Appellant v First Respondent

(a) A review of the development of strata title legislation indicates the principal role of the body corporate or owners corporation was to manage and administer the common property of a strata subdivision.

(b) The relevant legislation does not disclose any intention for owners corporations to have power to substantially interfere with lot owners' proprietary rights; or for owners corporations to effectively have an unappellable right to overrule uses permitted under planning legislation.

(c) A parliamentary intention to provide to owners corporations powers that could substantially inhibit the conduct of lot owners on their own lot would need to be expressed in clear and unambiguous language.

I have further found that the relevant rule, in this case, was not deemed to be valid by s 27(2C) of the Subdivision Act 1988 (Vic) (see paragraphs [128] to [132] below), or the transitional provisions of the Owners Corporations Act 2006 (Vic) (see paragraphs [136] to [144] below).

2 Owners Corporation PS 501391P ('the appellant') appeals, pursuant to s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic), against orders made by Member L Rowland on 22 September 2015 dismissing the appellant's claims for an injunction restraining the respondents from letting their residential apartments for a term of less than 30 days.

3 The appeal raises an important question of whether, in Victoria, an owners corporation has power to pass rules to prohibit lot owners from letting their residential lots on a short-term basis ('Short-Term Letting'). The importance of the question arises from the dramatic shift in urban areas towards high density residential living arrangements that are subject to owners corporations. This shift is demonstrated by the fact that, in 1988, there were approximately 35,000 owners corporations (then known as 'bodies corporate')[1] related to developments in which 200,000 people lived and worked.[2] By 2014, there were approximately 88,500 owners corporations related to developments in which about 1.5 million people lived and worked[3] - an increase in the number of people affected by owners corporations in their daily lives of some 750%.

4 The appellant is the owners corporation for the Watergate Apartments, 18 Waterview Walk, Docklands.

5 The respondents in proceeding S CI 2015 05445, Mr Deshnee Moodley-Schroter and Mrs Keshri Moodley, are the owners of Unit N1401. The respondents in proceeding S CI 2015 05446, Mr Paul Salter and Ms Belinda Balcombe, are the owners of Unit S909 and operate a Short-Term Letting business trading under the name 'Docklands Executive Apartments'. Mr Salter and Ms Balcombe utilise 14 apartments within the Watergate Apartments in their business as follows:

(a) One apartment, being Unit S909, is owned by Mr Salter and Ms Balcombe.

(b) Nine apartments are leased for the purposes of Docklands Executive Apartments.

(c) Four apartments are available to be leased by Docklands Executive Apartments on behalf of the owner on a commission basis.

6 The Watergate Apartments consist of 349 residential lots in two 16 storey apartment towers joined by, and erected above, a four storey podium, which contains 12 retail lots and car park facilities.

7 The plan of subdivision for the Watergate Apartments, No PS 501391P, was registered on 28 June 2004. In late 2004, occupancy permits were issued, staged over a period of time, that classified the apartments as residential Class 2 under the Building Code of Australia.

8 In 2011, the City of Melbourne served building orders on the owners of 42 units who were using or permitting their units to be used for Short-Term Letting. The orders required the owners to cease to use the apartments as 'short term commercial accommodation (hotel) or the like', which it was alleged rendered such apartments a Class 3 building under the Building Code of Australia. Thirty-one of the 42 affected unit owners challenged the orders in the Building Appeals Board.

9 On 22 March 2013, the Building Appeals Board upheld the orders of the City of Melbourne's Municipal Building Surveyor on the basis that 'the use of the apartments for commercial short time stays is not a use which is permitted under the existing occupancy permit for Class 2 (which involved the operation of a business)'.

10 The respondent owners appealed to the Supreme Court and, on 30 May 2013, Beach J set aside the Building Appeal Board's decision and remitted the matter back to the Building Appeals Board for determination.[4]

11 On 12 December 2013, the Court of Appeal dismissed the appeal of the City of Melbourne from the decision of Beach J and held that that the Building Appeals Board had misdirected itself in concluding that 'ordinarily a dwelling is not a building used for short term accommodation'.[5] Accordingly, the matter was remitted for reconsideration to the Building Appeals Board where ultimately the matter was settled and orders were made by consent on 30 October 2014 in the following terms:

With the consent of the parties, and without the Board determining the merits, it is ordered pursuant to section 149(1)(c) of the Building Act 1993 (Vic) (''the Act") that:

1. The building orders dated 19 October 2013, to which these proceedings relate, are varied by way of replacing paragraphs 6 and 7, with a new paragraph 6 as follows:

You must carry out the following within 30 days of the date of this order (being the date of the varied order):

1. install a smoke alarm that complies with AS3786 inside each bedroom of the apartment and interconnected in accordance with AS3786 with each smoke alarm within the apartment;
2. affix an emergency evacuation plan to the rear of the entry door of the apartment to the nearest fire isolated exit stair in accordance with AS3745; and

1. provide the municipal building surveyor, Melbourne City Council, with a certificate under section 238 of the Act confirming compliance with this order and the building regulations.

2. Pursuant to section 149(4) of the Act, the Board orders that:

The municipal building surveyor, Melbourne City Council, review the compliance of the "Exit" signs in the common corridors that provide access and egress to the apartments that are the subject of these proceedings, having regard to the report of Mr Adrian Lee titled "City of Melbourne Watergate Apartments Further Report, Issue 1 dated 17 September 2014", with a view to issuing a building notice on the relevant Owners Corporation without delay, should the exit signs be found to be non compliant with the BCA Part E4.8(b).

1. The municipal building surveyor, Melbourne City Council, review whether a written record of the tenants acknowledging the receipt of safety/evacuation induction should be kept on the premises and whether it should be noted as an essential safety measures item referenced in the maintenance determination appurtenant to the occupancy permit. Should the municipal building surveyor determine that such a requirement is appropriate he should take appropriate measures to seek to have it implemented.

The adoption of Additional Rules including Rule 34

12 Pursuant to s 28 of the Subdivision Act 1988 (Vic), the appellant was incorporated as a body corporate on registration of the plan of subdivision on 28 June 2004. On incorporation, pursuant to reg 219 of the Subdivision (Body Corporate) Regulations 2001 (Vic), the 'Standard Rules' set out in Form 1 of the Subdivision Act 1988 (Vic) applied to the appellant.

13 At the inaugural general meeting of the appellant on 10 August 2004, the appellant adopted 'Additional Rules' by special resolution pursuant to reg 220(1) of the Subdivision (Body Corporate) Regulations 2001 (Vic). The Additional Rules were recorded with the Registrar of Titles on 21 September 2004 and included the following rule ('Rule 34'):

34 RESTRICTIONS - CONDUCTING TRADE

34.1 The Proprietor or Occupier of a residential Lot must not use a Lot or the Common Property for any trade, profession or business (other than letting the Lot for residential accommodation to the same party for periods in excess of one month), nor permit any other person to do so, unless:

(a) The person conducting the trade, profession or business is a full time resident of the Lot and only operates a home office with a maximum one (1) employee; and

(b) The relevant planning scheme does not prohibit the relevant trade, profession or business to be carried on in a Lot; and

(c) The Lot owner has obtained all necessary permits from the relevant authorities to enable the relevant trade, profession or business to be carried on in a Lot.

34.2 Except for commercial/retail Lots, the Proprietor or Occupier of a residential Lot must not use that Lot or any part of the Common Property for any trade or business nor permit others to do so.

The proceedings before the Victorian Civil and Administrative Tribunal ('VCAT')

14 On 25 August 2014, the appellant filed an application in VCAT against Mr Salter and Ms Balcombe seeking orders requiring them to cease using their unit in breach of Additional Rules 34.1 and 34.2.

15 Between 25 August 2014 and 1 September 2014, the appellant filed a further eight applications in VCAT against other owners of units, including Mr Moodley-Schroter and Mrs Moodley, claiming similar relief.

16 On 13 and 14 April 2015 and 20 May 2015, the nine VCAT proceedings were to be heard concurrently. At the outset of the hearing, however, it was agreed by consent that VCAT would hear the evidence and legal submissions and determine the two proceedings that are the subject of these appeals; and would stand the other seven VCAT proceedings over for further orders, following the decision in these matters.

17 The VCAT Member summarised the evidence of Mr Delves, the building manager, about the complaints relating to Short-Term Letting as follows:

• Arriving guests, if not met immediately upon arrival by Mr Salter, breach security by following residents into the building and then loiter in the building foyer until such time as Mr Salter can meet them;
• Unmet guests impose upon the building manager and occupiers by asking for directions;

• Unmet guests leave their luggage in the building foyer;

• Guests and Mr Salter regularly jam the lift doors open with luggage;

• Short-term guests do not respect Owners Corporation rules;

• Short-term guests are not properly inducted into the safety procedures of the building;
• The operation of the Docklands Executive Apartments causes increased wear and tear on the common areas, with luggage and cleaning equipment being transported to and from the lots;
• There is apprehension that, in the hands of an inappropriate operator, short-term letting will be detrimental to the majority of lot owners and occupiers in the building.[6]

18 The VCAT Reasons recorded that Mr Salter gave evidence that, in eight and a half years of operation, he has had over 3,500 bookings and 10,500 guests. Although he agreed that there have been a small number of incidents involving his short-term tenants, he disputed that his short-term tenants were any more disruptive than the longer-term tenants and lot owners. Mr Salter's evidence was that he had adopted the following steps to minimise the risk of letting to inappropriate tenants:

(b) He has a policy of a minimum seven days' stay.

(c) He requires photo identification and credit card details of every guest.

(d) He has zero tolerance for poor behavior and can immediately evict disruptive tenants.[7]

19 The VCAT Member concluded that both sides presented a 'solid case' but she was 'not called upon to decide upon the merits of short-term letting'.[8]

20 After the filing of written submissions, VCAT heard the parties' oral submissions on 20 May 2015.

21 On 29 June 2015, VCAT handed down its reasons with respect to the claim against Mr Salter and Ms Balcombe.

22 For the purposes of determining the validity of Rule 34, the VCAT Member considered:

(a) the statements of Dixon J in Williams v City of Melbourne;[9]

(b) the decision of Hayne J in Attorney-General (SA) v Corporation of the City of Adelaide[10] applying Dixon J's reasoning in Williams v City of Melbourne; and

(c) the judgment of Brennan and Toohey JJ in Humphries v Proprietors 'Surfers Palm North' Group Titles Plan 1955.[11]

The VCAT Member concluded that, for the rule to be valid, it must have a connection to a functional power given under the relevant Act or regulations and its legal and practical effect must have a sufficient connection to that rule-making power.[12]

23 The VCAT Member concluded that the owners corporation did not have the power to adopt Rule 34 for the following reasons:

(a) The legal and practical effect of the rule was to regulate any trade, profession or business in the residential lots and ban Short-Term Letting altogether.

(b) Although there was no specific function or power conferred on a body corporate (now owners corporation) to regulate the use of a private lot, bodies corporate under the Subdivision Act 1988 (Vic) could make rules with respect to matters set out in the Standard Rules, which included rules preventing nuisance, hazard or noise.

(c) Rule 34 was a rule 'with respect to the permitted use of a lot, not a rule with respect to preventing nuisance, hazard or noise.' Accordingly the VCAT Member was 'not persuaded that Rule 34 is sufficiently connected to the Standard Rules to enable it to have been made by the body corporate'.[13]

(d) If there was (contrary to her finding) a sufficient connection with the nuisance power to make a rule prohibiting Short-Term Letting, Rule 34 was invalid because it did not seek to regulate the use of a lot to prevent a nuisance; but rather prohibited certain types of uses altogether.[14]

24 The VCAT Member then considered whether, even if Rule 34 had not been validly made under the Subdivision Act 1988 (Vic) and its regulations, it was nonetheless valid because the transitional provisions of the Owners Corporations Act 2006 (Vic) deemed Rule 34 to have been made under the 2006 Act.[15] The VCAT Member found that Rule 34 would not be a valid rule under the 2006 Act for the following reasons:

(a) The VCAT Member rejected the argument, that Rule 34 would be a valid exercise of the power to make rules with respect to the change of use of lots, on the basis that in the context of the relevant schedule and the model rules the change of use power only enabled an owners corporation to make rules in the event of a change of use of the lot and did not confer power to make rules determining the use of the lot.[16]

(b) The appellant argued that Rule 34 was within the power to make rules to protect occupants' health, safety and security. The VCAT Member rejected this argument on the basis that the plain reading of the power did not extend to prohibiting a legal use of a lot nor was the connection to health, safety and security established on the evidence.

(c) The appellant argued that Rule 34 was within the power to make rules with respect to the use of common property and the behaviour of persons. The VCAT Member rejected this argument on the basis that, even if it was accepted that short-term tenants caused more damage to common property and created more of a nuisance than long-term tenants (of which she said there was little evidence), she did not consider that the power to regulate use of the lots for Short-Term Letting extended to prohibition.[17]

25 The relevance of authorities in other states of Australia, to which this Court was referred by the parties on appeal, is substantially dependent on the similarity of strata title legislation in each relevant state. Accordingly, it is necessary to compare the development of the strata title legislation particularly in Victoria and New South Wales.

26 Although the common law recognised that freehold ownership of land could be divided both vertically and horizontally,[18] it was not until after the Second World War that the sale of parts of buildings, now known variously as flats, units or apartments, became common. The dynamic growth of cities in the wake of the post-war 'baby boom' was but one of the many reasons for this development, which do not require further consideration in these reasons.[19]

27 Prior to 1954, 'a variety of schemes existed calculated to secure to flat-dwellers the nearest practical equivalent to ownership'. Vertical and horizontal developments would be effected by utilising long-term leaseholds, tenancies in common or home unit companies.[20] The most common was home unit companies, in which a right to occupy particular parts of a building was associated with specified shares in the home unit company.[21]

Transfer of Land Act 1954 (Vic)

28 The growing interest in unit ownership in Victoria was one of the reasons for the introduction of the Transfer of Land Act 1954 (Vic), the long title of which was 'An Act to amend and consolidate the Law relating to the Simplification of the Title to and the Dealing with Estates and Interests in Land, and for other purposes'. Section 98 of that Act provided that the subdivision of a building implied a grant of all appurtenant easements. This provision prompted the development in Victoria of the 'stratum' estate. The key features of the stratum estate were as follows:

(a) Each purchaser received a Certificate of Title to the purchased unit.

(b) The developer incorporated a service company which owned all of the common land, such as driveways and gardens.

(c) Each purchaser of a unit entered into a service agreement with the service company and held shares in proportion to his or her unit holding.

Transfer of Land (Stratum Estates) Act 1960 (Vic)

29 The popularity of the stratum estate arrangement/structure resulted in the Victorian Parliament passing the Transfer of Land (Stratum Estates) Act 1960 (Vic). The long title of which was 'an Act relating to Freehold Estates in Parts of Subdivided Buildings, and for other purposes' and which further facilitated stratum developments by s 3 of that Act which inserted ss 98A, 98B and 98C into the Transfer of Land Act 1958 (Vic).

Conveyancing (Strata Titles) Act 1961 (NSW)

30 In 1961, the New South Wales Parliament introduced the first system of strata (not stratum) titles by the Conveyancing (Strata Titles) Act 1961 (NSW).[22]

Strata Titles Act 1967 (Vic)

31 In the early 1960s, difficulties with stratum titles in Victoria resulted in consideration of reforms by the Council of the Law Institute of Victoria.[23] In 1965, Mr Louis Voumard QC was appointed by the Attorney-General as chairman of a committee to consider the law governing strata titles in Victoria. The committee made its report in the form of a draft bill in 1966, which ultimately resulted in the Victorian Parliament passing the Strata Titles Act 1967 (Vic).

32 On the Second Reading of the Strata Titles Bill, Mr Vernon Wilcox, the then Minister for Labour and Industry, referred to the report of the committee chaired by Mr Voumard QC and the 'tremendous popularity of own-your-own home units in Victoria'.[24] He noted that 'the Transfer of Land Act 1958 (Vic) was amended in 1960 to alleviate the conveyancing problems [with stratum titles], but experience has shown that more drastic revision is necessary'. The Minister spoke of the need for insurance and maintenance of buildings including lifts and stairways and also mentioned conduct issues:

It is also necessary, when people are living close to each other, to provide some means of ensuring that they have reasonable regard for the interests of the other people. The existing systems do not provide a completely satisfactory method of providing for internal administration.[25]

Rules regulating the behaviour affecting the interests of other people are usually referred to as 'conduct' or 'behaviour' rules.[26] In these reasons, I shall refer to such rules or by-laws as 'conduct rules'.

33 As with stratum title, purchasers of each unit on a strata plan of subdivision were registered as proprietors of their respective units. However, the principal differences were that:

(a) s 13 of the Strata Titles Act 1967 (Vic) provided that the registered proprietors for the time being of the units would be 'registered proprietors of the common property as tenants in common in equal shares proportional to the unit entitlement from time to time of their respective units'; and

(b) s 14 of the same Act provided that the 'registered proprietors for the time being of the units on a registered plan shall by virtue of this Act be a body corporate under the name "Body Corporate - Strata Plan No." (the number shall be the number of the relevant registered plan)'.

Accordingly, the Strata Titles Act 1967 (Vic) overcame the necessity of incorporating a service company to manage and administer the common property; and removed the need for compliance with the company legislation.[27]

34 Section 15(1) of the Strata Titles Act 1967 (Vic) provided that the duties of the body corporate included the following:

(a) 'Subject to this Act, to carry out any duties imposed on it by the by-laws';[28]

(b) 'Insure the buildings and other improvements against fire and other risks and otherwise as required by law';[29]

(c) 'To keep in a state of good and serviceable repair and properly maintain the common property';[30]

(d) 'To comply with local authority requirements for repairs or work in respect of land comprised in the strata subdivision or any improvements therein';[31]

(e) 'To disclose on request the details of the members of the committee';[32] and

(f) 'Subject to this Act to control, manage and administer the common property and to do all things reasonably necessary for the enforcement of the by-laws'.[33]

35 Section 16 of the Strata Titles Act 1967 (Vic) provided that the powers of the body corporate included the powers conferred by the by-laws, the power to remedy any breach of a by-law and financial powers. The financial powers included the maintenance of a fund:

(a) for administrative expenses sufficient for the control, management and administration of the common property and for the payment of any premiums of insurance; and

(b) for the discharge of performance of any other obligation of the body corporate.

36 With respect to by-laws of the body corporate, ss 24(1)-(5) provided as follows:

(1) Except as otherwise provided by this Act the body corporate and the control management administration use and enjoyment of the units and the common property on a registered plan shall be regulated by the by-laws.

(2) Subject to any amendment or repeal thereof or addition thereto the by-laws shall be those set forth in the First and Second Schedules.

(3) The by-laws in the First Schedule and any additions thereto or amendments thereof may be added to amended or repealed by unanimous resolution and not otherwise.

(4) The by-laws in the Second Schedule and any additions thereto or amendments thereof may be added to amended or repealed by the body corporate.

(5) Any amendment of or addition to any by-law shall relate to the control management administration use or enjoyment of the units or the common property or to the regulation of the body corporate or to the powers and duties of the body corporate (other than those conferred or imposed by this Act): Provided that no powers or duties may be conferred or imposed on the body corporate which are not incidental to the performance of the statutory duties or powers imposed on it by this Act or which would enable the body corporate to acquire or hold any real estate or any chattel real or to carry on business for profit.

37 The abovementioned provisions closely followed the Conveyancing (Strata Titles) Act 1961 (NSW) and, with respect to the by-laws, adopted the following scheme:

(a) The initial by-laws of the body corporate would be in accordance with the First and Second Schedules to the Act.[34]

(b) Amendments, additions or repeal ('Alterations') of the First Schedule would only be by unanimous resolution.[35]

(c) Amendments, additions or repeal of the Second Schedule would be only by resolution of the body corporate passed by not less than three quarters of the value of the votes and not less than three quarters of the number of the votes exercisable in respect of all of the units.[36]

(d) Any amendments, additions or repeal to a by-law was required to relate to 'the control management administration use or enjoyment of the units or the common property or of the regulation of the body corporate or the powers and duties of the body corporate (other than those conferred or imposed by the Act)'. Further, any powers or duties of the body corporate were required to be incidental to the performance of the statutory duties or powers imposed on the body corporate by the Act.[37]

38 The First Schedule included 33 clauses dealing with obligations on the unit holder to pay rates with respect to their unit, to maintain their unit in good repair, to 'notify the body corporate forthwith of any change of ownership or of occupancy of his unit'; and not to use the common property to unreasonably interfere with the use and enjoyment of other unit holders or occupiers nor use their unit in a manner that would cause a nuisance or hazard to other unit holders.[38]

39 With respect to the body corporate, the First Schedule made provision for procedural matters and the following duties and powers:

4. The body corporate shall -

(a) keep in a state of good and serviceable repair and properly maintain all chattels fixtures and fittings (including elevators and fire escapes) used or intended, adapted or designed for use in connexion with the common property or the enjoyment thereof;

(b) maintain in good repair and proper working order (including renewal where reasonably necessary) pipes, wires, cables, ducts and all other apparatus and equipment of whatsoever nature used or intended, adapted or designed for use for the provision of services in respect of which an easement may exist under the provisions of section 12 of this Act; and

(c) on the written request of a member, or registered mortgagee of a unit produce to such member or mortgagee, or person authorized in writing by such member or mortgagee, the policy or policies of insurance effected by the body corporate, and the receipt or receipts for the last premium or premiums in respect thereof.

5. The body corporate may -

(a) purchase, hire or otherwise acquire personal property (other than chattels real) for use in connexion with the enjoyment of common property;

(b) borrow monies proper to be borrowed by it for the purpose of performing its duties or exercising its powers;

(c) secure the repayment of monies borrowed by it, and the payment of interest thereon, by negotiable instrument, or mortgage of unpaid contributions (whether levied or not), or mortgage of any property vested in it, or by combination of those means;

(d) invest as it may determine any monies in any fund established pursuant to section 16 of this Act;

(e) make an agreement with any member or any occupier of a unit for the provision of amenities or services by it to such unit or to the member or the occupier;

(f) grant to a member or anyone claiming through him any special privilege (not being a lease) in respect of the enjoyment of part or parts of the common property provided that any such grant shall be determinable by special resolution.

40 The above provisions, in substance, reproduced duties and powers in the First Schedule to the Conveyancing (Strata Titles) Act 1961 (NSW),[39] although they excluded the duties imposed on the body corporate by that Act to 'control, manage and administer the common property for the benefit of all proprietors'[40] and 'where practicable establish and maintain suitable lawns and gardens on the common property'.[41]

41 The Second Schedule included certain prohibitions on the unit owner with respect to the use of the unit. It provided as follows:

1. A member or occupier shall not -

(a) use or permit his unit to be used for any purpose which may be illegal or injurious to the reputation of the building;

(b) make undue noise in or about any unit or common property;

(c) keep any animal on his unit or the common property after notice in that behalf from the committee.

42 Except for the fact that the prohibition extended to an occupier, its terms were, in substance, identical to Second Schedule of the Conveyancing (Strata Titles) Act 1961 (NSW). However, the Second Schedule in the Victorian Act omitted paragraph 2 of the Second Schedule to the Conveyancing (Strata Titles) Act 1961 (NSW) which provided the ability to control the use of a lot to the use specified on the plan. Paragraph 2 read as follows:

When the purpose for which a lot is intended to be used is shown expressly or by necessary implication on or by the registered strata plan, a proprietor shall not use his lot for any other purpose, or permit the same so to be used.

43 The apparently deliberate omission of the by-law prohibiting the use of a lot (otherwise than as specified in the plan) is consistent with a Parliamentary intention that uses of lots should not be controlled through the rules of the body corporate.

44 In New South Wales, in 1973, the Conveyancing (Strata Titles) Act 1961 (NSW) was repealed by the Strata Titles Act 1973 (NSW).[42] By s 58(1) of the Strata Titles Act 1973 (NSW), the by-laws of the body corporate were set out in Schedule 1 of that Act.

45 Section 58(2) provided that the body corporate could by special resolution make by-laws amending, adding to or repealing by-laws 'for the purpose of the control, management, administration, use or enjoyment of the lots or the lots and common property the subject of the strata scheme concerned'.

46 Section 120 provided that a Strata Title Board could revoke a by-law if 'having regard to the interest of all proprietors in the use and enjoyment of their lots or the common property, an amendment or repeal of a by-law or addition of a new by-law should not have been made or effected'.

Cluster Titles Act 1974 (Vic)

47 The following year in Victoria, a move to permit more flexible strata title developments, without the many local government restrictions, resulted in the Cluster Titles Act 1974 (Vic). The purpose of the Cluster Titles Bill was described by the then Minister for Local Government in his Second Reading Speech in the Legislative Council as:

A concept of residential development which allows for the free siting of houses on an area of land in such a way as to take every advantage of natural characteristics, instead of being forced into the fixed and inflexible patterns imposed by conventional subdivisions, with strict requirements as to road widths fronting each lot, which itself must be of minimum size and/or frontage. Cluster subdivisions also include provision for common property which is vested in the owners of all lots in the subdivision, and in consequence there is usually a noticeable difference in the locations of buildings on the site.[43]

Subdivision Act 1988 (Vic)

48 Both the Strata Titles Act 1967 and the Cluster Titles Act 1974 (Vic) were repealed in Victoria by the Subdivision Act 1988 (Vic),[44] of which the responsible Minister said that it would be 'the most advanced subdivision legislation in Australia and will be a model for other States'.[45] The Subdivision Act 1988 (Vic) consolidated the law with respect to the subdividing of land, buildings and airspace and integrated the process with the provisions of the Planning and Environment Act 1987 (Vic). The intention was that 'any type of subdivision [could] be approved through the Planning and Environment Act processes, using the referral authority system to cover statutory authority requirements in permit conditions, or through provisions in planning schemes'.[46] The new procedure was explained in 'The New Subdivision Act - A User's Guide October 1989' as follows:

The starting point of the new subdivision system is that all subdivision proposals either require a planning permit or alternatively should be provided for in a planning scheme.[47]

(a) set out the procedure for the subdivision and consolidation of land, including buildings and airspace, and for the creation, variation or removal of easements or restrictions; and

(b) regulate the management of and dealings with common property and the constitution and operation of bodies corporate.[48]

Bodies corporate were now created by a provision in the plan of subdivision and, on the registration of the plan, the body corporate would be incorporated.[49] The proposed rules for the body corporate could accompany the plan; and, on registration of the plan of subdivision, the rules 'must be taken to be the rules made by the body corporate'.[50]

50 The duties, powers and rule making provisions with respect to bodies corporate were removed from the Act, but s 43(1)(h) provides as follows:

The Governor in Council may make regulations -

...

(h) prescribing the constitution, duties, functions, powers, rights and liabilities of a body corporate and its members and the duties of occupiers of lots including but not limited to -

(i) rules to apply to bodies corporate and their members and the occupiers of lots affected by bodies corporate; and

(ii) the powers of a body corporate to amend or revoke the prescribed rules or to make, amend or revoke additional rules;

51 Further, s 29(2) of the Subdivision Act 1988 (Vic) provides that:

A body corporate and its members have the constitution, duties, functions, powers, rights and liabilities specified in the regulations.

Subdivision (Body Corporate) Regulations 2001 (Vic)

52 On the date of commencement of s 43 of the Subdivision Act 1988 (Vic), the Subdivision (Body Corporate) Regulations 1989 (Vic) came into operation.[51] These regulations were superseded by the Subdivision (Body Corporate) (Interim) Regulations 2000 (Vic), which were in turn superseded by the regulations that are relevant to this proceeding - the Subdivision (Body Corporate) Regulations 2001 (Vic).

53 Regulation 201 of the Subdivision (Body Corporate) Regulations 2001 (Vic) provided, with respect to the functions of a body corporate, as follows:

201 Functions of bodies corporate

A body corporate has the following functions -

(a) to repair and maintain -

(i) the common property;

(ii) the chattels, fixtures, fittings and services related to the common property or its enjoyment;

(iii) the equipment and services for which an easement exists for the benefit of the land affected by the body corporate;

(b) to manage and administer the common property;

(c) to take out, maintain and pay premiums on insurance required or permitted by any Act or Division 4 of this Part and any other insurance the body corporate considers appropriate;

(d) to provide a certificate in accordance with Division 7 when requested;

(e) to take any action necessary or desirable to ensure that these Regulations and the rules of the body corporate are complied with;

(f) to carry out any other functions conferred on the body corporate by the Act, these Regulations or any other law.

54 Regulation 202 provided, with respect to the powers of a body corporate, as follows:

202. Powers of bodies corporate

(1) A body corporate has all the powers that are necessary to enable it to perform its functions, including, but not limited to, the following powers -

(a) to set fees intended to cover general administration and maintenance, insurance and other recurrent obligations of the body corporate, based on lot liability and to determine the times for payment of these fees;

(b) to levy special fees or charges designed to cover extraordinary items of expenditure, based on lot liability;

(c) to acquire, hold and dispose of personal property for the use of members of the body corporate and the occupants of lots and the general public;

(d) to borrow, repay and invest money;

(e) to establish and operate any bank account consistent with current business practice;

(f) to appoint or employ persons to assist the body corporate in the performance of its functions;

(g) to provide services or to enter into agreements for the provision of services to members of the body corporate and the occupiers of lots;

(h) any other powers conferred on it by these Regulations or the rules of the body corporate.

55 I have set these functions and powers out in full to demonstrate that they principally relate to issues regarding common property and no mention is made of the control of conduct or use. This position may be contrasted with:

(a) the Conveyancing (Strata Titles) Act 1961 (NSW) which provided for the ability for the registered strata plan to limit the use of a lot to the use specified on the plan;[52] and

(b) the Strata Titles Act 1967 (Vic), which provided that 'use and enjoyment of the the units ... shall be regulated by the by-laws.[53]

56 Regulation 219 provided that the rules set out in Form 1 to the Act, being the 'Standard Rules' applied to all bodies corporate. These Standard Rules related to the use of the common property and lots, as follows:

A member must not, and must ensure that the occupier of a member's lot does not -

(a) use the common property or permit the common property to be used in such a manner as to unreasonably interfere with or prevent its use by other members or occupants of lots or their families or visitors;

(b) park or leave a vehicle or permit a vehicle to be parked or left on the common property so as to obstruct a driveway or entrance to a lot or in any place other than in a parking area specified for such purpose by the body corporate;

(c) use or permit a lot affected by the body corporate to be used for any purpose which may be illegal or injurious to the reputation of the development or may cause a nuisance or hazard to any other member or occupier of any lot or the families or visitors of any such member or occupier;

(d) make or permit to be made any undue noise in or about the common property or any lot affected by the body corporate;

(e) make or permit to be made noise from music or machinery which may be heard outside the owner's lot between the hours of midnight and 8.00 am;

(f) keep any animal on the common property after being given notice by the body corporate to remove the animal after the body corporate has resolved that the animal is causing a nuisance.

57 With respect to the making and amending of the body corporate rules, reg 220 provided as follows:

(1) By special resolution, the body corporate may make rules in addition to the rules applied under regulation 219.

(2) By special resolution, the body corporate may amend or revoke any rules made under sub-regulation (1).

(3) If the body corporate does not make any rules or revokes all its rules, then the standard rules apply to it.

58 It should be noted that reg 220 only contemplated the amendment to rules made in addition to Standard Rules and there was no provision for amendment to, or revocation of, the Standard Rules.

Strata Schemes Management Act 1996 (NSW)

59 In 1996, the New South Wales Parliament passed the Strata Schemes Management Act 1996 (NSW) which, together with Strata Schemes (Freehold Development) Act 1973 (NSW)[54] and Strata Schemes (Leasehold Development) Act 1986 (NSW) provides the current scheme for subdivision and strata management in New South Wales.

60 Section 41 of the Strata Schemes Management Act 1996 (NSW) provides that the by-laws for strata schemes that came into existence after the commencement of that section, are those lodged with the strata plan registered with the Registrar-General subject to any amendment under s 48 (which provides for the recording of amendments by the Registrar-General's Office).

61 Section 42 provides that by-laws for strata schemes that came into existence before the commencement of that section, were those in Schedule 1. Schedule 1 of the Strata Schemes Management Act 1996 (NSW) contains rules principally with respect to common property; but the following matters relate to the conduct of lot owners and invitees:

(1) A prohibition on noise likely to interfere with peaceful enjoyment of another lot owner or any person lawfully using common property.

...

(6) Offensive or embarrassing behaviour to an owner of another lot or a person on the common property.

...

(8) Behaviour of invitees interfering with another lot or persons on the common property.

...

(10) Drying of laundry items on the outside of the building.

(11) Failing to keep boundary windows and doors clean.

(12) Storage of inflammable material.

...

(14) Installation of sufficient floor coverings to prevent transmission of noise from the floor space likely to cause disturbance in another lot.

(15) Garbage disposal.

(16) Keeping of animals.

(17) Appearance of the exterior of a lot.

...

(19) Change in use of lot to be notified.

In particular, cl 19 with respect to change in use, provides as follows:

An occupier of a lot must notify the owners corporation if the occupier changes the existing use of the lot in a way that may affect the insurance premiums for the strata scheme (for example, if the change of use results in a hazardous activity being carried out on the lot, or results in the lot being used for commercial or industrial purposes rather than residential purposes).

62 Section 43(1) states that by-laws can be made in relation to any of the following:

safety and security measures

details of any common property of which the use is restricted

the keeping of pets

parking

floor coverings

garbage disposal

behaviour

architectural and landscaping guidelines to be observed by lot owners

matters appropriate to the type of strata scheme concerned.

However, subsection (2) clarifies that subsection (1) does not limit the matters for which by-laws could be made.

63 Section 47 provides that an owners corporation, by special resolution, can add to, amend or repeal the by-laws for the strata scheme 'for the purpose of the control, management, administration, use or enjoyment of the lots or the lots and common property for the strata scheme'.

64 Section 49 specifically restricts a by-law from prohibiting or restricting the devolution of a lot or a transfer, lease, mortgage, or other dealing relating to a lot; and otherwise puts restrictions on by-laws with respect to children and guide dogs.

65 Section 50 restricts by-laws being made or amended to benefit one owner over another during the 'initial period', being the period up to 'the day on which there are owners of lots the subject of the strata scheme concerned (other than the original owner) the sum of whose unit entitlements is at least one-third of the aggregate unit entitlement'.[55]

66 Further, pursuant to s 138, the Adjudicator appointed under the Act can make orders to settle disputes or rectify complaints about the by-laws in relation to a strata scheme. Specifically, pursuant to s 157, the Adjudicator can reverse the amendment or repeal of a by-law or the addition of a new by-law if it considers that, 'having regard to the interest of all owners of lots in the strata scheme and the use or enjoyment of their lots or the common property', such amendment, repeal or additional rule should not have been made or effected by the owners corporation.

Owners Corporations Act 2006 (Vic)

67 On 31 December 2006, the Owners Corporations Act 2006 (Vic) commenced operation and, along with the Owners Corporations Regulations 2007 (Vic), provides the current scheme for strata management in Victoria. The Explanatory Memorandum to the Owners Corporations Bill stated that 'the Bill provides greater duties, functions, powers and responsibilities for owners corporations to manage common property than are provided by the current Subdivision (Body Corporate) Regulations 2001 (Vic)'.[56] Section 1 of the Owners Corporations Act 2006 (Vic) states that the main purposes of the Act are as follows:

(a) to provide for the management, powers and functions of owners corporations; and

(b) to provide for appropriate mechanisms for the resolution of disputes relating to owners corporations; and

(c) to amend the Subdivision Act 1988 in relation to the creation of owners corporations.

68 Section 4 of the Owners Corporations Act 2006 (Vic) provides with respect to the functions of an owners corporation as follows:

An owners corporation has the following functions -

(a) to manage and administer the common property;

(b) to repair and maintain -

(i) the common property;

(ii) the chattels, fixtures, fittings and services related to the common property or its enjoyment;

(iii) equipment and services for which an easement or right exists for the benefit of the land affected by the owners corporation or which are otherwise for the benefit of all or some of the land affected by the owners corporation;

(c) to take out, maintain and pay premiums on insurance required or permitted by any Act or by Part 3 and any other insurance the owners corporation considers appropriate;

(d) to keep an owners corporation register;

(e) to provide an owners corporation certificate in accordance with Division 3 of Part 9 when requested;

(f) to carry out any other functions conferred on the owners corporation by -

(i) this Act or the regulations under this Act; or

(ii) the Subdivision Act 1988 or the regulations under that Act;

(iii) any other law; or

(iv) the rules of the owners corporation.

69 Section 6 of the Owners Corporations Act 2006 (Vic), with respect to the powers of an owners corporation, provides as follows:

An owners corporation has -

(a) all the powers conferred on the owners corporation by -

(i) this Act or the regulations; or

(ii) the Subdivision Act 1988 or the regulations under that Act; or

(iii) any other law; or

(iv) the rules of the owners corporation; and

(b) all other powers that are necessary to enable it to perform its functions.

70 I have again set out the functions and powers in full to demonstrate that they principally relate to common property issues and no mention is made of the control of conduct or use.

71 Section 138 of the Owners Corporations Act 2006 (Vic), with respect to the power of the owners corporation to make rules, provides as follows:

(1) By special resolution, an owners corporation may make rules for or with respect to any matter set out in Schedule 1.

(2) By special resolution, an owners corporation may amend or revoke any rules made under subsection (1).

(3) A rule must be for the purpose of the control, management, administration, use or enjoyment of the common property or of a lot.

72 Schedule 1 to the Act under the heading 'Power to make rules of owners corporation' provides the following categories (with the sub-clauses deleted except for relevant categories):

1 Health, safety and security

1.1 Health, safety and security of lot owners, occupiers of lots and invitees.

1.2 Safety of children, including their exclusion from areas that may be unsafe for them or restricting activities that may be unsafe.

1.3 Storage of flammable liquids and other dangerous substances and materials.

1.4 Waste disposal.

2 Committees and sub-committees

3 Management and administration

4 Use of common property

4.1 Use of common property.

4.2 Use of equipment, services and amenities on common property.

4.3 Vehicles and parking on common property.

4.4 Drying of laundry on common property or external or visible areas of lots.

4.5 Damage to common property (but not preventing the installation of insect screens or safety lock devices).

4.6 Deposit of rubbish and other material on common property.

5 Lots

5.1 Change of use of lots.

5.2 External appearance of lots.

5.3 Requiring notice to the Owners Corporation of renovations to lots.

5.4 Times within which work on lots can be carried out.

6 Design

7 Behaviour of persons

7.1 Behaviour of owners, occupiers and invitees on common property.

7.2 Noise and other nuisance control.

8 Dispute resolution

9 Notices and documents

10 Common seal

73 Section 139 of the Owners Corporations Act 2006 (Vic), with respect to model rules, provides as follows:

(1) The regulations may prescribe model rules in relation to any matter in respect of which rules can be made.

(2) If the owners corporation does not make any rules or revokes all of its rules, then the model rules apply to it.

(3) If the model rules provide for a matter and the rules of the owners corporation do not provide for that matter, the model rules relating to that matter are deemed to be included in the rules of the owners corporation.

The Owners Corporations Act 2006 (Vic) did not change the ability for the original rules to be made by such proposed rules accompanying the plan of subdivision at the time of registration as referred to above.[57] However, unlike New South Wales, the lodging of proposed rules with the plan is not compulsory; and the effect of s 139(2) is that the model rules apply if there are no proposed rules accompanying the plan upon registration.

Owners Corporations Regulations 2007 (Vic)

74 The Owners Corporations Regulations 2007 (Vic) came into operation on 31 December 2007,[58] the same day as the Owners Corporations Act 2006 (Vic).[59]

75 Regulation 8 of the Owners Corporations Regulations 2007 (Vic) provides that, for the purposes of s 139(1) of the Act, the rules set out in Schedule 2 are prescribed as model rules for an owners corporation. I will later refer to the relevant model rules, but the model rules are set out in full in the Schedule to these reasons.

Strata Schemes Management Act 2015 (NSW) and the Strata Schemes Development Act 2015 (NSW)

76 New South Wales has adopted further reforms in the area of strata laws by the Strata Schemes Management Act 2015 (NSW) and the Strata Schemes Development Act 2015 (NSW). I have not referred to these Acts for the purposes of this comparison because the Acts have not yet commenced operation, and as such, have not been considered in any of the decisions of the New South Wales courts to which I shall refer.

77 In Victoria, the proposed rules for an owners corporation may accompany the plan of subdivision, in which case the rules will be 'taken to be the rules made by the Owners Corporation' on registration of a plan of subdivision.

78 In New South Wales, the proposed rules for the owners corporation must accompany the strata plan when it is submitted for registration and those by-laws are registered with the strata plan.[60]

79 As a consequence of the above difference, in Victoria, there is provision for the owners corporation to make, as well as amend or revoke, rules.[61] In New South Wales, the requirement for there to be rules accompanying the plan of subdivision means that the owners corporation only passes by-laws that add to, amend or repeal the by-laws. As a consequence, in New South Wales, the restriction on the power to add to, amend or repeal the by-laws (ie for the purpose of the control, management, administration, use or enjoyment of the common property or of a lot) does not expressly extend to the original by-laws accompanying the plan.[62]

80 In Victoria, if no by-laws accompany the plan of subdivision, or such by-laws are revoked, then the model rules apply. Further, if the rules of the owners corporation do not provide for a matter, which is provided for in the model rules, the model rules relating to that matter are deemed to be included in the rules of the owners corporation.[63]

81 In Victoria, except for express restrictions,[64] the power of the owners corporation is to make rules:

(a) for or with respect to any matter set out in Schedule 1;

(b) with the additional requirement that such rules be for the purpose of the control, management, administration, use or enjoyment of the common property or of the lot.[65]

82 In New South Wales, except for express restrictions,[66] the owners corporation has powers to make by-laws:

(a) in relation to matters including but not limited to those specified in s 43 of the Strata Schemes Management Act 1996 (NSW); and

(b) providing that the amendment to the by-laws is 'for the purpose of the control, management, administration, use or enjoyment of the lots or the lots and common property for the strata scheme'.[67]

It is notable that a by-law that purported to prohibit short-term stays under the Strata Schemes Management Act 1996 (NSW), which were pursuant to a lease,[68] may be invalid under s 49(1) as a restraint on the devolution of a lot.[69]

83 Although the powers of an owners corporation to make by-laws is substantially broader in New South Wales, there are two additional restraints on the scope of by-laws (not included in Victorian legislation):

(a) There are specific restrictions on an owners corporation with respect to making, amending or repealing by-laws in the 'initial period'.[70]

(b) The amendment or repeal or addition of a by-law (but not an original by-law) can be overturned if an Adjudicator considers that the amendment, repeal or addition should not have been made 'having regard to the interest of all owners of lots in a strata scheme in the use and enjoyment of their lots or the common property'.[71]

Was Rule 34 validly made?

84 In determining whether Rule 34 was a valid exercise of the owners corporation power to make by-laws under the Subdivision Act 1988 (Vic) and the Subdivision (Body Corporate) Regulations 2001 (Vic), 'the fundamental question is whether the [rule] is within the scope of what the Parliament intended when enacting the statute which empowers the subordinate authority to make certain laws'.[72] It is not sufficient to conclude that a rule is valid because, on the face of the impugned regulation, there appears to be a connection with the statutory purpose.[73] Nor may a court conclude that a rule is invalid because 'the court itself thinks the regulation inexpedient or misguided'.[74]

85 The proper approach to the determination of the validity of subordinate legislation is as follows:

(a) First, it is necessary to determine the statutory object to be served by,[75] and the 'true nature and purpose'[76] ('the Statutory Purpose') of, the power to make regulations.[77] The relevant inquiry as to the Statutory Purpose of the power is considered by reference to the scope, object and subject matter of the empowering Act.[78]

(b) Secondly, it is necessary to characterise the impugned regulation by reference to the circumstances in which it applies, in particular its operation and effect.[79] The evidence of the circumstances in which the regulation will operate will enable the court to form a view about the nature and apparent purpose of the regulation;[80] and the existence and dimensions of the actual or threatened mischief sought to be addressed by the impugned regulation.[81]

(c) Thirdly, 'once armed with knowledge of these facts',[82] the court then makes its own assessment of:

(i) whether the connection between the likely operation of the regulation and the Statutory Purpose of the power is sufficiently direct and substantial; or

(ii) whether the regulation could not reasonably have been adopted as a means of attaining the Statutory Purpose, in which case it will be so lacking in reasonable proportionality as not to be a real exercise of the power.[83]

In the latter case the regulation will be invalid, not because it is inexpedient or misguided, but because it is not a real exercise of the power.[84]

86 If it is determined that there is a sufficiently direct and substantial connection, '[n]o further inquiry into the proportionality of the by-law is permitted or required'.[85] There is no separate question of whether the court considers that the power is disproportionate or so unreasonable that it should interfere. It is not for the court to substitute its judgment for that of the legislator;[86] or to ask whether, in the court's opinion, the by-law is a reasonable and proportionate response to the mischief to which it is directed.[87] The question is whether the by-law is authorised by the relevant Act;[88] and not whether the court should hold the regulation to be invalid because it appears to the court to be an 'unreasonable provision'.[89]

87 The question of whether there is sufficient connection between the Statutory Purpose and the impugned regulation necessarily involves questions of degree and judgment.[90] However, the validity of the impugned regulation is a question of law and the appellate court must determine for itself the sufficiency of the connection.[91]

88 Having stated the principles in the abstract, it is apparent that each case will be determined by reference to its own facts relating to the Statutory Purpose of the empowering Act, the provisions of the impugned regulation and the evidence of the circumstances surrounding the making of the regulation and its operation.

Authorities relating to the determination of validity

89 In Minister for Resources v Dover Fisheries Pty Ltd,[92] Gummow J identified the following indicia of regulations which would fall outside the ambit of being a reasonable means of attaining the ends of the legislative delegation of power:

(a) Regulations which vary or depart from the positive provisions of the Act.

(b) Regulations which go outside the field of operation which the Act marks out.[93]

90 In South Australia v Tanner,[94] the empowering legislation was s 10(1) of the Waterworks Act 1932 (SA) which provided for the Governor to make regulations for, among other things, 'regulating, controlling or prohibiting the use of any land within a watershed or within a watershed zone so as to reduce or prevent the deterioration or pollution of any water within a watershed or watershed zone'.[95] The impugned regulation was reg 37.2 of the Waterworks Regulations 1974 (SA) that prohibited the erection, construction, enlargement or establishment of a piggery, zoo or feed lot on any land within a watershed.

91 The respondent planned to develop certain land with the construction of a number of shops and offices, an aviary and car parks. In proceedings before the South Australian Planning Appeals Tribunal, an issue arose as to the relevance of reg 37.2, which it was considered prohibited absolutely the erection of an aviary. The respondent was successful in obtaining a declaration in the Full Court of the Supreme Court of South Australia that reg 37.2 was beyond the power to make regulations contained in s 10 of the Waterworks Act 1932 (SA). The High Court by majority overturned the decision on appeal.

92 For the purposes of determining the Statutory Purpose of the regulation making power, the plurality[96] considered the following features of the regulation making power to be significant:

(a) The power was not limited to regulating or controlling the use of land. It specifically extended to prohibition.

(b) The power was not conferred simply to reduce the existing pollution or deterioration of water; but extended to prevention.[97]

(c) The mischief sought to be addressed, being the pollution or deterioration of water, was a problem that could range from slight to grave and, from the whole range of measures that could be applied for the purpose, it may be impossible to demonstrate which of the measures adopted had been, or would be, effective. Their Honours observed that 'the prudent choice of measures will often depend on administrative practicalities and the availability of expert advice of a scientific nature'.[98]

93 The plurality referred to the evidence that 'the problem of the quality of water in the Watershed is an acute one and that quite extraordinary measures are justified in order to reduce or prevent its deterioration or pollution'.[99] Accordingly, although a regulation which extended to prohibit an aviary on the basis that it came within the meaning of a zoo was a considerable extension of the ordinary meaning of a zoo, they were unable to conclude that it was not reasonably open to the authority to prohibit all exhibitions of birds in furtherance of the stated purpose.[100]

94 Brennan J, in dissent, considered that, although it must be accepted that there was a connection between water pollution and bird waste or bird borne diseases, the following two features of the regulation indicated its invalidity:

(a) The failure to prescribe factors such as the number or the species of animals or birds which would be material to the degree of risk to the water supply.

(b) The uniformity of the prohibition throughout the whole of the watershed area irrespective of the access of the land to any watercourse or other means of transmitting pollution.[101]

The undiscriminating nature of the regulation certainly reveals that, in many instances, the regulation would apply to an activity which does nothing to enhance the risk of pollution; but it also reveals - and this is relevant to validity - that the regulation has been framed without regard to the limitation contained in [the empowering section].[102]

96 It follows that the breadth of the impugned regulation can be a consideration in determining whether it has exceeded the Statutory Purpose. Depending, of course, on the statutory context, a power to regulate an activity will not ordinarily include a power to totally prohibit it and, for that reason, a prohibition subject to the obtaining of consent is regarded as a prohibition.[103] Examples of invalid prohibiting regulations include:

(a) A by-law which prohibited the erection of any building within a municipality without the approval of the council was not within the ambit of an Act which empowered the making of by-laws regulating and restraining the erection and construction of buildings.[104]

(b) A clean air regulation providing that 'no person shall light, maintain or permit to burn any open fire on any land or premises without the written approval of the Local Board of Health' was not within the Statutory Purpose of a Health Act, which empowered regulations for or with respect to 'regulating, controlling and prohibiting the emission of impurities from fuel burning equipment or any air impurity source'.[105]

97 The invalidity of these regulations was the result of the application of the above mentioned principles, in particular, the impugned regulations were outside the Statutory Purpose of the relevant regulation making power. It is apparent that regulations that prescribe the time, the place, the manner, the circumstances or the conditions in which activities may occur are more likely to be found within the Statutory Purpose of a regulation making power than a regulation which prevents or suppresses the conduct to be regulated.[106]

98 However, the power to regulate an activity may include the power to prohibit aspects of the activity particularly if subject to discretionary dispensation.[107] Attorney-General (SA) v Adelaide City Corporation[108] was such a case. The High Court held that a by-law of the Adelaide City Corporation prohibiting persons from preaching, canvassing, haranguing or distributing material on any road without permission had a sufficiently direct and substantial connection with the Statutory Purpose of the Local Government Act 1934 (SA) empowering a council to make by-laws 'generally for the good rule and government of the area, and for the convenience, comfort and safety of its inhabitants'.

Was Rule 34 within the scope of the rule making power of the appellant under the Subdivision (Body Corporate) Regulations 2001 (Vic)?

99 The appellant contended that the VCAT Member erred in finding that, under the Subdivision Act 1988 (Vic) and the regulations thereunder, '[t]here was no specific function or power conferred on bodies corporate to regulate the use of a private lot'.[109] The appellant contends that this was an error for the following reasons.

(a) The provisions of the Subdivision (Body Corporate) Regulations 2001 (Vic) permitted the body corporate to confer functions on itself.

(b) Rule 34 was within the function 'to take any action necessary or desirable' in reg 201(e).

100 The appellant submitted that the ability to confer functions on itself arose from regs 220(1), 202(1)(h) and 201(f) as follows:

(a) Regulation 220(1) of the Subdivision (Body Corporate) Regulations 2001 (Vic) provides that:

By special resolution, the body corporate may make rules in addition to [the Standard Rules] applied under regulation 219.

The appellant submitted that this regulation 'was drafted so as to allow the body corporate to decide upon its own rules. In doing so, the body corporate might confer functions and powers upon itself'.

(b) Apart from the specific functions and powers conferred by regs 201 and 202, a body corporate was given 'any other functions [or powers[110]] conferred on the body corporate by the Act, these Regulations or any other law'.[111]

(c) Accordingly, the appellant submitted that as there 'was no express limit imposed on the body corporate by the enabling statute to make the rules' and, by enacting Rule 34, the appellant 'conferred the requisite function and power upon itself to regulate the use of private lots'.

The function 'to take any action necessary or desirable'

(a) Regulation 201(e) of the Subdivision (Body Corporate) Regulations 2001 (Vic) provided that a body corporate has a function 'to take any action necessary or desirable to ensure that these Regulations and the rules of the body corporate are complied with'.

(b) Because the Standard Rules were part of the Subdivision (Body Corporate) Regulations 2001 (Vic) and were part of the rules of the appellant, reg 201(e) conferred a function to make further rules 'necessary or desirable' to ensure that the Standard Rules were complied with.

(c) Rule 34 was a rule considered by the appellant to be 'necessary or desirable' to ensure that a lot was not used for any purpose which may cause a nuisance or a hazard to others in accordance with Standard Rule (c).

102 The respondents submitted that there were no errors in the reasoning of the VCAT Member because a body corporate cannot confer the requisite function and power upon itself and the rule making power was constrained by functions and powers under the regulations and rules with respect to the matters set out in the Standard Rules.

Body corporate cannot confer the requisite function and power upon itself

103 The respondent submitted that the appellant's powers and functions are those conferred by the Subdivision Act 1988 (Vic) and the regulations made thereunder. Accordingly, the statutory functions and powers 'do not empower the body corporate to enlarge its powers by the making of rules but rather empowers the making of rules consistent with the 1988 Act and the regulations in furtherance of its functions and powers'.

Rule making power constrained by functions and powers under the regulations and rules with respect to the matters set out in the Standard Rules

104 The respondent submitted that the VCAT Member correctly found that there was 'no specific function or power conferred on bodies corporate to regulate the use of a private lot'.[112] Further, 'the Tribunal did not err in construing the power to make "additional rules" as being informed by the subject matter of the "standard rules" and the functions and powers of the body corporate under the 1988 Act'.

105 The respondent submitted that the appellant did not have power to make a rule prohibiting specified uses of lots. Rule 34 prohibits Short-Term Letting altogether and therefore, in accordance with the principle in Swan Hill Corporation v Bradbury,[113] it extends beyond any power to regulate with respect to uses of the lots.

106 Section 29 of the Subdivision Act 1988 (Vic) provides that:

A body corporate and its members have the constitution, duties, functions, powers, rights and liabilities specified in the regulations.

107 The rule making power is found in reg 220 of the Subdivision (Body Corporate) Regulations 2001 (Vic) which provided that a body corporate may make rules in addition to the Standard Rules.

108 To determine the fundamental question of whether Rule 34 was within the scope of what the Parliament intended when enacting the Subdivision Act 1988 (Vic) and its regulations, as discussed above, I consider it necessary to consider the following questions:

(a) What was the relevant Statutory Purpose of the Subdivision Act 1988 (Vic) and its regulations?

(b) What is the character of Rule 34?[114]

(c) Is there a sufficiently direct and substantial connection between the Statutory Purpose and the likely operation of Rule 34?

What was the Statutory Purpose of the relevant legislation?

109 To determine the Statutory Purpose; I have had regard to the following:

(a) The objectives of the regulations included 'to specify the functions, powers and duties of bodies corporate'.[115]

(b) Regulation 201 set out the functions of bodies corporate[116], which included:

(i) to repair and maintain the common property;[117]

(ii) to manage and administer the common property;[118]

(ii) to take out, and pay premiums on insurance on the common property and otherwise;[119] and

(iv) to ensure compliance with the rules of the body corporate.[120]

(c) Regulation 202 provided that a body corporate has all the powers that are necessary to enable it to perform its functions which expressly includes the setting and levying of fees, the provision of services to members of the body corporate and the occupiers of lots; and powers conferred on it by the regulations and the rules of the body corporate.

(d) Part 2 of the regulations contained specific provisions with respect to duties and functions regarding financial provisions,[121] use of and repairs, maintenance and other works on the common property (including powers to compel a member to carry out repairs, maintenance and other works to the member's lot because the outward appearance of the lot is adversely affected or the use and enjoyment of the lots or common property by other members is adversely affected),[122] and insurance particularly for the common property.[123]

110 These provisions and the review of the development of the strata titles legislation demonstrate that, at the time Rule 34 was made, the principal function of the appellant was to own and manage the common property of the strata development. It is notable, in my opinion, that there is no reference in

(a) the Explanatory Memorandum to the Subdivision Bill,

(b) the Second Reading of the Subdivision Bill,[124]

(c) the Subdivision Act 1988 (Vic) or its regulations

to bodies corporate having a function to regulate the conduct of lot owners to ensure that they had reasonable regard for the interests of other persons (except when using the common property).

111 However, the fact that Parliament did intend that bodies corporate would have, at least, some role to play in the regulation of the conduct of lot owners is demonstrated by the following:

(a) Strata title legislation was enacted to provide for the growing trend of persons to live in close proximity in new developments and, in the precursor to the Subdivision Act 1988 (Vic), the then Minister for Labour and Industry referred to the fact that it was necessary to provide some means of ensuring that people who are living close to each other have reasonable regard for the interests of other people.[125]

(b) Pursuant to reg 202(1)(h) of the Subdivision (Body Corporate) Regulations 2001 (Vic), bodies corporate have the powers conferred on it by their rules and the regulations. Accordingly, by reg 219 the Standard Rules applied to all bodies corporate. The Standard Rules principally relate to the common property, but they also impose obligations on lot owners not to allow their lot to be used for any purpose which may be illegal or injurious to the reputation of the development or may cause a nuisance or hazard to any other member or occupier of any lot; or to permit undue noise in or about any lot. It specifically proscribes the making of noise from music or machinery which may be heard outside the owner's lot between midnight and 8:00 am.[126]

112 In my opinion, the following matters indicate that it was Parliament's intention that a body corporate's powers with respect to the regulation of conduct on lots would be limited to its power to enforce the Standard Rules:

(a) As noted above, there is a complete absence of any reference in the Subdivision Act 1988 (Vic), including its regulations, to any function to regulate conduct between lot owners.

(b) The Standard Rules, which do include conduct rules, applied to all bodies corporate[127] and cannot be altered.[128]

(c) The only express power to regulate conduct arises from the function and power to enforce the rules of the body corporate.[129]

113 I do not consider that such an interpretation would be extreme because, apart from the powers to take action pursuant to the Standard Rules, the interests of lots owners could be protected from undue interference from neighbours by exercising their rights under common law or statute.[130]

114 If this construction is correct, then the appellant had no power to make conduct rules and its power, with respect to conduct matters, was limited to enforcing the Standard Rules. In those circumstances, subject to the argument that otherwise invalid rules are deemed to be valid by s 27(2C) Subdivision Act 1998 (Vic) or the transitional provisions of the Owners Corporations Act 2006 (Vic), this appeal must fail.

115 However, it was the position of both parties, and the finding of the VCAT Member, that bodies corporate could, at least, make rules with respect to the matters set out in the Standard Rules.[131] This view may be consistent with the views expressed with respect to the New South Wales strata title legislation by Young JA in Casuarina Rec Club Pty Ltd v The Owners-Strata Plan No 77971.[132]

116 In case my construction, referred to in [112] above is wrong, I will deal with the validity of Rule 34 on the assumption (as was accepted by both parties) that the Parliament demonstrated an intention to empower bodies corporate to make by-laws with respect to conduct matters within the scope of the Standard Rules. Accordingly, I turn now to consider whether Rule 34 could be characterised as a by-law with respect to a conduct matter within the scope of the Standard Rules.

117 The evidence established that the purpose of Rule 34 was to address identified conduct issues caused by short-term tenants particularly issues relating to noise, unruly behaviour, and some safety issues.

118 Although the allegation that short-term tenants were more disruptive than long-term tenants and lot owners was disputed by the evidence of Mr Salter, I consider that the VCAT Member correctly concluded that she was not called upon to decide the merits of Short-Term Letting.

119 In ascertaining the facts and circumstances relevant to the determination of the validity of an impugned regulation, there are some evidential features peculiar to such matters:

(a) The facts and circumstances are not approached as if the matters were merely an issue between the parties.[133] In Commonwealth Freighters Pty Ltd v Sneddon[134] Dixon CJ said:

Highly inconvenient as it may be, it is true of some legislative powers limited by definition, whether according to subject matter, to purpose or otherwise, that the validity of the exercise of the power must sometimes depend on facts, facts which somehow must be ascertained by the court responsible for deciding the validity of the law.

The Chief Justice observed that the Court must discover the facts 'as best it can'.[135]

(b) The courts treat the fact that the power was exercised by the authority as 'cogent evidence' of its belief in the necessity and expediency for the regulation.[136]

120 The inquiry into the operation and effect of the rule is broad and material matters may include:

(a) the seriousness of the mischief which is intended to be addressed, and whether extraordinary measures are justified for that purpose;[137]

(b) difficulties in formulating measures that can address the mischief;[138]

(c) whether the impugned regulation will impact on activities that are not a cause of the mischief;[139]

(d) the availability of an alternative mode of regulation;[140]

(e) whether the impugned regulation will impact on fundamental rights.[141]

Accordingly, I consider that the evidence about the effect of Short-Term Letting in the Watergate Apartments was relevant, despite the fact that plainly it could not be directed to the actual intention of the appellant at the time Rule 34 was made in 2004. In my opinion, it is important to identify that the purpose of such evidence is to establish the bona fide purpose for which the regulation was made, together with the existence or dimension of the mischief sought to be addressed by the rule in its operation.[142] This evidence establishes the context in which the rule operates and enables the Court to assess the extent of the connection with the Statutory Purpose; and whether the rule could 'reasonably have been adopted as a means of attaining the ends of the power';[143] or whether it 'goes beyond any restraint which could be reasonably adopted for the prescribed purpose'.[144]

121 Although the evidence of Mr Salter (as set out in paragraph [18] above) challenged, in effect, the necessity for Rule 34, the lack of any challenge to the bona fides of the appellant's intention and the fact that the rule was adopted by the appellant was 'cogent evidence' of the appellant's belief in the necessity and expediency for the rule. In my opinion, it would not be necessary for the appellant to establish specific events that had occurred within its strata subdivision. It may be appropriate to lead evidence of press reports or incidents reported to have occurred in other developments to establish the existence and dimensions of the actual or threatened mischief sought to be addressed by the impugned rule. Whether or not bodies corporate have the necessary power to make a rule should not be determined on a case by case basis dependent upon the past experiences of each particular strata development. In determining legislative facts the Court may have regard to evidence that has not been proved conventionally[145] or otherwise in accordance with the rules of evidence[146] including '[a]ll material relevant (in a general, not technical, sense) to the matter under consideration'[147] and knowledge acquired from study.[148]

Is there a sufficiently direct and substantial connection between the Statutory Purpose and the likely operation of Rule 34?

122 The fact that there is a connection between Rule 34 and the Statutory Purpose demonstrated by the conduct prohibitions in the Standard Rules relating to noise and the like, is apparent. However, the question is whether such connection is sufficiently direct and substantial. More specifically in this case, do the relevant indicia demonstrate that the Parliament intended to confer the power to make rules generally prohibiting particular uses of lots, which the appellant bona fide considered would give rise to increased incidents of conduct problems such as nuisance, hazard or undue noise; or was the power limited to regulating only actual incidents which constituted unreasonable interferences with the enjoyment of other lots?

123 In my opinion, the breadth of Rule 34 has caused it to exceed the scope of what was intended by the subdivision legislation and, in particular, the Subdivision (Body Corporate) Regulations 2001 (Vic) for the following reasons:

(a) The subdivision legislation demonstrates that the principal function of a body corporate is to own and manage the common property. It gives certain limited powers to enforce maintenance of private lots and, in my opinion, contemplates only a very limited role for the body corporate in the regulation of conduct issues within lots.[149]

(b) A review of the development of the strata title legislation demonstrates that it was always intended that unit owners would retain the registered freehold interest in their respective lots.[150] Accordingly, it is fundamentally important that persons are entitled to conduct themselves on their land and buildings as they like, subject to prohibitions created by the common law, such as nuisance, or by legislation, such as planning and environmental regulations. Indeed, there is a presumption, in the interpretation of statutes, against an intention to interfere with vested property rights and such legislation is 'not to be construed as interfering with vested interests unless that intention is manifest'.[151]

(c) Senior counsel for the appellant, Mr Margetts QC, who appeared with Mr Luxton, submitted in the course of argument that, subject to a separate question of reasonableness, the rule making power would extend to permit the banning, inside lots, of barbecues, the consumption of alcohol and the presence of children provided that the exercise of power was bona fide intended to prevent the noise and hazard issues identified in the Standard Rules. With respect, I do not accept, for the reasons stated above, that there is any separate test of reasonableness or proportionality. Further, unlike the New South Wales legislation, there is no right of appeal against intrusive by-laws provided in the Victorian legislation. Nevertheless, counsel's submission confirms that the appellant's contention is that the Parliament had an intention to provide powers that could substantially inhibit the conduct of lot owners in their own lots. In my opinion, such an intention would need to be expressed in clear language and should not be inferred on the basis of the tenuous arguments of construction available to the appellant in this case.

(d) Any business conducted by a lot owner would be subject to planning legislation. A lot owner would not be permitted to pursue business activities without satisfying all relevant planning obligations. On the appellant's contention, the Parliament has demonstrated an intention that would have, in effect, permitted a body corporate to impose an additional and substantially unappellable control over the use to which lot owners intended to put their privately owned property. I reject this contention for the following reasons:

(i) There is no indication in the legislation or extrinsic material that Parliament intended that a body corporate could, in effect, second guess an owner's proposed use of a lot that was permitted under the planning scheme.

(ii) The fact that the stated intention of the Subdivision Act 1988 (Vic) was that it would incorporate the subdivision and planning processes by the subdivision being approved through the processes outlined in the Planning and Environment Act 1987 (Vic),[152] does not, in my opinion, sit well with inferring a Parliamentary intention that a body corporate would be invested with overriding powers to control the use of the lots on the strata plan.

124 In summary, I do not consider that the Parliament conferred powers on bodies corporate for the Statutory Purpose of substantially interfering with rights and privileges usually attendant upon freehold owners. To adopt the words of Brennan J, notwithstanding that his Honour was in the minority, '[t]he undiscriminating nature of the regulation certainly reveals that, in many instances, the regulation would apply to [Short-Term Letting] which does nothing to enhance the risk of [conduct problems]; but it also reveals - and this is relevant to validity - that the regulation has been framed without regard to' a body corporate's limited functions and powers under the Subdivision Act 1988 (Vic) and its regulations.[153] Accordingly, I consider that Rule 34 was not sufficiently directly or substantially connected with the Statutory Purpose to be a real exercise of the rule making power.

Was Rule 34 a prohibition of the matter to be regulated?

125 As noted in paragraph [24(c)] above, the VCAT Member found that if there was a sufficient connection with the Statutory Purpose she considered, applying the principle in Swan Hill Corporation v Bradbury, that Rule 34 was invalid because it sought 'to prohibit certain types of uses altogether'.[154] With respect, I do not consider the principle in Swan Hill Corporation v Bradbury applies to this case. As the cases referred to in paragraphs [89]-[98] above demonstrate, the principle in Swan Hill Corporation v Bradbury applies when the authority is empowered to regulate a specific activity (in that case the erection of buildings); but in fact simply prohibits the whole of the activity.

126 The appellant, in this case, had power to make rules with respect to certain areas of conduct. It did not seek to ban all conduct over which it had power to make rules. A power to regulate an activity may include the power to prohibit aspects of that activity.[155]

127 However, the more substantial the ban on part of the activities that are subject to regulation, the greater the prospect that the ban may be found to be in excess of power.[156]

Was Rule 34, if ultra vires, deemed to be valid by the Subdivision Act 1988 (Vic)?

128 At the time of registration of the Additional Rules, which included Rule 34, on 21 September 2004, s 27(2C) of the Subdivision Act 1988 (Vic) provided as follows:

A plan providing for the creation of a body corporate or merger of bodies corporate may be accompanied by proposed rules for the body corporate and, on registration of the plan, they must be taken to be rules made by the body corporate and may be revoked or amended accordingly.

Did s 27(2C) validate rules that were otherwise ultra vires?

129 The appellant submitted that, even if Rule 34 was not within power, the Additional Rules accompanied the plan and therefore s 27(2C) constituted a deeming provision which required the Additional Rules to be treated as the rules made by the body corporate. The appellant relied upon Muller v Dalgety & Co Ltd[157] in support of the proposition that the effect of a statutory deeming provision is that, for the purposes of the Act, a thing is deemed to be something, which in fact it is not.

130 The respondents submitted that s 27(2C) did not have the effect of curing invalid rules. It was contended that, although Mahon v Owners Corporation PS349276K[158] was with respect to a provision in the Owners Corporations Act 2006 (Vic) and not the Subdivision Act 1988 (Vic), the proposition from that case that 'a rule does not become valid just because it has been recorded', was still applicable.[159]

(a) the effect of s 27(2C) was to deem rules, not otherwise within power, to be valid; and

(b) the Additional Rules accompanied the plan and were therefore 'taken to be the rules made' pursuant to s 27(2C).

Was the effect of s 27(2C) to deem rules, not otherwise within power, to be valid?

132 I do not consider that s 27(2C) also had the effect of deeming rules, which could not be made pursuant to reg 220, to be valid for the following reasons:

(a) Rules 'made by the body corporate', which were beyond power, would not become valid rules of the body corporate. In my opinion, a plain reading of the words 'taken to be the rules made by the body corporate' does not purport to give the rules, which accompany the plan providing for the creation of a body corporate, any greater validity than if the rules were (purportedly) made by the body corporate by special resolution under reg 220 of the Subdivision (Body Corporate) Regulations 2001 (Vic).

(b) The construction contended for by the appellant would, in effect, result in all restrictions on the powers of the body corporate to make rules being rendered ineffectual by adoption of the procedure of lodging the proposed rules with the plan.

(c) A construction that permits the provisions with respect to the powers of the body corporate to be so easily avoided would not promote the relevant purposes or objects of the Subdivision Act 1988 (Vic).[160]

In my opinion, the purpose of the section was to make provision for the adoption of rules without the necessity of the body corporate passing rules by special resolution after it is created.

Were the Additional Rules 'taken to be the rules made' pursuant to s 27(2C)?

133 Further, I find that, as a matter of fact, the Additional Rules were not 'taken to be the rules made' pursuant to s 27(2C). Plan of subdivision 501391P was registered on 28 June 2004, at which time, pursuant to s 28 of the Subdivision Act 1988 (Vic), the appellant was incorporated as a body corporate. At the inaugural general meeting of the appellant on 10 August 2004, the appellant adopted the Additional Rules by special resolution pursuant to reg 220(1) of the Subdivision (Body Corporate) Regulations 2001 (Vic). Accordingly, the Additional Rules did not accompany the plan and were not made pursuant to s 27(2C).

134 The appellant contends that the Additional Rules did accompany the plan and were therefore made pursuant to s 27(2C) for the following reasons:

(a) The development of the Watergate Apartments was a staged subdivision in accordance with s 37 of the Subdivision Act 1988 (Vic), the master plan for which was registered on 28 June 2004.

(b) The plan for stage 3 of the subdivision, which created the relevant lots, was submitted for registration shortly before registration of that stage 3 plan on 22 September 2004.

(c) The Additional Rules were submitted for registration on 21 September 2004; and it should be inferred that they accompanied the plan for stage 3.

The appellant also contends that it 'appears' that the plan for stage 3 was the plan that created Owners Corporations 1 and 2 pursuant to s 37(3)(c)(ii) Subdivision Act 1988 (Vic).

135 I reject the appellant's contentions for the following reasons:

(a) Section 27(2C) provided that a plan providing for the creation of a body corporate may be accompanied by proposed rules. It provided a scheme for proposed rules of a yet to be incorporated body corporate to be taken to be the rules as though they were made by special resolution of the body corporate.

(b) Bodies Corporate 1 and 2 were created before registration of the plan for stage 3 on 22 September 2004 because the 'Minutes of the Inaugural General Meeting' record:

(i) that the meeting was the first meeting of Bodies Corporate 1 and 2 which was held on 10 August 2004;

(ii) that 'Body Corporates 1 and 2 ("the Body Corporate") [had been] constituted pursuant to the Subdivision (Body Corporate) Regulations ("the regulations") in respect of Plan of Subdivision No PS 501391P'; and

Resolved (as a special resolution) that Body Corporate pursuant to its powers to do so:

That the Body Corporate adopt the Additional Rules as attached for Body Corporate 1 and Body Corporate 2, Waterview Walk, Docklands Vic 3008.

(c) The Additional Rules were lodged with a Form 2 - Notification of Making, Amendment or Revocation of Rules - as was required by reg 220(4) of the Subdivision (Body Corporate) Regulations 2001 (Vic) after a body corporate makes rules under reg 220.

(d) The Notification of Making, Amendment or Revocation of Rules records that the Additional Rules were made by special resolution passed on 10 August 2004 under reg 220 of the Subdivision (Body Corporate) Regulations 2001 (Vic).

Accordingly, although the Notification of Making, Amendment or Revocation of Rules and the Additional Rules may have been lodged at the same time as the plan for stage 3, the Additional Rules had been passed by special resolution of an existing body corporate more than a month earlier and did not purport to be 'taken to be the rules made' pursuant to s 27(2C).

Was Rule 34 validated by the transitional provisions of the Owners Corporations Act 2006 (Vic)?

136 Clause 5 of the transitional provisions of the Owners Corporations Act 2006 (Vic) provides as follows:

Any rules of a subdivision body corporate in force immediately before the commencement day, continue in force on and after that commencement and are deemed to be rules of the owners corporation under the new Act to the extent that they are not inconsistent with the new Act or the regulations under the new Act.[161]

137 The appellant contended that, whether Rule 34 was made validly or not, the rule must be taken to have been in force upon the commencement of the Owners Corporations Act 2006 (Vic) on 31 December 2007 because a recording of the Additional Rules resulted in the appellant's interests under those Additional Rules being indefeasible under the Transfer of Land Act 1958 (Vic). The appellant developed this argument as follows:

(a) The Transfer of Land Act 1958 (Vic) and the Subdivision Act 1988 (Vic) must be read as one Act.[162]

(b) The Registrar of Titles was required to record and amend information[163] on the relevant plan; or in an appropriate part of the Register.[164] The Additional Rules passed on 10 August 2004 were in fact recorded by the Registrar of Titles as an addition or change to the plan on 28 September 2004 and became effective on that date.[165]

(c) The Additional Rules document was an 'instrument' because s 4 of the Transfer of Land Act 1958 (Vic) defines that term as including 'every document ... in respect of which any recording is, by this Act or any other Act, directed, required or permitted to be made in the Register'.

(d) As an 'instrument', the Additional Rules created an estate or interest which became immediately indefeasible pursuant to s 40 of the Transfer of Land Act 1958 (Vic), which provides as follows:

(1) Subject to this Act no instrument until registered as in this Act shall be effectual to create, vary, extinguish or pass any estate or interest or encumbrance in on or over any land under operation of this Act, but upon registration the estate or interest or encumbrance shall be created varied extinguished or pass in the manner and subject to the covenants and conditions specified in the instrument or by this Act prescribed or declared to be implied in instruments of a like nature.

(2) Every instrument when registered shall be of the same efficacy as if under seal and shall be as valid and effectual to all intents and purposes as a deed duly executed and acknowledged or other appropriate form of document.[166]

(e) The Additional Rules were in the nature of a restrictive covenant attached to the individual lots, which were recorded on the folio of each of the lots.

(f) Accordingly, even if invalidly made, on registration, the interests of the units in the strata plan were 'subject to the covenants and conditions specified in the instrument',[167] and, pursuant to s 42 of the Transfer of Land Act 1958 (Vic), the registered proprietors of the lots held their interests subject to the owners corporation's interest in the registered Additional Rules akin to a restrictive covenant.

138 The respondents submitted that an invalid rule was not 'in force' as a result of being recorded on the Register for the following reasons:

(a) The appellant falsely assumed that Rule 34 created an interest in land akin to a restrictive covenant.

(b) The Transfer of Land Act 1958 (Vic) and, in particular, s 42 creates indefeasibility in respect of a registered proprietor's title. It does not give indefeasibility for an encumbrance recorded on the title.

(c) The effect of recording and registration is to make all valid covenants enforceable against the successors of the covenantor who, as registered owner, would otherwise take their title free from them.

(d) Sections 40 to 42 of the Transfer of Land Act 1958 (Vic) merely put purchasers on notice of an encumbrance on the registered proprietor's otherwise indefeasible title insofar as such an encumbrance is otherwise valid and effective to create a proprietary interest.

139 In my opinion, the appellant's contention - that the recording by the Registrar of an amendment to the rules accords the rules indefeasibility, overcoming invalidity, as an encumbrance on the title of the lots - misconceives the scheme of the Transfer of Land Act 1958 (Vic). Section 42(1) of that Act confers indefeasibility on the registered proprietor of land 'subject to such encumbrances as are recorded on the relevant folio of the Register absolutely free of all other encumbrances whatsoever, except' specified exceptions. The effect of the recording of an encumbrance on the title is that a purchaser of the land is prevented from relying upon these indefeasibility provisions to defeat the encumbrance so notified on the Certificate of Title.[168]

140 Section 88(3) Transfer of Land Act 1958 (Vic) provides as follows:

Apart from the operation of Part III a recording in the Register of any such restrictive covenant charge easement or right shall not give it any greater operation than it has under the instrument or Act creating it.

141 In Fitt v Luxury Developments Pty Ltd,[169] Gillard J considered the effect of this provision on an argument that the recording of a restrictive covenant on a title resolved any question of validity. His Honour rejected the contention, concluding as follows:

It is clear, in my opinion, that the recording of a restrictive covenant on the folio of the land subject to the burden is no more than notification of the claim that there is a restrictive covenant burdening the land, and the recording does not in any way establish or effect the validity or otherwise of the restrictive covenant.

What the recording does is to give notice to anybody who wishes to acquire an interest in the burdened land that a claim is made by another that there is a valid restrictive covenant affecting the land. But it is viewed as a claim only and the recording on the folio in the Register for Land does not establish its validity.[170]

142 In Prowse v Johnstone,[171] Ginnane J considered an argument that the Transfer of Land Act 1958 (Vic), and in particular ss 40 to 43 and 88(3) of that Act, was conclusive evidence of title and therefore, absent fraud, the terms of a registered instrument (in that case a registered covenant) were binding on the registered proprietor.[172] Ginnane J rejected the argument stating:

I do not accept the defendants' indefeasibility argument. I do not consider that s 88(3) of the Transfer of Land Act 1958 has the effect of establishing that the restrictive covenant is deemed to have been validly made. No authority was cited in support of that proposition and it is contrary to the express statement of Gillard J in Fitt's Case.[173]

143 In my opinion, a rule of a body corporate can be in no stronger position than a registered covenant. The proposition that registration resolves the invalidity of all rules made in excess of power is an extreme construction which, in my opinion, is not consistent with the objects of the Subdivision Act 1988 (Vic) and the regulations made thereunder.

144 Accordingly, I do not consider that Rule 34 was 'in force' at the time of the commencement of the Owners Corporations Act 2006 (Vic) nor that it was somehow validated by clause 5 of the transitional provisions of that Act.

Would Rule 34 be valid under the Owners Corporations Act 2006 (Vic)?

145 The above findings that Rule 34 was not validly made by the appellant under the Subdivision Act 1988 (Vic) and its regulations and was not validated by the recording of the Additional Rules or the transitional provisions of the Owners Corporations Act 2006 (Vic) is sufficient to resolve this appeal.

146 However, the VCAT Member decided that Rule 34 could not be made under the provisions of the Owners Corporations Act 2006 (Vic) and the correctness of that decision was fully argued by the parties on this appeal. Accordingly, I consider it appropriate to give consideration to the issue.

147 Section 4 of the Owners Corporations Act 2006 (Vic) (the full text of which is set out in paragraph [68] above) sets out the functions of an owners corporation, which like the functions for bodies corporate previously set out in reg 201 of the Subdivision (Body Corporate) Regulations 2001 (Vic) (the full text of which is set out in paragraph [53] above) as delegated by s 29 of the Subdivision Act 1988 (Vic), still principally focusses on the management, maintenance and insurance of the common property.

148 Section 138 of the Owners Corporations Act 2006 (Vic) (the full text of which is set out in paragraph [71] above) provides owners corporations with the power to make rules with respect to the matters set out in Schedule 1 (the relevant text of which is set out in paragraph [72] above); but further requires that a rule must be for the purpose of the control, management, administration, use or enjoyment of the common property or of a lot.

149 The appellant submitted that Rule 34 was within the ambit of the rule making power provided by s 138 of the Owners Corporations Act 2006 (Vic) for the following reasons:

(a) Section 138(1) provided that an owners corporation may make rules 'for or with respect to any matter set out in Schedule 1'. The words 'with respect to' should be read in the same way as 'in respect of' which has 'the widest possible meaning of any expression intended to convey some connection or relation between the two subject-matters to which the words refer'.[174]

(b) Rule 34 was relevantly connected with the following categories in Schedule 1 in respect of which a rule making power is given to an owners corporation:

1. Health, safety and security

1.1 Health, safety and security of lot owners, occupiers of lots and invitees.

4. Use of common property

4.1 Use of common property.

5. Lots

5.1 Change of use of lots.

5.2 External appearance of lots.

5.3 Requiring notice to the owners corporation of renovations to lots.

5.4 Times within which work on lots can be carried out.

7. Behaviour of persons

7.1 Behaviour of owners, occupiers and invitees on common property.

7.2 Noise and nuisance control.'

(c) In particular, cl 5.1 of Schedule 1 should not be limited to the mere changing of use.

150 The respondents submitted that the rule making power under the Owners Corporations Act 2006 (Vic) could not support the making of Rule 34 for the following reasons:

(a) The phrase 'with respect to' in s 138 must be read in its context and it is nothing more than a connecting phrase inviting the comparison between the sufficiency of the nexus between the head of power and the rule in question.

(b) The 'health, safety and security' power is not sufficiently connected with Rule 34 and was correctly dismissed by the VCAT Member.

(c) The power with respect to lots in cl 5 of Sch 1 and, in particular, the 'change of use of lots' did not extend to determining the permissible and impermissible uses of a lot.

(d) In summary, the respondents contended that 'where the central concern is common property and a power to make rules as to the permissible uses of a lot would interfere with basic property rights, the intention should not be attributed to Parliament to confer such a sweeping power on owners corporations in the absence of an express provision to that effect or by obvious implication from surrounding provisions'.

Review of the authorities relating to body corporate/owners corporation rule making powers

151 In Humphries v Proprietors 'Surfers Palms North' Group Titles Plan 1955,[175] the High Court held that a body corporate did not have power to enter into an agreement to pay money to a person to conduct a letting agency for the benefit of those lot owners who required the service. Pursuant to the Building Units and Group Titles Act 1980 (Qld) the body corporate was authorised to amend the proforma by-laws 'for the purpose of the control, management, administration, use or enjoyment of the lots and common property the subject of the plan'.

152 The Building Units and Group Titles Act 1980 (Qld) adopted a scheme that was similar to the New South Wales strata title legislation in that:

(a) the initial rules of the body corporate were the proforma rules but the body corporate was, pursuant to special resolution, empowered to amend, add to or repeal those by-laws 'for the purpose of the control, management, administration, use or enjoyment of the lots and common property the subject of the plan';[176] and

(b) an aggrieved lot owner was entitled to appeal to a referee, who had power to revoke an amendment or repeal of a by-law or addition of a new by-law if, having regard to the interest of all proprietors in the use and enjoyment of their lots or the common property, it should not have been effected.[177]

(a) A statutory corporation is limited, as to all its powers, by the purposes as defined in the Act of Parliament that created it.[178]

(b) The limits of the powers of a body corporate were ascertained by construing, in context, the provisions of the Act conferring the powers.[179]

(c) With respect to the provisions conferring powers under the Building Units and Group Titles Act 1980 (Qld) their Honours said:

The powers of a body corporate are confined chiefly to management and control of common property, and expenditure of the funds of the body corporate on the provision of services for individual proprietors is not sanctioned merely because the services are available to all proprietors who wish to use them. A power to provide such services is not incidental to the body corporate's statutory duties or powers.[180]

154 Their Honours concluded that the 'proforma by-laws' did not authorise the body corporate to provide services to individual lots and noted that, to the extent that the body corporate's authority to provide a garbage disposal service for individual lots constituted an exception, it was 'explicable by the common interest of all proprietors and occupiers in the removal of garbage from any part of the premises'.[181]

155 In Sydney Diagnostic Services Pty Ltd v Hamlena Pty Ltd,[182] the New South Wales Court of Appeal considered the validity of a by-law made by a body corporate under the Strata Titles Act 1973 (NSW), the relevant part of which provided 'A proprietor or occupier of a lot ... shall not upon the parcel (other than Lots 5 and 6) conduct the medical practice of pathology'.

156 Meagher JA[183] held that the by-law was made 'for the purpose of the control, management, administration, USE or enjoyment of the lots or the lots and common property the subject of the strata scheme concerned'[184] and therefore was within the power conferred by s 58(2) of the Strata Titles Act 1973 (NSW). Meagher JA gave the following reasons:

(a) The prima facie meaning of s 58(2) gave bodies corporate the power to pass by-laws regulating 'the use' of each lot in a strata plan and it must have been apparent to Parliament that the power 'extended to regulating what trades, avocations and activities could and could not be conducted on each lot'.[186]

(b) Lot owners would be protected from an unjust exercise of power on the basis that:

(i) a purported exercise of power is a nullity if it can be demonstrated to have been activated by an improper purpose; and

(ii) there was a right of appeal to a Strata Title Board that had the power to revoke by-laws under s 120.

157 Although this decision may well provide authority for the proposition that Rule 34 would be within the ambit of s 138(3) of the Owners Corporations Act 2006 (Vic) which is in substantially the same terms as s 52(2) of the Strata Titles Act 1973 (NSW), it also demonstrates the difference between the powers conferred on owners corporations/bodies corporate in the strata title schemes adopted in New South Wales and Victoria. As discussed above, I consider that the principal relevant differences are as follows:

(a) The New South Wales legislation enables by-laws to be made 'for the purpose of the control, management, administration, use or enjoyment' of the lots or common property and provides an avenue of appeal to aggrieved lot holders.

(b) The Victorian legislation enables rules to be made with respect to the matters set out in Schedule 1 and provides for an overriding requirement that the rule must be 'for the purpose of the control, management, administration, use or enjoyment' of the common property or of a lot.

158 Accordingly, given these differences between the Victorian and New South Wales legislation, this decision does not assist the determination of whether Rule 34 was made with respect to any matter set out in Schedule 1 of the Owners Corporations Act 2006 (Vic).

159 In White v Betalli,[187] the New South Wales Court of Appeal considered the validity of a by-law on a two-lot strata subdivision that provided Lot 1 with the right to store small watercraft within a specified area of Lot 2. Section 43(1) of the Strata Schemes Management Act 1996 (NSW) relevantly provided that by-laws could be made in relation to 'safety and security measures' and 'matters appropriate to the type of strata scheme concerned'. However, sub-s 43(2) provided that sub-s 43(1) did not limit the matters for which by-laws may be made.

160 Santow JA[188] found that the by-law was within the scope of the power conferred by the section because it did constitute a matter 'appropriate to the type of strata scheme concerned'.[189]

161 McColl JA, in dissent, reviewed the legislative history of strata legislation in New South Wales and noted that the model by-laws for residential schemes set out in Schedule 1 of the Strata Schemes Management Regulations 1997 (NSW) principally related to 'behavioural matters such as noise, parking of vehicles, appearance of lots'.[190] Her Honour stated, with respect to the historical context in which the relevant legislation was enacted:

Lot proprietors were to have title to their lot, whether it be the cubic space within the building to which the strata scheme related or any land which formed part of their lot. By-laws were to be used to regulate the management of the building in the common interest of the proprietors. These core constructs have been continued as strata title legislation has evolved.[191]

162 Her Honour opined that nothing in the relevant Act or the history of strata title legislation supported the conclusion that by-law making powers would permit a by-law which effectively conferred exclusive use and enjoyment of part of one lot onto the owner of another.[192] Her Honour also relied upon the principle that 'a statutory power will not be interpreted as permitting interference with vested proprietary rights unless that intention is made manifest by express statement or necessary implication'.[193]

163 Although the case deals with a by-law intruding on the proprietary rights of a lot owner as in the present case, the broader powers to make by-laws under the New South Wales legislation renders the decision of little assistance in considering the rule making powers of owners corporations under the Victorian legislation.[194] However, I do consider that the review of the strata title legislation by McColl JA, the identification of the purpose of the legislation and the reference to the principle of legality are of more general application.

164 In Casuarina Rec Club Pty Ltd v The Owners-Strata Plan No 77971,[195] the New South Wales Court of Appeal considered the validity of an agreement entered into by the owners corporation of a holiday resort strata scheme with the operator of a recreation centre giving rights to owners of lots and guests and invitees of such owners to use the centre's facilities. The owners corporation had entered into the agreement pursuant to a specific by-law which provided that it had the power and function to enter into the particular agreement to provide access to the centre's facilities for residents. There was also a further relevant by-law giving power to enter into agreements as necessary including relating to the residents' use of the facilities.

165 The by-laws were two of the general by-laws lodged with the strata plan. As such, the by-laws did not need to comply with s 47 of the Strata Schemes Management Act 1996 (NSW) which only regulated additions, amendments and repeals of by-laws. As a result, Macfarlan JA said that for an original by-law to be valid 'there must clearly be a nexus between the subject matter of the by-law and the use or occupation of the subject property. I do not consider that it is possible to formulate more precise rules that will determine whether that nexus exists in any particular case'.[196]

166 Young JA noted that the original by-laws may well be more extensive than those that can be made pursuant to the power to alter by-laws under s 47,[197] and considered that it would be rare that an original by-law would be held to be invalid.[198]

167 His Honour concluded that the owners corporation's functions were not limited to the site itself and it could include some by-laws relating to the owners or occupiers of units on the site.[199] Accordingly, the by-laws were sufficiently connected with the functions of the owners corporation.[200]

168 This decision highlights a further significant difference between the strata title legislation in Victoria and New South Wales. In New South Wales, the original by-laws, which are required by s 41 of the Strata Schemes Management Act 1996 (NSW) to be lodged with a strata plan, are not restricted by the requirement in s 47 to being 'for the purpose of the control, management, administration, use or enjoyment of the lots or common property', because s 47 only limits alterations to the by-laws. The original by-laws are therefore only expressly limited by ss 49 and 50.[201]

169 Pursuant to s 27(2C) of the Subdivision Act 1988 (Vic), rules accompanying the plan for registration were to 'be taken to be rules made by the body corporate'. As I stated above, in my opinion, these words did not permit such rules to be broader than those that could be validly made by special resolution of the body corporate. No such words of limitation were included in s 41 of the Strata Schemes Management Act 1996 (NSW) which simply provides, with respect to original by-laws, that 'the by-laws in force for a strata scheme are the by-laws adopted by or lodged with the strata plan'.

170 Accordingly, the New South Wales Court of Appeal's consideration of the by-laws lodged with the strata plan pursuant to the Strata Schemes Management Act 1996 (NSW) provides limited assistance with respect to the limits on rules that can be made under the Victorian legislation.

171 In Lawandi v Owners Corporation 21842D,[202] Judge Davis, Vice President of VCAT, considered the validity of a rule passed by a special resolution of an owners corporation as follows:

A lot owner or occupier must not use the lot, or permit it to be used, for residential or other accommodation, whether short term, long term or otherwise.

The lots in the strata subdivision, until that time, had been used for commercial purposes.

172 Her Honour concluded that the rule was invalid as it was outside the subject matter set out in Schedule 1 to which owners corporations were confined,[203] for the following reasons:

(a) The phrase 'for or with respect to' must be interpreted within its context which in that case was 'the delineation of the matters about which the [owners corporation] may make rules, in an Act that purports to provide for the power of [owners corporations] in order that they may fulfil their functions under the Act'.[204]

(b) In Schedule 1,[205] cl 4 provides for rules to be made with respect to 'use of' common property and the clause is entitled 'Use of common property'.[206] The title of cl 5, which relates to lots, is simply entitled 'Lots'. The absence of the words 'use of' in the title to cl 5 indicates that the power to make rules with respect to common property is intended to be broader than with respect to the power to make rules with respect to lots. This was said to be consistent with the nature and purpose of the creation of owners corporations and the portion of the Explanatory Memorandum to the Bill dealing with such nature and purpose, which only talks of providing greater functions etc to manage common property.[207]

(c) Clause 5 enables owners corporations to make rules regulating the external appearance of lots, requiring notice of renovations to lots and the times within which work on lots can be carried out. Accordingly, cl 5.1 is to be construed as a power to make rules regulating the activities referred to and, similarly, with respect to 'change of use of lots'.[208]

(d) The legislation does not include express words permitting an owners corporation to make rules prohibiting a lot from changing its use.[209]

173 Accordingly, her Honour concluded that the power with respect to 'change of use of lots' should be construed as a power to regulate rather than prohibit the change of the use of a lot.[210]

174 To determine the question of whether Rule 34 was within the scope of what the Parliament intended when enacting the Owners Corporations Act 2006 (Vic), it is necessary to consider the same questions as those referred to in paragraph [108] being:

(a) What was the Statutory Purpose of the relevant provisions in the legislation?

(b) What is the character of Rule 34?

(c) Is there a sufficiently direct and substantial connection between the Statutory Purpose and the likely operation of Rule 34?

What was the Statutory Purpose of the relevant provisions in the legislation?

175 To determine the Statutory Purpose of the Owners Corporations Act 2006 (Vic), I have again had regard to the following:

(a) The main purposes of the Act include 'to provide for the management of powers and functions of owners corporations'.[211] As noted above in paragraph [67], the Explanatory Memorandum stated that: 'The Bill provides greater duties, functions, powers and responsibilities for owners corporations to manage common property than are provided by the current Subdivision (Body Corporate) Regulations 2001 (Vic).'

(b) Section 4 of the Act sets out the functions of owners corporations which are, for practical purposes relevantly the same as those set out under reg 201 of the Subdivision (Body Corporate) Regulations 2001 (Vic) as summarised in paragraph [109(b)]. Section 6 provides for the powers of an owners corporation which, although less specific powers are set out, in substance provides an owners corporation with the powers which are necessary to enable it to perform its functions, just as reg 202 of the Subdivision (Body Corporate) Regulations 2001 (Vic) previously did in respect of bodies corporate.

(c) The balance of Part 2 of the Act provides some powers to owners corporations with respect to the provision of services, the bringing of legal proceedings and the common property. Part 3 deals with financial and asset management together with insurance. Parts 4, 5 and 6 deal with governance and management of an owners corporation including the rules of an owners corporation.

(d) Section 138(1) gives an owners corporation the power to make rules for and with respect to the matters set out in Schedule 1. As set out in paragraph [72] above, Schedule 1 includes powers that relate to governance, organisation, management, administration, the use of common property and conduct matters.

176 As referred to in paragraph [117], the purpose of Rule 34 was to address identified conduct issues.

Is there a sufficiently direct and substantial connection between the Statutory Purpose and the likely operation of Rule 34?

177 The appellant contended that Rule 34 was directly and substantially connected with:

(a) the health, safety and security of lot owners, occupiers of lots and invitees;[212]

(c) the behaviour of owners, occupiers and invitees on common property;[214] and

(d) noise and other nuisance control.[215]

178 In my opinion, the prohibition of businesses generally and specifically businesses related to Short-Term Letting exceeded the scope of what was intended by the Parliament in enacting the Owners Corporations Act 2006 (Vic) principally for similar reasons to those set out with respect to the Subdivision (Body Corporate) Regulations 2001 (Vic) in paragraphs [111]-[115].

179 With respect to the sufficiency of the connection to the categories of power relied upon by the appellant, I make the following further comments.

180 The evidence did not disclose a substantial connection between Rule 34 and the health, safety and security of the lot owners. In fact, as discussed in paragraphs [8]-[11] above, the evidence established that the City of Melbourne and the respondents had taken action pursuant to consent orders in the Building Appeals Board apparently dealing with the City of Melbourne's Municipal Building Surveyor's concerns about compliance with the permitted uses of the lots within the terms of their occupancy permits within a building which the Building Code of Australia classified as residential Class 2. Any evidence that the character of Rule 34 was to address some shortfall in those requirements was tenuous at best.

181 In my opinion, a reading of cls 5.1 to 5.4 of Schedule 1 does not support the proposition that the Parliament intended to confer on owners corporations a power to prohibit uses otherwise permitted under the applicable local/municipal planning scheme and other planning and regulatory enactments.

182 The absence of any power to regulate the 'use of' lots in cl 5, as opposed to specific power to regulate the use of common property in cl 4, militates against the contention that Parliament intended to confer a power to regulate (much less prohibit) specified uses of lots. In my opinion, it makes good sense that the Parliament would have conferred on the owners corporation greater powers over the use of the common property, of which it was the owner, than over the lots owned by the individual proprietors. Such a scheme of distribution of power between the relevant stakeholders is perfectly consistent with an intention to respect the vested proprietary rights of the lot owners.

183 If the Parliament intended cl 5.1 to allow the owners corporation to prohibit the change of use of lots, it is far from clear how such a power would be applied in a case such as this where the change of the use of the lot for Short-Term Letting occurred many years ago. If this were so, would it entitle the owners corporation to compel a change back? Further, there would be little sense in an owners corporation being able to prohibit a change to a use if it was unable to regulate other lots which had been used for the same purpose from the outset.

184 The appellant's proposition does not gain any support from reference to the model rules set out in Schedule 2 to the Owners Corporations Regulations 2007 (Vic), which provide with respect to change of use of lots:

4.1 Change of use of lots

An owner or occupier of a lot must give written notification to the owners corporation if the owner or occupier changes the existing use of the lot in a way that will affect the insurance premiums for the owners corporation.

Example

If the change of use results in a hazardous activity being carried out on the lot, or results in a lot being used for commercial or industrial purposes rather than residential purposes.

185 Generally a regulation made under an Act cannot be used for the purposes of construing the Act.[216] However, one is entitled to look at the regulations in order to understand the nature of a scheme if the legislative scheme is comprised of both an Act and the regulations made under it.[217] The Owners Corporations Act 2006 (Vic) and the Owners Corporations Regulations 2007 (Vic) both came into operation on 31 December 2007. Section 139 of the Act provided that the regulations may prescribe model rules and that such rules would apply to owners corporations in the circumstances there set out. A review of the model rules[218] demonstrates that they closely follow the powers to make rules as set out in Schedule 1 to the Act. Accordingly, I consider that the legislative scheme is comprised of both the Act and the regulations and that the Court is entitled to have reference to the regulations for the purpose of understanding the parliamentary intention with respect to the nature of the scheme. This is consistent with Nettle JA's approach in O'Connell v Nixon.[219]

186 It can be readily accepted that the character of Rule 34 was to prevent perceived problems with the behaviour of short-term tenants. However, I do not consider that the demonstrated concern about behaviour and noise is sufficiently directly or substantially connected to a general ban on Short-Term Letting on all lots.

187 Reference to the model rules with respect to behaviour of owners and noise gives no support to the proposition that the Parliament intended that the power to regulate these activities would extend to a general ban on uses, particularly in cases when the impugned behaviour and noise is not a necessary incident of the activity so banned.

188 Accordingly, I consider that Rule 34 is not sufficiently directly and substantially connected with the statutory purposes of the powers conferred by Schedule 1 of the Owners Corporations Act 2006 (Vic) to be a real exercise of the rule making power in that Act.

189 The respondents contended, in the alternative, that Rule 34 is inconsistent with their rights to use the property for Short-Term Letting conferred by the Planning and Environment Act 1987 (Vic) and the occupancy permits allowing the lots to be occupied as 'Class 2' buildings under the Building Act 1993 (Vic). Given my above conclusions it is not necessary to deal with this issue. However, as it was argued by the parties, I will say the following.

190 Section 140 of the Owners Corporations Act 2006 (Vic) provides as follows:

140 Rules to be of no effect if inconsistent with law

A rule of an owners corporation is of no effect if it -

(a) unfairly discriminates against a lot owner or an occupier of a lot; or

(b) is inconsistent with or limits a right or avoids an obligation under -

(i) this Act; or

(ii) the Subdivision Act 1988; or

(iii) the regulations under this Act; or

(iv) the regulations under the Subdivision Act 1988; or

(v) any other Act or regulation.

191 It can be accepted that compliance with the Planning and Environment Act 1987 (Vic) and the Building Act 1993 (Vic) allows the respondents to use their lots for Short-Term Letting. However, the respondents did not refer me to any provision in those or any other Act which purported to grant them a 'right' to use their lots for such a purpose.

192 At common law, the respondents are free to behave and use their lots in any way which is not prohibited by the rules of common law or legislation.[220] The fact that the respondents are not prohibited by the planning or building regimes from using their lots for the purpose of Short-Term Letting does not constitute them having a right under such legislation.[221] In my opinion, the right arises at common law because 'everybody is free to do anything, subject only to the provisions of the law'.[222]

193 Accordingly, I do not consider that Rule 34 was invalid on the basis of inconsistency with any Act or regulation.

1 Health, safety and security

1.1 Health, safety and security of lot owners, occupiers of lots and others

A lot owner or occupier must not use the lot, or permit it to be used, so as to cause a hazard to the health, safety and security of an owner, occupier, or user of another lot.

1.2 Storage of flammable liquids and other dangerous substances and materials

(1) Except with the approval in writing of the Owners Corporation, an owner or occupier of a lot must not use or store on the lot or on the common property any flammable chemical, liquid or gas or other flammable material.

(2) This rule does not apply to -

(a) chemicals, liquids, gases or other material used or intended to be used for domestic purposes; or

(b) any chemical, liquid, gas or other material in a fuel tank of a motor vehicle or internal combustion engine.

1.3 Waste disposal

An owner or occupier must ensure that the disposal of garbage or waste does not adversely affect the health, hygiene or comfort of the occupiers or users of other lots.

2 Management and administration

2.1 Metering of services and apportionment of costs of services

(1) The Owners Corporation must not seek payment or reimbursement for a cost or charge from a lot owner or occupier that is more than the amount that the supplier would have charged the lot owner or occupier for the same goods or services.

(2) If a supplier has issued an account to the Owners Corporation, the Owners Corporation cannot recover from the lot owner or occupier an amount which includes any amount that is able to be claimed as a concession or rebate by or on behalf of the lot owner or occupier from the relevant supplier.

(3) Subrule (2) does not apply if the concession or rebate -

(a) must be claimed by the lot owner or occupier and the Owners Corporation has given the lot owner or occupier an opportunity to claim it and the lot owner or occupier has not done so by the payment date set by the relevant supplier; or

(b) is paid directly to the lot owner or occupier as a refund.

3 Use of common property

3.1 Use of common property

(1) An owner or occupier of a lot must not obstruct the lawful use and enjoyment of the common property by any other person entitled to use the common property.

(2) An owner or occupier of a lot must not, without the written approval of the Owners Corporation, use for his or her own purposes as a garden any portion of the common property.

(3) An approval under subrule (2) may state a period for which the approval is granted.

(4) If the Owners Corporation has resolved that an animal is a danger or is causing a nuisance to the common property, it must give reasonable notice of this resolution to the owner or occupier who is keeping the animal.

(5) An owner or occupier of a lot who is keeping an animal that is the subject of a notice under subrule (4) must remove that animal.

(6) Subrules (4) and (5) do not apply to an animal that assists a person with an impairment or disability.

3.2 Vehicles and parking on common property

An owner or occupier of a lot must not, unless in the case of an emergency, park or leave a motor vehicle or other vehicle or permit a motor vehicle or other vehicle -

(a) to be parked or left in parking spaces situated on common property and allocated for other lots; or

(b) on the common property so as to obstruct a driveway, pathway, entrance or exit to a lot; or

(c) in any place other than a parking area situated on common property specified for that purpose by the Owners Corporation.

3.3 Damage to common property

(1) An owner or occupier of a lot must not damage or alter the common property without the written approval of the Owners Corporation.

(2) An owner or occupier of a lot must not damage or alter a structure that forms part of the common property without the written approval of the Owners Corporation.

(3) An approval under subrule (1) or (2) may state a period for which the approval is granted, and may specify the works and conditions to which the approval is subject.

(4) An owner or person authorised by an owner may install a locking or safety device to protect the lot against intruders, or a screen or barrier to prevent entry of animals or insects, if the device, screen or barrier is soundly built and is consistent with the colour, style and materials of the building.

(5) The owner or person referred to in subrule (4) must keep any device, screen or barrier installed in good order and repair.

4 Lots

4.1 Change of use of lots

An owner or occupier of a lot must give written notification to the Owners Corporation if the owner or occupier changes the existing use of the lot in a way that will affect the insurance premiums for the Owners Corporation.

Example

If the change of use results in a hazardous activity being carried out on the lot, or results in the lot being used for commercial or industrial purposes rather than residential purposes.

5 Behaviour of persons

5.1 Behaviour of owners, occupiers and invitees on common property

An owner or occupier of a lot must take all reasonable steps to ensure that guests of the owner or occupier do not behave in a manner likely to unreasonably interfere with the peaceful enjoyment of any other person entitled to use the common property.

5.2 Noise and other nuisance control

(1) An owner or occupier of a lot, or a guest of an owner or occupier, must not unreasonably create any noise likely to interfere with the peaceful enjoyment of any other person entitled to use the common property.

(2) Subrule (1) does not apply to the making of a noise if the Owners Corporation has given written permission for the noise to be made.

6 Dispute resolution

(1) The grievance procedure set out in this rule applies to disputes involving a lot owner, manager, or an occupier or the Owners Corporation.

(2) The party making the complaint must prepare a written statement in the approved form.

(3) If there is a grievance committee of the Owners Corporation, it must be notified of the dispute by the complainant.

(4) If there is no grievance committee, the Owners Corporation must be notified of any dispute by the complainant, regardless of whether the Owners Corporation is an immediate party to the dispute.

(5) The parties to the dispute must meet and discuss the matter in dispute, along with either the grievance committee or the Owners Corporation, within 14 working days after the dispute comes to the attention of all the parties.

(6) A party to the dispute may appoint a person to act or appear on his or her behalf at the meeting.

(7) If the dispute is not resolved, the grievance committee or Owners Corporation must notify each party of his or her right to take further action under Part 10 of the Owners Corporations Act 2006.

(8) This process is separate from and does not limit any further action under Part 10 of the Owners Corporations Act 2006.

[1] From 31 December 2007, every body corporate was deemed to be an owners corporation pursuant to the Owners Corporations Act 2006 (Vic) sch 3 cl 3.

[2] Victoria, Parliamentary Debates, Legislative Assembly, 20 July 2006, 2487 (Rob Hulls, Attorney General).

[3] Industry Information, Strata Community Australia (Vic)

[4] Salter v Building Appeals Board (2013) 200 LGERA 120.

[5] Genco v Salter [2013] VSCA 365 [39] (Nettle JA), [139]-[142] (Osborn JA).

[6] Owners Corporation PS501391P v Balcombe (Owners Corporations) (Unreported, VCAT, Member Rowland, 29 June 2015) [4] ('VCAT Reasons').

[9] [1933] HCA 56; (1933) 49 CLR 142, 155.

[10] [2013] HCA 3; (2013) 249 CLR 1, 57 [117].

[11] [1994] HCA 21; (1994) 179 CLR 597, 601.

[14] Ibid [48] referring to Swan Hill Corporation v Bradbury [1937] HCA 15; (1937) 56 CLR 746, 762.

[18] Doe d Freeland v Burt [1787] EngR 99; (1787) 99 ER 1330.

[19] Reasons are discussed in the preface to the first edition of Edward George, The Sale of Flats (Sweet and Maxwell, 2nd ed, 1959) vii-ix.

[20] CCH, Victorian Conveyancing Law and Practice, Historical introduction to the development of subdivision and strata title, vol 2 [29-003]; Adrian Bradbrook, Scott Grattan, Susan MacCallum and Anthony Moore (eds), Australian Property Law (Lawbook Co, 5th ed, 2011) 609-617.

[21] White v Betalli [2007] NSWCA 243; (2007) 71 NSWLR 381, 405 [123] (McColl JA).

[22] The difference between stratum and strata titles is referred to in paragraph [33] below.

[23] The report of the subcommittee of the Council was published in (1964) LIJ 424.

[24] Victoria, Parliamentary Debates, Legislative Assembly, 2 March 1967, 3272 (Mr Vernon Wilcox, Minister for Labour and Industry).

[26] Alex Ilkin, NSW Strata and Community Schemes Management and the Law (Lawbook Co, 4th ed, 2007) 323. In White v Betalli [2007] NSWCA 243; (2007) 71 NSWLR 381, 399 [94] McColl JA referred to rules relating to matters such as noise, parking of vehicles, appearance of lots as by-laws which dealt with 'behavioural' matters.

[27] Strata Titles Act 1967 (Vic) s 14(2).

[37] Ibid s 24(5). This provision limiting the power to amend the by-laws was a restriction which had not been included in the Conveyancing (Strata Titles) Act 1961 (NSW).

[39] Conveyancing (Strata Titles) Act 1961 (NSW) cls 1-3.

[42] The Strata Titles Act 1973 (NSW) has also been known as the Strata Titles (Freehold Development) Act 1973 (NSW). Its current form is named the Strata Schemes (Freehold Development) Act 1973 (NSW).

[43] Victoria, Parliamentary Debates, Legislative Council, 30 October 1974, 1694 (Mr Alan Hunt, Minister for Local Government).

[44] Section 44(1).

[45] Victoria, Parliamentary Debates, Legislative Assembly, 13 April 1987, 1438 (Mr Frank Wilkes, Minister for Housing).

[47] Victoria, Ministry for Planning and Development, The New Subdivision Act - A User's Guide (October 1989) 2.

[48] Subdivision Act 1988 (Vic) s 1.

[49] Ibid ss 27(1), 28(1)(a).

[50] Ibid ss 27C, 27E.

[51] Subdivision (Body Corporate) Regulations 1989 (Vic) reg 102.

[54] Previously known as both the Strata Titles Act 1973 (NSW) and the Strata Titles (Freehold Development) Act 1973 (NSW).

[55] Strata Schemes Management Act 1996 (NSW) Dictionary.

[56] Explanatory Memorandum, Owners Corporations Bill 2006 (Vic) 1.

[57] Owners Corporations Act 2006 (Vic) s 211 replaced s 27(2C) with s 27E, which is substantially the same.

[58] Owners Corporations Regulations 2007 (Vic) reg 3.

[59] Owners Corporations Act 2006 (Vic) s 2(2).

[60] See Strata Schemes (Freehold Development) Act 1973 (NSW) s 8; Strata Schemes (Leasehold Development) Act 1986 (NSW) s 7.

[61] Owners Corporations Act 2006 (Vic) s 138.

[62] Strata Schemes Management Act 1996 (NSW) s 47.

[63] Owners Corporations Act 2006 (Vic) s 139.

[64] See, for example, s 49 of the Owners Corporations Act 2006 (Vic) with respect to rules that unfairly discriminate or are inconsistent with Acts or regulations.

[65] Owners Corporations Act 2006 (Vic) s 138.

[66] See, for example, s 43 of the Strata Schemes Management Act 1996 (NSW) with respect to a rule inconsistent with an Act or law and s 49 with respect to rules restricting dealing with a lot or restricting children or guide dogs.

[67] Strata Schemes Management Act 1996 (NSW) s 47.

[68] As to whether Short-Term Letting constitutes a lease, see Swan v Uecker [2016] VSC 313 (Croft J).

[69] Alex Ilkin, NSW Strata and Community Schemes Management and the Law (Thomson Lawbook Co, 4th ed, 2007) 363.

[70] Strata Schemes Management Act 1996 (NSW) s 50.

[71] Ibid s 157.

[72] Minister for Resources v Dover Fisheries Pty Ltd [1993] FCA 366; (1993) 43 FCR 565, 577 (Gummow J) (citation omitted); approved in A-G (SA) v Adelaide City Corporation [2013] HCA 3; (2013) 249 CLR 1, 57 [118] (Hayne J).

[73] Williams v Melbourne Corporation [1933] HCA 56; (1933) 49 CLR 142, 155 (Dixon J).

[74] South Australia v Tanner [1989] HCA 3; (1989) 166 CLR 161, 168 (Wilson, Dawson, Toohey and Gaudron JJ).

[75] A-G (SA) v Adelaide City Corporation [2013] HCA 3; (2013) 249 CLR 1, 59 [122] (Hayne J); South Australia v Tanner [1989] HCA 3; (1989) 166 CLR 161, 175-176, 178-179 (Brennan J).

[76] Williams v Melbourne Corporation [1933] HCA 56; (1933) 49 CLR 142, 155 (Dixon J).

[77] Ibid adopted in South Australia v Tanner [1989] HCA 3; (1989) 166 CLR 161, 164 (Wilson, Dawson, Toohey and Gaudron JJ).

[78] A-G (SA) v Adelaide City Corporation [2013] HCA 3; (2013) 249 CLR 1, 29 [38] (French CJ); Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492, 505 (Dixon J).

[79] A-G (SA) v Adelaide City Corporation [2013] HCA 3; (2013) 249 CLR 1, 59 [122] (Hayne J); South Australia v Tanner [1989] HCA 3; (1989) 166 CLR 161, 178 (Brennan J).

[80] Williams v Melbourne Corporation [1933] HCA 56; (1933) 49 CLR 142, 156 (Dixon J).

[81] South Australia v Tanner [1989] HCA 3; (1989) 166 CLR 161, 165 (Wilson, Dawson, Toohey and Gaudron JJ).

[82] Ibid (Wilson, Dawson, Toohey and Gaudron JJ).

[83] Williams v Melbourne Corporation [1933] HCA 56; (1933) 49 CLR 142, 155 (Dixon J); South Australia v Tanner [1989] HCA 3; (1989) 166 CLR 161, 168 (Wilson, Dawson, Toohey and Gaudron JJ).

[84] Williams v Melbourne Corporation [1933] HCA 56; (1933) 49 CLR 142, 155 (Dixon J).

[85] A-G (SA) v Adelaide City Corporation [2013] HCA 3; (2013) 249 CLR 1, 59 [123] (Hayne J).

[86] South Australia v Tanner [1989] HCA 3; (1989) 166 CLR 161, 168 (Wilson, Dawson, Toohey and Gaudron JJ).

[87] A-G (SA)) v Adelaide City Corporation [2013] HCA 3; (2013) 249 CLR 1, 59 [123] (Hayne J).

[89] Clements v Ball [1953] HCA 61; (1953) 88 CLR 572, 581 (Fullagar J) approved in A-G (SA) v Adelaide City Corporation [2013] HCA 3; (2013) 249 CLR 1, 57 [117] (Hayne J).

[90] A-G (SA) v Adelaide City Corporation [2013] HCA 3; (2013) 249 CLR 1, 57 [118] (Hayne J).

[91] South Australia v Tanner [1989] HCA 3; (1989) 166 CLR 161, 181 (Brennan J).

[92] [1993] FCA 366; (1993) 43 FCR 565, 578.

[93] Approved in A-G (SA) v Adelaide City Corporation [2013] HCA 3; (2013) 249 CLR 1, 36 [53] (French CJ).

[94] [1989] HCA 3; (1989) 166 CLR 161.

[96] Wilson, Dawson, Toohey and Gaudron JJ.

[97] South Australia v Tanner [1989] HCA 3; (1989) 166 CLR 161, 164-165.

[103] O'Connell v Nixon [2007] VSCA 131; (2007) 16 VR 440, 451 [41] (Nettle JA); Shanahan v Scott [1957] HCA 4; (1957) 96 CLR 245, 253.

[104] Swan Hill Corporation v Bradbury [1937] HCA 15; (1937) 56 CLR 746, 763 (Dixon J).

[105] Paull v Munday [1903] ArgusLawRp 108; (1976) 9 ALR 245, 252 (Gibbs J).

[106] Swan Hill Corporation v Bradbury [1937] HCA 15; (1937) 56 CLR 746, 762 (Dixon J).

[107] O'Connell v Nixon [2007] VSCA 131; (2007) 16 VR 440, 451 [42] (Nettle JA).

[108] [2013] HCA 3; (2013) 249 CLR 1 (French CJ, Hayne, Crennan, Kiefel and Bell JJ, Heydon J dissenting).

[110] Subdivision (Body Corporate) Regulations 2001 (Vic) reg 202(1)(h).

[113] [1937] HCA 15; (1937) 56 CLR 746, 762 (Dixon J).

[114] Rule 34 in fact purported to restrain more than the conduct of the business of Short-Term Letting. However, the VCAT Reasons and the submissions of both parties were directed only to whether the appellant's powers, as an owners corporation, extended to prohibiting Short-Term Letting. Accordingly, I propose to deal with the validity of Rule 34 on that basis.

[115] Subdivision (Body Corporate) Regulations 2001 (Vic) reg 101(a).

[116] Set out in full in paragraph [53] above.

[117] Subdivision (Body Corporate) Regulations 2001 (Vic) reg 201(a)(i).

[124] Victoria, Parliamentary Debates, Legislative Assembly, 13 October 1987, 1438 (Mr Frank Wilkes, Minister for Housing).

[126] See Standard Rules (c), (d) and (e) contained in Form 1 in Schedule 1 to the Subdivision (Body Corporate) Regulations 2001 (Vic).

[127] Subdivision (Body Corporate) Regulations 2001 (Vic) reg 219.

[128] Regulation 220(2) only provides for alteration of rules made under reg 220(1) which are 'in addition to' the Standard Rules.

[129] Subdivision (Body Corporate) Regulations 2001 (Vic) regs 201(e), 202(1)(h).

[130] See, for example, the Public Health and Wellbeing Act 2008 (Vic) pt 6.

[132] [2011] NSWCA 159; (2011) 80 NSWLR 711, 715 [26].

[133] South Australia v Tanner [1989] HCA 3; (1989) 166 CLR 161, 179 (Brennan J).

[134] [1959] HCA 11; (1959) 102 CLR 280, 292.

[136] South Australia v Tanner [1989] HCA 3; (1989) 166 CLR 161, 179 (Brennan J) citing McEldowney v Forde [1971] AC 632, 661 (Lord Diplock).

[137] South Australia v Tanner [1989] HCA 3; (1989) 166 CLR 161, 168 (Wilson, Dawson, Toohey and Gaudron JJ); Australian Communist Party v Commonwealth [1951] HCA 5; (1951) 83 CLR 1, 202 (Dixon J).

[138] South Australia v Tanner [1989] HCA 3; (1989) 166 CLR 161, 165 (Wilson, Dawson, Toohey and Gaudron JJ),

[140] A-G (SA) v Adelaide City Corporation [2013] HCA 3; (2013) 249 CLR 1, 42 [65] (French CJ).

[141] Nationwide News Pty Ltd v Wills [1992] HCA 46; (1992) 177 CLR 1, 30-31 (Mason CJ).

[142] South Australia v Tanner [1989] HCA 3; (1989) 166 CLR 161, 165 (Wilson, Dawson, Toohey and Gaudron JJ).

[143] Williams v Melbourne Corporation [1933] HCA 56; (1933) 49 CLR 142, 155 (Dixon J).

[144] South Australia v Tanner [1989] HCA 3; (1989) 166 CLR 161, 165 (Wilson, Dawson, Toohey and Gaudron JJ).

[145] Gerhardy v Brown [1985] HCA 11; (1985) 159 CLR 70, 142 (Brennan J).

[146] Thomas v Mowbray [2007] HCA 33; (2007) 233 CLR 307, 521 [636] (Heydon J).

[147] North Eastern Dairy Co v Dairy Industry Authority of New South Wales [1975] HCA 45; (1975) 134 CLR 559, 622 (Jacobs J).

[148] In Australian Communist Party v Commonwealth [1951] HCA 5; (1951) 83 CLR 1, 197, Dixon J took into account 'accepted tenets or doctrines of communism ... ascertained ... from serious study'.

[149] See paragraphs [110]-[112] above.

[150] White v Betalli [2007] NSWCA 243; (2007) 71 NSWLR 381, 406 [130] (McColl JA).

[151] Clissold v Perry (Minister for Public Instruction) [1904] HCA 12; (1904) 1 CLR 363, 373 (Griffiths CJ, Barton J), 378 (O'Connor J concurring); R & R Fazzalari Pty Ltd v Parramatta City Council [2009] HCA 12; (2009) 237 CLR 603, 619-620 [43]-[44] (French CJ).

[153] South Australia v Tanner [1989] HCA 3; (1989) 166 CLR 161, 181.

[154] VCAT Reasons [48] applying Swan Hill Corporation v Bradbury (1937) 56 CLR 46.

[156] See the discussion by Nettle JA (with whom Chernov and Redlich JJA agreed) in O'Connell v Nixon [2007] VSCA 131; (2007) 16 VR 440, 451 [41].

[157] [1909] HCA 67; (1909) 9 CLR 693, 705 (Barton J).

[158] [2012] VCAT 1605.

[159] Ibid [27]. See also Bapson Pty Ltd v Puyeti Pty Ltd (Unreported, Supreme Court of New South Wales, Waddell CJ in Eq, 14 May 1990) 8 with respect to the effect of registration under s 58(3) of the Strata Titles Act 1973 (NSW).

[160] Interpretation of Legislation Act 1984 (Vic) s 35.

[161] Owners Corporations Act 2006 (Vic) sch 2 cl 5 (emphasis added).

[162] Transfer of Land Act 1958 (Vic) s 97.

[163] Subdivision Act 1988 (Vic) s 27(5).

[164] Subdivision (Body Corporate) Regulations 2001 (Vic) reg 604.

[167] Transfer of Land Act 1958 (Vic) s 40(1).

[168] Anthony Moore, Scott Grattan and Lynden Griggs (eds), Australian Real Property Law (Thomson Reuters, 6th ed, 2016) 894 [18.25].

[169] [2000] VSC 258.

[170] Ibid [178]-[179] approved in Suhr v Michelmore [2013] VSC 284 [7], [14] (Pagone J).

[171] [2015] VSC 621.

[174] Trustees Executors & Agency Co Ltd v Reilly [1941] VicLawRp 22; [1941] VLR 110, 111 (Mann CJ).

[175] [1994] HCA 21; (1994) 179 CLR 597 (Brennan, Deane, Toohey, Gaudron and McHugh JJ).

[176] Building Units and Group Titles Act 1980 (Qld) s 30(2).

[177] Ibid s 88.

[178] [1994] HCA 21; (1994) 179 CLR 597, 604 citing Lord Selborne in Ashbury Railway Carriage and Iron Co v Riche (1875) LR 7 HL 653, 693.

[182] (Unreported, New South Wales Court of Appeal, Mahoney, Priestley and Meagher JJA, 19 June 1991).

[183] With whom Mahoney and Priestley JJA agreed.

[184] Sydney Diagnostic Services Pty Ltd v Hamlena Pty Ltd,185 (Unreported, New South Wales Court of Appeal, Mahoney, Priestley and Meagher JJA, 19 June 1991) 3 (capitalisation in original).

[187] [2007] NSWCA 243; (2007) 71 NSWLR 381 (Santow, McColl and Campbell JJA).

[189] White v Betalli [2007] NSWCA 243; (2007) 71 NSWLR 381, 389 [39].

[192] Ibid 405 [120]-[121], 409 [144].

[194] For a discussion on the differences see Morrish v Republic Tower Body Corporate [2004] VSC 56 [10] (Mandie J).

[195] [2011] NSWCA 159; (2011) 80 NSWLR 711 (Macfarlan, Young JJA and Handley AJA).

[201] See paragraphs [64]-[65] above.

[202] [2015] VCAT 1810.

[205] Set out in paragraph [72] above.

[207] Ibid [36]. The relevant part of the Explanatory Memorandum is set out in paragraph [67] above.

[211] Owners Corporations Act 2006 (Vic) s 1.

[216] Mine Subsistence Board v Wambo Coal Pty Ltd [2007] NSWCA 137; (2007) 154 LGERA 60, 69-70 [41] (Tobias JA with whom Hodgson and Santow JJA agreed).

[217] O'Connell v Nixon [2007] VSCA 131; (2007) 16 VR 440, 447 [28] (Nettle JA with whom Chernov and Redlich JJA agreed).

[218] As set out in full in the Schedule to these Reasons.

[219] O'Connell v Nixon [2007] VSCA 131; (2007) 16 VR 440, 447 [28] (Nettle JA with whom Chernov and Redlich JJA agreed).

[220] A-G (SA) v Adelaide City Corporation [2013] HCA 3; (2013) 249 CLR 1, 65 [145] (Heydon J).

[221] See the discussion on the alleged 'right to smoke' arising from the lack of a ban under the Tobacco Act 1987 (Vic) in De Bruyn (by his litigation guardian De Bruyn) v Victorian Institute of Forensic Mental Health [2016] VSC 111 [94]-[95] (Riordan J).

[222] A-G (UK) v Guardian Newspapers Ltd [No 2] [1990] 1 AC 109, 283 (Lord Goff).