of minority rights to a shared use of a relevant part of the common property.”

­ Another case[26] considered the responsibility of an owners corporation to control, manage and administer common property for the benefit of all owners, and said that

“It could well be argued that the giving away, in effect, of pieces of common property for exclusive or quasi-exclusive use by an owner or occupier could be construed as being in conflict with the requirements and obligations imposed on the owners corporation.”

­ In Jacklin and Ors v The Proprietors Strata Plan 2795[27] the Court found that the legislative duty to control, manage and administer the common property for the benefit of each owner, must be viewed in light of case law, particularly in corporate law matters, where it has been determined the majority may not neglect or destroy the interests of the minority.
­ The Supreme Court of New South Wales is cited as the authority for the proposition that:

...the exercise of a power by an owners corporation must not only be within power in the sense that it is authorised under the legislation previously referred to; it must also be a proper exercise of an existing power. That is, the power must be exercised for a proper purpose and in the interests of the proprietors as a whole. The Supreme Court confirmed that the creation of an association of persons or corporations under the Act in the form of an owners corporation may be considered analogous to a corporation formed under the Corporations Law and that, accordingly, principles such as the prohibition on company directors abusing their powers by exercising them for a collateral or otherwise improper purpose may apply, mutatis mutandis, to the decisions and conduct of an owners corporation.[28]

Having regard to these considerations I will consider each of the issues raised by the PBC as its reasons for approving the transfer to assess whether, taken together, there was sufficient basis to conclude that the decision was for the benefit of the PBC members. In doing so, a fundamental question is whether the PBC’s decision was genuinely motivated by a desire to benefit the PBC, for example by avoiding costs associated with the easement area, or whether it predominantly sought to benefit a single owner (Trott) to the potential detriment of others.

Public access to the easement area

One of the key arguments against the transfer is that it will result in the loss of access and amenity by the Sanctuary Cove community to the disputed land. While the community has not had access to the land for some eight years, this dispute arises from the ongoing calls by Plumeria to regain access. The proposed transfer would give a community asset to one owner, to the exclusion of the rights of all other occupiers in Sanctuary Cove. As such, this is an attractive argument on its face.

I do not consider that the inherent public amenity in public space such as ST is of itself reason to prevent a transfer. If that were the case, the PBC could never transfer ST. All parts of the ST have some degree of inherent public amenity and any land transfer would result in the loss of public access to that land. However, the existence of section 63 of the SCRA shows that the legislature did intend the PBC to be able to transfer ST in certain circumstances. Therefore, the loss of public amenity, including the extent that the area would actually be used, is simply one factor to be weighed up in considering what is for the benefit of PBC members.

In this case, I am not satisfied that member interests necessitate the disputed land remaining publicly accessible. While the land must, by virtue of section 56 of the SCRA, be publicly accessible while it is part of the ST, I do not consider that the overriding member interest necessitates the perpetual retention of the land as ST. It seems that the comparatively few occupiers in accessible proximity to the easement area without their own riverfront access have an alternative point of public river frontage only a short distance from the disputed land. The indications are that this alternative area has little usage. Moreover, even the Plumeria representatives agreed there would be little likely usage of the disputed area. Further, the strip of land itself would have limited public value if there was a set back and fencing from Lot 90.

Insurance liability

The PBC raises concerns regarding insurance liability for the easement area and its desire to avoid such liability is one of its arguments for the transfer. I acknowledge the theoretical argument that because the PBC does not currently have control of the area, and therefore does not have control over hazards or maintenance of the area, there is a potential for greater insurance risk. However this argument is not sustainable in practice.

Firstly, there is no indication that the area is not being appropriately maintained. More fundamentally, if the front fence was removed and public access was restored, as required by the previous Referee’s order, it would return to the control of the PBC. This is consistent with the obligations under Easement D. In that scenario there is no indication from the PBC that there would be any inherently greater insurance risk in respect of the easement area than of any other part of the ST. The PBC confirms that it has undertaken no insurance risk assessment with regard to the easement area. I am aware of no basis to conclude that the existence of a drainage easement affects insurance liabilities.

It would appear that insurance concerns first arose in regard to the poor condition of the block wall between the easement area and Lot 50. As this wall has since been replaced there is no indication that the wall creates any additional insurance liability than any of the other apparently numerous block walls on the ST throughout Sanctuary Cove.

Maintenance costs

Another argument proposed by the PBC to justify the desirability of the transfer is to avoid maintenance costs regarding the area. Again, I am not satisfied that this argument is sustainable.

The PBC currently has no maintenance expenditure over the area. While arguably such maintenance is the responsibility of the PBC, Easement D provides for Trott to reimburse the PBC for these costs. Even disregarding the easement because of its doubtful validity, there is no indication that there would be a significant maintenance cost to the PBC if the front fence was removed and public access were restored. Certainly there is no suggestion that the responsibility of the PBC to maintain other areas of the ST is any reason to dispose of those areas.

Regularisation of the easement area

A further justification for the transfer is the desire to ‘regularise’ the area, in regard to the encroachment of the building on Lot 90 onto Lot 70. I find the logic of this argument difficult.

It appears the house was recommended for approval by the ARC on the basis that the proponent resubmit drawings to ensure no encroachment (although the house may have already been constructed at that time). Although the actions and decisions after that time remain unclear, there is no evidence that the encroachment was ever agreed to or accepted by the PBC. It seems the PBC were not aware of any encroachment until the land was surveyed in 2004.

In the absence of any evidence that the PBC approved or knowingly accepted the encroachment, I find the suggestion that the PBC is responsible for rectifying the encroachment to be problematic. It would be more usual that the responsibility for correcting such irregularity (or at least the costs of rectification) would be on the person who built the encroachment, or their successor in title.

I accept that to avoid the time, cost and inconvenience of legal action under the Property Law Act 1974 it may be desirable for the PBC to reach agreement on action to rectify the encroachment. However for the purposes of any such agreement, or even if the PBC had some legal obligation to ‘regularise’ the encroachment, only a transfer covering the encroached area would be required. I do not accept that a transfer of the entire easement area is necessary to ‘regularise’ the encroachment or to deliver a benefit to PBC members.

Potential legal action

On its face, the most persuasive justification for the transfer is the risk of legal action by Trott against the PBC, and the risk of significant legal costs and damages associated with such action. However, the key question is whether this risk is more that just a mere possibility but, rather, is a risk that is sufficiently likely as to necessitate the disposal of the entire land in dispute. Although apparently having been one of the primary reasons for the transfer, I have been provided with little evidence the PBC really assessed the detail, cost or likelihood success of any threatened claim.

There appears to have been only a cursory consideration by the PBC or its legal advisors of the potential causes of action. Without apparently having sought or undertaken any proper assessment, the PBC somehow draws the conclusion that the legal action would be expensive, complex and protracted. There is no indication that advice has been sought in this regard but is being withheld on the basis of legal professional privilege to protect future legal action.

Legal advice in October 2007 briefly suggested several potential grounds for legal action. However much of the advice in this regard appeared to be based on the assumption that there would be a likely finding that exclusive use had been granted. Little reason for this conclusion was given. As outlined in detail above I do not accept that exclusive use was or could have been given, and accordingly it is arguable that the legal advice was flawed.

One of the potential actions vaguely referred to is estoppel. The onus of establishing an estoppel lies upon the party asserting it, and I note, for example, that for an estoppel arising from a verbal representation there is a requirement that the representation was clear and unambiguous, and for representations made by conduct there is a similar requirement for unequivocal acts or conduct.[29] Neither the PBC nor Trott point to any substantive basis that Trott was led to believe she had exclusive rights to the easement area, other than the PBC allowing the area to be fenced and used privately for several years. While I am unable to speculate on the decision that a court or tribunal of competent jurisdiction might make on such an issue, for the purposes of the justification for the transfer I am not satisfied that there is sufficient evidence of a likelihood of success on this basis.

Much has been made by Trott and the PBC of the potential claims by Trott under the Property Law Act 1974. However such action would not necessarily result in the transfer of the whole easement area, and may well result in an obligation on Trott to compensate the PBC for any transfer. Therefore, these potential claims do not appear to present significant financial exposure to the PBC. Trott suggests that regardless of the outcome, the PBC would be exposed to the time and cost of its own part of the litigation, and she would apply to have the PBC pay her costs. While I cannot speculate on what a court considering a an award of costs under the Property Law Act 1974, in considering the likelihood of the alleged risk it is difficult to see why the PBC would be held liable for all of its and Trott’s costs when Trott had apparently previously refused to consider a compromise (proposed by Plumeria) for a partial transfer of land which would have included the encroachment area. It may also be a consideration that the original Owner of Lot 90 was specifically requested to ensure there was no encroachment and apparently failed to do so.

Critically, there seems to have been no attempt by the PBC to assess the potential financial exposure to the PBC from the threatened legal action. I have some concern with the proposition that it is for the benefit of PBC members to transfer public land to avoid the cost of potential legal action, without any genuine consideration of the likely cost or outcome of that legal action.

There may have been some scaremongering regarding potential compensation which could have affected the votes of some PBC members. Suggestions of liability of over a $1 million would appear to have been entirely without substantiation. It is difficult to ascertain if such unsubstantiated comments did in fact affect the vote because unfortunately none of the PBC members made a submission, despite being invited to do so. Regardless, I am not satisfied that there is any evidence to assume a significant legal liability to the PBC arising from legal action.

Impact on Lot 90

Considerable comment is made regarding the impact on the dwelling on Lot 90, in terms of privacy and security, if access to the easement area was restored. However, unless a transfer is approved, such access is required under the terms of the order of Referee Toohey. Therefore, it is beyond my role to reconsider that issue except to the extent that it was a relevant consideration of the PBC in making a decision for the benefit of its members.

Based on my site inspection I accept that the restoration of public access to the easement area would impact on the privacy of Lot 90. However, on Trott’s own arguments in relation to the community interest in the land, very few people would be likely to access the area and from that perspective the impact would be very low. Although the orientation of the dwelling is somewhat different, I am not convinced that the impact would be significantly greater than the privacy impact on the house next to the area of ST accessing the river a few hundred metres up the road.

Trott may have a justifiable security concern if there was no fence between Lot 90 and a publicly accessible easement area. However the Plumeria compromise proposal contemplated a fence.
Trott appears to object to the concept of a fence, ostensibly because it would hinder access to drainage for maintenance. I do not accept this argument. Firstly, a fence of the style which is common in the scheme (including the front fence of the easement area and the fence adjacent to the area of ST providing river access up the road) is of a type of construction that would appear to be relatively easily removable if necessary. Secondly, the front fence would already have to be removed to enable access to maintain the drainage and Trott does not appear to object to that fence on those grounds. I note that Referee Toohey similarly found little weight in this argument.

In regard to the PBC’s obligations and concerns, it was presumably the choice of the original Owner of Lot 90 to construct a dwelling on (and in fact over) the boundary of the ST with its right of access under section 56 of the SCRA. Therefore, if the original owner chose to design a house oriented to face a public thoroughfare, I fail to see why there should be some inherent expectation that the PBC should protect the privacy of the dwelling on Lot 90.

Similarly, I have been provided with no evidence of information provided to Trott at or after the time of purchase that could have led her to a reasonable belief that she owned or had exclusive use of the easement area. There was nothing on the title search that gave her any rights over the land other than with respect to drainage. While a fence and established landscaping existed, and was allowed to remain by the PBC, the PBC (as the owner of the land and the improvements on it) could have removed these at any time. I have not received evidence of anything communicated to Trott by the PBC that would have led her to believe to the contrary. Therefore, having chosen to purchase a house oriented to face a public thoroughfare, I fail to see why there should be some inherent expectation that the PBC should protect Trott’s privacy.

As noted above, it can potentially be acting in the interest of members for the PBC to act in the interest of one member. However, this would arguably involve a situation where, for example, the PBC could legitimately act to maintain an area that only benefits one owner even though it is at the expense of all. In this case the interest of the one owner’s privacy must be weighed against the loss of public land for no return to the Sanctuary Cove community. In the current circumstances I do not consider this is justifiable.

Consideration or payment for transfer

The PBC argues that it is not permitted to receive payment in exchange for the transfer, although it does consider itself able to be reimbursed for its costs. The PBC’s limited arguments in this regard suggests there is no legislative provision to receive consideration for a transfer, that the PBC can only receive funds through member levies in accordance with annual budgets, and that there is no mechanism to trade, make a profit, or deal with the proceeds of any trade or profit-making activity.

I have been provided with no real argument to determine that the absence of any specific provisions allowing or prohibiting consideration for a transfer of the ST should be interpreted as meaning that the PBC is prohibited from receiving consideration for a transfer. Section 23(6) of the SCRA provides that the PBC shall do “all things reasonably necessary” for the control, management and administration of the ST. It is arguable that this is a general authority which, unless there is a contrary specific provision, empowers the SCRA to receive a payment for the transfer of the ST if it is reasonably necessary to seek payment in consideration for agreeing to a transfer to ensure that the transfer benefits PBC members.

Section 14 of the SCRA provides for any lot shown on the plan as ST to be transferred to the PBC immediately upon registration of a subdivision or resubdivision of a lot or secondary lot. However, section 14(1AA) and (1C) specifically provide that the PBC shall not be required to make payment or provide consideration for a transfer under this section. It is arguable that, having specifically considered payments for transfers of the ST in this section, if it was the intention of Parliament to prevent payments for any subsequent transfers of the ST away from the PBC, specific provision would have been made. Section 63 of the SCRA provides for transfers and other land dealings, subject to specified conditions. It would be logical to assume that if an entity was transferring or leasing land it would do so for consideration unless there was a specific prohibition. Therefore, if the legislature intended to prevent the PBC from selling the ST rather than just ‘gifting’ it, it would surely have been specified in section 63 a prohibition on consideration as included in section 14.

I am also not satisfied that there is anything in the SCRA provisions relating to the financial management which would prevent it receiving monies other than from levies. Monies, including relating to land transactions, could be legitimately received from sources other than levies without involving the PBC in trade or profit-making activities. If, for example, land within the scheme was compulsorily resumed, it would be absurd to suggest that the PBC could not receive compensation for the land. Similarly if a portion of land was transferred pursuant to a claim under Property Law Act 1974, and the PBC was awarded compensation as a result, there is no suggestion that the PBC would not be entitled to receive that money. Likewise, there would seem to be no reason why the PBC could not receive monies for any other type of legal action, insurance claim and so on.

The suggestion that PBC can only receive monies pursuant to levied contributions is not supported in the legislation. Furthermore, if that were the case then arguably the PBC would not be able to receive the costs it indicates that it intended to claim from Trott for the transfer. However, I do not see that there would be any difficulty in the PBC receiving either a reimbursement of costs or consideration, paying it into the PBC accounts and, as appropriate, reducing levies accordingly.

Claim for costs

The PBC seeks a determination that the application is vexatious in nature and should be dismissed with legal costs awarded to the PBC. It refers to section 110 of BUGTA in this regard. Section 110 only provides for the prescribed deposits, which must normally be refunded to an applicant, being directed otherwise if the referee, tribunal or court finds an application to be vexatious or frivolous in nature. Prescribed deposits are referred to in section 72 of BUGTA and are distinct from the prescribed application fee. No prescribed deposit was sought or made in relation to this application and so section 110 is not applicable. Moreover, section 75(7) of BUGTA specifies that a referee may not make an award of costs. Further, even if there were a capacity to make a determination that this application were frivolous or vexatious, or to award costs against the applicant, given the outcome of the application such orders are clearly not relevant in this matter.

Conclusion

As outlined in the discussion above, I make the following observations and findings:

­ It would seem from the evidence that Easement D was not validly authorised.
­ On balance I am satisfied that the front fence constructed by a previous Owner of Lot 90 on Easement D was not validly authorised, and that any purported authorisation of the fence would have been invalid as contrary to the requirements of section 56 of the SCRA.
­ There is no evidence of an intention by the PBC to grant exclusive use rights over the easement area, or any evidence that any steps were ever taken that validly formalised any exclusive use rights. Further, any purported grant of exclusive use (which in any event is not a right provided for in the SCRA) would be contrary to section 56 of the SCRA.
­ In considering whether to approve a transfer of the ST under section 63 of the SCRA, the PBC is bound by the terms of section 33 of the SCRA and so is required to make a decision that is for the benefit of its members.
­ I consider that it would not be for the benefit of members for the ST to be transferred without a financial return, unless there was a good reason for that.
­ There is nothing in the SCRA that prevents the PBC selling the ST at market value or otherwise for a financial return, provided that its decision is for the benefit of owners.

On balance, and having regard to all the arguments presented, I am not satisfied that the PBC’s resolution on 29 September 2008 was a decision made for the benefit of members, as required under section 33 of the SCRA. The PBC has not persuaded me that actual and potential liabilities in respect of the easement area were of themselves sufficient basis to dispose of the community owned land for no financial return. I do not consider that, having regard to all the issues, it benefits the PBC members for community land to simply be given away. Accordingly I have made an order invalidating the resolution of 29 September 2008.

Although I have made an order overturning the decision to transfer in this instance, this does not mean that there are no circumstances in which the PBC could justifiably agree to transfer the easement area to Trott, or any other person. I am not satisfied that the inherent public amenity in the disputed land is of itself reason to prevent a transfer. My principle concern is that it was not for the benefit of members for the land to be essentially gifted to one owner. However, were the land to be sold, and the PBC and its members to receive a financial return, then I am of the view that the balance of the factors could shift in favour of the transfer benefiting members. Further, I am satisfied there are no legal impediments to the PBC receiving a financial return for the land.

I would suggest that, if Trott were interested in purchasing the land, the parties could negotiate an appropriate sale price having regard to what is objectively reasonable in all the circumstances. I do not consider that it is appropriate for me to set a potential price or even to determine the process by which such a sale price should be determined. It is not necessarily the case that the price would need to be an objective market value of the land, as there are a range of factors to consider. For example, the potential value of the land on the ‘open market’ would arguably much lower that it its inherent value to Trott, because of its limited utility to any other owner except perhaps the Owner of Lot 50. However I am of the view that there would at least require some appreciable return to the PBC. If a sale price can be agreed, the proposed transfer could then be returned for a further special resolution. Although the PBC has no legal obligation to specifically consult Plumeria in this regarding any sale price, it would do well to consult with Plumeria to avoid any further challenge to any new resolution. Similarly I would encourage Plumeria to be conciliatory and to not unduly hinder the final resolution of this long standing dispute.

Referee Toohey’s order on 24 June 2008 required public access to the easement area to be restored within six months, or such other time as agreed by the parties. The original timeframe expired in December 2008. I understand that the PBC and Plumeria reached agreement, as permitted by the order, to extend this period presumably pending an outcome on this application. If a sale were to be pursued by the PBC it would arguably appropriate for this arrangement to be extended for a reasonable period to enable proper negotiations and the conduct of a PBC meeting to further consider a transfer. However, if the PBC or Trott do not wish to pursue a sale, or if a sale is not pursued within a reasonable period, the PBC must act promptly to comply with Referee Toohey’s and to restore public access to the disputed area.

It is unfortunate that the PBC and Trott did not, it would seem, make any genuine efforts to reach a compromise as envisaged by Referee Toohey. It is similarly unfortunate that the long running dispute is not finalised by this order. However I would encourage all parties to cooperate in bringing this matter to a speedy conclusion.

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[1] In the previous application (reference 0034-2008) Referee R Meek in Sanctuary Cove Principal Body Corporate [2008] QBCCMCmr 29 (30 January 2008) and Referee D Toohey in Sanctuary Cove Principal Body Corporate [2008] QBCCMCmr 352 (24 June 2008) accepted that jurisdiction existed.

[2] D Toohey in Sanctuary Cove Principal Body Corporate [2008] QBCCMCmr 352 (24 June 2008)

[3] I note that Plumeria comment in their submission that if the front fence were removed they would ask Energex to move the old substation which would open up access, but it is unclear if this is possible.
[4] The certificate is not dated and does not indicate the date on which the special resolution was passed,
[5] Section 64 relates to the dedication of secondary thoroughfare as a road and so is not applicable here.
[6] Correspondence from Robert Gallagher, Nicol Robinson Hallets to Susan Minnekeer on 12 October 1997.
[7] Trott Submission to Application 0034-2008, 3 April 2008, p.8-9.

[8] Trott’s submission cites Ashton & Ors v Hunt [1998] QCA 308 and Stuy v BC Ronald Pty Ltd [1984] as authorities for this proposition.
[9] Trott Submission to Application 0034-2008, 3 April 2008, p.9.

[10] Including that the SCRA and ST By-laws do not provide approval processes for improvements on the ST, and the Residential Zone Activities By-laws do not (pursuant to section 96A of the SCRA), apply to the ST.
[11] Correspondence from Robert Gallagher, Nicol Robinson Hallets to Susan Minnekeer on 12 October 1997.
[12] See section 30(7)-(9) of BUGTA
[13] Atkinson J in Independent Finance Group Pty Ltd v Mytan Pty Ltd & Anor [2001] QCA 306 at para 86
[14] Section 118 of BUGTA
[15] As for example, is required of bodies corporate under section 94(2) of the BCCM Act.
[16] Eg. Mason J in K&S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd [1985] HCA 48; (1985) 60 ALR 509 at 514

[17] Eg. Ross v R [1979] HCA 29; (1979) 25 ALR 137 at 145 cited in Pearce DC & Geddes RS (2001) Statutory Interpretation in Australia (5th Ed) Butterworths, Australia at 4.2.

[18] Davies JA in McColl & Anor v Body Corporate for Lakeview Park CTS 20751 [2004] QCA 44 at para 22
[19] [1992] QCA 346 at p.12
[20] [1975] 1 NSWLR 15 (at 24) cited in The Owners of Strata Plan No 3397 v Tate [2007] NSWCA 207

[21] Coles v Owners Corporation SP 57164 (Strata & Community Schemes Division) [2005] NSWCTTT 723

[22] For example, HE Moore in Rossetto v Owners Corporation SP 71067 (Strata & Community Schemes) [2008] NSWCTTT 859; Jacklin v The Proprietors SP 2795 [1975] 1 NSWLR 15; The Owners SP 3397 v Tate [2007] NSWCA 207; Lin & Anor v The Owners SP 50276 [2004] NSWSC 88.

[23] Banning v The Owners of 106 Terrace Road Perth - Strata Plan 6289 [2006] WASAT 296

[24] [2001] NSWSC 1135 cited in Lin & Anor v The Owners SP 50276 [2004] NSWSC 88 at Para 26

[25] [2004] NSWSC 88

[26] Shalita, William Owner of Lot 2 SP No.44281 v Poole, Michael Owner of Lot 7 [1999] NSWSSB 16

[27] (1975) I NSWLR 15, cited in Vebada Pty Ltd v The Owners Strata Plan 34754 [2001] NSWRT 196

[28] Immer (No 155) Pty Ltd v Houghton and Ors (1996) NSWSC 427 cited in Pro-Tek Pty Ltd, trading as Panozzo Property Unit Trust v The Owners SP54408 [1999] NSWSSB 38
[29] Owners - Strata Plan No 51487 v Broadsand Pty Ltd [2002] NSWSC 770 at para 35.