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[2004] VSC 438
Supreme Court of Victoria
2004-11-09
Mandie J
Original judgment source is linked above.
[2004] VSC 438
REAL PROPERTY - STATUTES - definition of "building owner" in s.54(3) of the Domestic Building Contracts Act 1995 (Vic) - whether a body corporate under the Subdivision Act 1988 (Vic) is the registered proprietor of common property when the common property "vests" in the lot owners under s.28(d) of the Subdivision Act - whether the lot owners are owners of the common property in law as well as in equity - whether the body corporate, if the registered proprietor of common property, is "the owner for the time being" of the land comprising the common property for the purposes of the - whether VCAT in error in ruling that the body corporate was not "the owner for the time being" of the common property.
"By its decisions made on 5 September 2003, 17 December 2003 and 28 January 2004, did the Tribunal fall into legal error in holding that the [appellant] was not the owner of the common property and/or was not the `building owner' within sections 54(1) and 54(3) of the Domestic Building Contracts Act 1995, with the result that the application commenced by the [appellant] at Victorian Civil and Administrative Tribunal was held to be misconceived and liable to be dismissed in its entirety pursuant to section 75 of the [VCAT] Act?"
"A reference to a building owner in this section includes a reference to any person who is the owner for the time being of the building or land in respect of which a domestic building contract was made or domestic building work was carried out." (Emphasis added)
""body corporate" means a body corporate which is incorporated by registration of a plan of subdivision ...; "land affected by a body corporate" means the lots of which the owners for the time being are the members of the body corporate together with the common property for which the body corporate is responsible; "lot" means a part (consisting of one or more pieces) of any land (except a road, a reserve or common property) shown on a plan which can be disposed of separately ...; "lot entitlement" in relation to a lot affected by a body corporate, means a number specified in the plan as the lot entitlement for that lot, expressing the extent of the lot owner's interest in any common property affected by the body corporate; "owner" means-- (a) for land under the Transfer of Land Act 1958 ... the registered proprietor of the fee simple in the land, or a person who is empowered by or under an Act to execute a transfer of the land; "plan of subdivision" means a plan showing the subdivision of land"
"(2A) When the land set aside as a road vests in a Council, person or body-- (a) the land continues under the operation of the Transfer of Land Act 1958 and the Council, person or body is deemed to be its registered proprietor; and (b) the Registrar need not create a folio of the register or produce a certificate of title for the land..."
"27. (1) A plan may provide for the creation of one or more bodies corporate consisting of the owners of specified lots. (2) A plan which contains common property must provide for the creation of one or more bodies corporate. ... 28. ... when a plan providing for the creation of one or more bodies corporate or containing common property is registered-- (a) each body corporate for which the plan provides is incorporated; and (b) the owners of the specified lots become the first members of the body corporate; and (c) the owners for the time being of the lots are the members of the body corporate while they are owners; and (d) any common property vests in those owners as tenants in common in shares proportional to their lot entitlement; and (e) the Registrar must create folios of the Register for any common property in the name of the body corporate as nominee for those owners but must not produce a certificate of title for those folios, and may require submission of and cancel any existing certificate of title for common property 28A (1) The share in the common property of a member of a body corporate cannot be dealt with except-- (a) as part of a dealing with the member's lot; or ... (c) by the body corporate, in accordance with the regulations. (2) A dealing, encumbrance or notification affecting a lot operates as a dealing, encumbrance or notification affecting the lot owner's share in the common property, even though that share is not mentioned in any document giving effect to the dealing, encumbrance or notification affecting the lot. (3) The Registrar may only record on the folio of the Register for common property anything affecting the common property only and not the lots. (4) A recording made on the folio of the Register for a lot operates in relation to the owner's interest in the common property as if it were also a recording made in relation to that interest on the folio for the common property. 29 (1) A body corporate has perpetual succession and a common seal and is capable of suing and being sued in its own name. (2) A body corporate and its members have the constitution, duties, functions, powers, rights and liabilities specified in the regulations. ... (6) The body corporate may in its own name and on behalf of its members execute any document or do anything necessary or convenient to enable it to carry out its duties, functions, powers, rights and liabilities, and the document or thing has effect as if executed or done by the members. .... (10) A body corporate cannot mortgage common property. 30 (1) Nothing in this Act or the regulations limits the right of a member to effect a policy of insurance in respect of destruction of or damage to a lot owned by him or her or his or her interest in the common property. (2) A body corporate must be taken to have an insurable interest in the land affected by the body corporate. ... 32 (1) If there is a unanimous resolution of the members, a body corporate may proceed under this section to do one or more of the following-- (a) dispose of the fee simple in-- (i) all or part of any common property;... ... (b) purchase or otherwise obtain land - (i) for inclusion in or to become common property;... ..."
"97 (1) This Act and any subordinate instrument ... made under it apply to the Subdivision Act 1988 as if that Act formed part of this Act, and that Act must be read as one with this Act. (2) If a provision of the Subdivision Act 1988 or the regulations made under that Act is inconsistent with a provision of this Act or a subordinate instrument made under this Act, the provision of that Act or those regulations prevails."
""folio of the Register" means a folio of the Register under section 27 "proprietor" means any person seised or possessed of or entitled to any estate or interest in land and includes any person who is the donee of a power to appoint or dispose thereof; "registered proprietor" means any person appearing by the Register ... to be the proprietor of any estate or interest in land"
"27 (1) The Registrar must keep a Register of land which is under the operation of this Act. ... (4) The Register consists of folios of the Register. ... (6) A folio of the Register-- (a) must contain the recordings that are required or authorised to be made in the Register by or under this Act or any other Act and that affect the land for which the folio is created; and (b) must include a distinctive identifying reference for the folio; and (c) may contain recordings of any other information that the Registrar thinks appropriate to record on the folio; and (d) may describe any land by reference to a separate map or plan in the Office of Titles-- and so much of a separate map or plan as relates to the land in the folio is deemed to form part of the folio in which it is described. (7) The Registrar creates a folio of the Register by making a recording of-- (a) a description of the land for which it is created; and (b) ... a description of the proprietor for the time being of the land for which it was created; (c) such other particulars as the Registrar thinks fit of-- (i) other estates or interests, if any, affecting the land; and (ii) other information, if any, that relates to the land and is required to be recorded on the folio by or under this Act or any other Act-- and by allocating a distinctive identifying reference to those recordings. ... (8) Subject to section 24(4) of the Subdivision Act 1988, on-- (c) the approval of a plan of subdivision in accordance with any law for the time being in force relating to the subdivision of land; or (d) being required by or under this Act or any other Act to do so-- the Registrar must create any folios of the Register that are necessary. ... 27B (1) A certificate of title is a document in writing containing the information, or an extract of the information, on a folio of the Register as at the date of production of the certificate of title. ... (7) Subject to sub-section (7A), on-- (a) the creation of a folio of the Register; the Registrar must produce a certificate of title for that folio. ..."
Is the body corporate the registered proprietor of the common property?
Is the body corporate the owner for the time being of the land comprising the common property under s.54(3) of the Domestic Building Contracts Act?
[1] Multiplex Constructions Pty Ltd is the second respondent to the present proceeding, but that aspect of the proceeding has been resolved.
[3] See ss.40-44 of the Transfer of Land Act.
[4] This submission is in accord with the practice of the Registrar of Titles in noting the body corporate as the registered proprietor on the folio of the Register relating to the common property.
[5] The same approach finds expression in Halsbury's Laws of Australia: Real Property, para [355-9060] fn.3: "Despite use of the term `nominee', it would seem that the effect of [the Subdivision Act 1988] s.28(d), 28(e) is to set the equitable title to the common property in the lot owners in shares proportional to their lot entitlement and the bare legal title to the common property in the body corporate. The body corporate is thus the trustee for its members but can only deal with the property in the manner specified in the Act ... This approach simplifies the registration process ..."
[6] See Herdegen v Federal Commissioner of Taxation (1988) 84 ALR 271, 281 per Gummow J and Corumo Holdings Pty Ltd v ITOH Ltd (1991) 5 ACSR 720, 747 per Meagher JA.
[7] Citing Wily v St George Partnership Banking Ltd [1999] FCA 33; (1999) 161 ALR 1, 9 per Finkelstein J.
[8] [2003] VCAT 2020 (8 September 2003).
[9] Mr Derham referred to the definition of "building" in s.3 of the Domestic Building Contracts Act, namely, "'building' includes any structure, temporary building or temporary structure and also includes any part of a building or structure".
[10] Mr Derham referred to the definition of "land" in s.38 of the Interpretation of Legislation Act 1984 (Vic) as including any estate or interest in land.
[11] Reliance was placed upon one of the definitions of nominee in The Macquarie Dictionary (3rd ed): "someone appointed by another to act as their agent".
[12] That is not to say that the Subdivision Act is an example of good drafting: see Walker v Registrar of Titles [2001] VSC 354, at [1] per Eames J.
[13] Compare one of the definitions in a US legal dictionary - Blacks Law Dictionary (7th ed): "a party who holds bare legal title for the benefit of others ..."
[15] Section 28(b) of the Subdivision Act.
[16] Section 28(c) of the Subdivision Act.
[17] Section 27(1) of the Subdivision Act.
[18] See s.29(1), (2) and (6) of the Subdivision Act; see too, under the Subdivision (Body Corporate) Regulations 2001 cl.201, the power of the body corporate to repair, maintain, manage and administer the common property, under cl.206 to permit the use of the common property by members of the public, and under cl.218, by special resolution, to lease or license the whole or any part of the common property.
[19] Section 28A(1)(c) of the Subdivision Act.
[20] Section 32(1)(a)(i) of the Subdivision Act.
[21] Section 32(1)(b)(i) of the Subdivision Act.
[22] Reference should briefly be made to s.30(2) of the Subdivision Act which provides that a body corporate must be taken to have an insurable interest in the land affected by the body corporate - this provision gives the body corporate an insurable interest in the lots of the lot owners as well as in the common property, thereby not affecting the present question one way or the other.
[23] Section 29(10) of the Subdivision Act.
[24] See s.28A(4) of the Subdivision Act.
[25] If the body corporate is a "bare trustee" of the common property that would be a sufficient basis for it to be treated as the registered proprietor, but I think that under the Subdivision Act a body corporate is more than a "bare trustee".
Body Corporate No 1/PS40911511E St James Apartments
Renaissance Assets Pty Ltd [2004] VSC 438
(1988) 84 ALR 271
(1999) 161 ALR 1