63. It is obvious from all the circumstances, as well as his sworn evidence, that Mr Edwards was acting on instructions and as agent for the three owners pursuant to instructions given to him by Mr Celotto. There is no substance in Mr Peake's contention that there is no power in an agent to delegate or engage an agent, as Mr Celotto did in engaging Mr Edwards on behalf of the co-owners as well as himself. There may be a general rule to that effect but there are plenty of exceptions, see page 85 of Bowstead, several of which are applicable here. Not only was Mr Edwards engaged and instructed to act as agent, his actions in that capacity were accepted and amply ratified and acted upon.
Sullivan, Celotto and Novamero Pty Ltd were the Owners and Applicants for the Subdivision Permit.
64. The second sentence of condition 5 in fact refers to "applicants/owners" rather than "applicant" when it refers to who is to be responsible for the preparation and execution of the agreement required by the first sentence. This is a fuller and more correct formulation. Ms Sullivan, Mr Celotto and Novamero Pty Ltd were the true applicants and the owners. The reference to "the applicant" at the beginning of the first sentence is an inconsistency of expression compared with that used in the second, but it is a mere slip. It is clear, on a proper and reasonable interpretation, that it is the three owners who are to enter the agreement and be responsible for the costs.
65. Both s. 62(2)(f) and s. 173 refer principally to the owner, but also make reference to applicant. However, that is really to cope with the situation where someone is not yet truly the owner but has applied for a permit in anticipation of becoming the owner. Perhaps this is how the term applicant has crept into some peoples precedent for drafting such conditions as this one.
Is Condition 5 Invalid for Not Specifying Time for Entering Agreement?
66. Another suggested defect in the drafting of condition 5 is its failure to specify a time within which the agreement is to be entered or alternatively to state that it must be entered before the use or development starts. Such a specification would fulfil the latter part of s. 62(2)(f).
67. Mr Peake wants to argue that the whole condition is invalid for failure to specify a time or otherwise explicitly signify when the agreement must be entered. Alternatively, he argues that in the absence of such time limit there cannot be a contravention of condition 5 because it cannot be shown that the time within which the agreement is to be entered has, or will ever, expire.
68. I agree with him that it would be better if a period had been specified, but beyond that I think he indulges in excess technicality and exotic legality. It would be better if the condition stated that the agreement must be entered before a statement of compliance under the Subdivision Act 1998 or before the development constituted by the subdivision commenced. That would have made the matter quite clear and the commencement of the contravention committed by the owners' failure and refusal to enter an agreement explicit.
69. Nevertheless, I think it is perfectly obvious that the agreement is intended and required and that it is implicit that it is required to be entered by the commencement of the development, that is to say the subdivision and certainly before its completion. In this case the owners have acted on the permit, prepared and lodged a Plan of Subdivision, had it registered, received separate titles, sold off the separate pieces of land and settled those transactions, all without having complied with condition 5. It is implicit, indeed it goes to the heart of the condition, that the agreement must be entered into before lodgement and before registration. The obligation under the agreement does not cease because of failure to comply with the requirement to enter the agreement when that obligation first arose. It is, in my opinion, a continuing contravention, and a continuing offence, that goes on until the obligation is fulfilled.
Purpose of Condition 5.
70. I am satisfied that the purpose of the condition, and the agreement it contemplates, was to prevent a two storey house on the land and to require a house complying with the permit granted by the AAT, including its endorsed plans. The requirement was not, and was not intended to be, transitory. It was not contemplated that the house would be subsequently converted into a two storey dwelling. The purpose of the agreement was to impose a continuing obligation to maintain it as a single storey dwelling. I also believe that the permit for subdivision would not have been granted at all if the Responsible Authority had not been able to impose condition 5 and believed itself to be able to validly impose that condition.
71. The owners have accepted the benefit of the permit and acted on it without complying with the condition. If they were dissatisfied with the condition, as to its drafting, its validity or its fairness and appropriateness; they had their remedy of being able to appeal against the condition under s.80 PE Act (such appeals are now referred to as applications for review, but appeal was the correct expression in May 1998). There are other proceedings they might have taken too, but I think it is significant that they did not appeal. The legislation and various relevant forms make it clear that they had this right and the owners, in their various manifestations, are not inexperienced in these matters. They appealed, through Novamero Pty Ltd, in relation to the application that gave rise to the permit limiting construction on 5 Harold Street to one storey. Furthermore they had access to expect advice from the relevant professionals they engaged to act on their behalf. I believe that the decision not to appeal was a deliberate one.
72. It was suggested by Mr Peake that the purpose of the condition was a different and more limited one to that of ensuring a single storey dwelling in compliance with the earlier permit. Indeed, after the subdivision permit was issued, various representations were made to some officers of the Responsible Authority seeking to persuade them that the purpose of the condition was merely to ensure completion of the house in accordance with the plans, or to ensure that the site was not left vacant or with a half constructed building. There are other forms of condition employed to prevent those ills. However it was put that such objectives would be achieved on completion of the house thereby rendering the condition requiring 173 agreement redundant. I accept that such representations were made but also that they were misleading and designed to inveigle officers, if possible, into agreeing to not requiring the 173 agreement, although it was, and always was, necessary to achieve the true purposes of the condition. I do not accept the alternative and lesser versions of the purpose of condition 5 argued for by Mr Peake or by those making such representations to Council officers.
Statement of Compliance does Not Nullify Condition 5.
73. It would have been better if the condition had insisted on the entering of an agreement prior to a statement of compliance and if Council officers had not been inveigled into granting a statement of compliance without a satisfactory agreement having been entered. This does not mean, as also argued by Mr Peake, that the Responsible Authority, and the public generally including Mrs Hall, have foregone their right for all time to have the condition complied with and the agreement entered. Refusal to grant a statement of compliance, and therefore the ability to proceed with the subdivision, is a very powerful compulsion on an applicant/owner to provide the agreement or do whatever else might be necessary to obtain the statement of compliance. The existence of that generally effective method of obtaining compliance with such a condition does not mean that compliance with the condition cannot be sought by any of the conventional means of enforcement that are normally open in relation to any condition. In this connection I have in mind the obtaining of an enforcement order, prosecution and, perhaps, the obtaining of an injunction. It might be convenient for me to have a newspaper delivered to my house. If I forego that opportunity it does not mean that I have foregone all opportunity to have a newspaper. I can still buy one at the newsagents or at the station or from a vendor on a street corner. So it is with the opportunity to require execution of the agreement prior to issuing a Statement of Compliance and the opportunity to withhold such statement until the agreement is executed. Such withholding would be a good and effective strategy, but failure to adopt it does not invalidate the condition or forego other means of having it complied with.
74. As I have said, the owners, having been issued with the subdivision permit did not appeal against condition 5, or comply with it, but sought to evade it by persuading the Council to grant a certificate of compliance without them having entered an agreement in accordance with condition 5.
Evidence of Ms Sullivan
75. In May 1998 the subdivision permit was issued. Ms Sullivan gave sworn evidence in the course of the hearing, although Mr Celotto did not. She stated that the purchase of 22-24 Norwood Street by the three owners was an investment and that it was always intended to develop the land by subdividing it into three and by constructing a house on 5 Harold Street which she would acquire. She always wanted a two storey house. A single storey house would not, in her view, be adequate. In the course of giving evidence about the size of the house she said "I wanted a bigger house. A single storey would not suffice".
76. In giving her evidence she sought to portray herself as something of "an innocent abroad". She said she relied on Mr Celotto, on the basis that he was more experienced, and he acted as her agent. She also had advice from "my solicitor". In fact the reference to "my solicitor" referred to Galbally & O'Bryan who also acted for Celotto and Novamero Pty Ltd. The actual solicitor from Galbally & O'Bryan handling these matters was a Mr Frank Di Iorio, a partner of the firm. He shares a surname with the director and secretary of Novamero Pty Ltd. In correspondence he made reference to "Our client - Mr Domenic Di Iorio". I can accept that Ms Sullivan may have relied upon and accepted advice from Mr Celotto and the solicitor. I do not accept that she was unaware that she and they were seeking to circumvent the requirements of condition 5 and its aim of ensuring that only a single storey house was allowed on the land. Furthermore she is bound by the actions of those men acting as her agent.
77. Ms Sullivan gave sworn evidence that in March 1998 she was concerned that the owners should be in a position to settle transactions for the sale of Lots 1 and 2 because the funds were required. In fact Mrs Hall was the purchaser of Lot 2, the dwelling on the front of the original allotment nearest to Harold Street in the corner of its intersection with Norwood Street.
Mrs Hall Purchases Lot 2.
78. Mrs Hall also gave sworn evidence. I found her to be a credible witness. I believe her when she says that she inspected the property 3 or 4 times before she signed the contract note to purchase it. She took her daughters and her husband and a friend to see the place. She was shown over this and a number of other properties by the estate agent. She noticed particularly a protruding window recently constructed at first floor level looking out over the land to become Lot 3 ie 5 Harold Street. This window enjoyed an extensive view of the sea (Port Phillip Bay). The window also meant that the room enjoyed good light. She was particularly interested in this room to be her work room, and a place suitable for her to do her painting. She said that it was a big consideration in buying the property that it had this view of the sea and good lighting.
79. I interpose here an observation of my own. It is true that the construction of a two storey dwelling at 5 Harold Street, or at least the present two storey house standing there since the original one storey building was extended, has a considerable adverse impact on the amenity of the dwelling purchased by Mrs Hall. This is particularly true in relation to the room lighted by the protruding window that she mentioned. It is true in relation to the view as well as light through that window and into that room. The existing two storey structure next door at 5 Harold Street also has other adverse amenity effects on her property. A window in the first floor wall of the neighbouring property faces to a window of hers and lighting and "feeling of enclosure" are adversely affected by the height and bulk of the extended structure next door.
Avoiding Condition 5.
80. I also believe Mrs Hall when she said that she read the contract note and vendor statement, together with attached documents before she signed the contract note. The documents included a copy of permit 97/2656 for the development of a single storey house, and permit 98/3400 for subdivision of the land including its condition requiring construction of a single storey house in accordance with permit 97/2656. On the basis of these documents she believed she could safely assume that the house on 5 Harold Street could only be of one storey and would have to accord with the endorsed plans of permit 97/2656. I also accept her statement that, at the time of signing the contract note on the 7 April 1998 she had no notice, in documentary form or by any other means, of an intention to construct a second storey house next door. She believed she would have her view and she said she would not have considered the purchase of the property to be a good investment if there was danger of it being lost and of a two storey building being constructed next door.
81. She moved into the house in May 1998, although settlement did not take place until the 11 December 1998. In the meantime Mr Celotto constructed the single storey house next door or, as it has turned out, the ground floor stage of a two storey house. She experienced some concern on steel beams being delivered in about July 1998 and she had a conversation with Mr Celotto. He told her, and I think it was at this stage, of a desire to add a second storey. This was after entering the contract and moving in. As to this she said:-