(8) the second defendant occupies, if he occupies at all, as caretaker, and this is a permitted use.
33 Thus a key issue in the proceedings is what was covered by the word "occupy". I was handed pages from dictionaries. On the one hand I was informed that the Macquarie Dictionary gives as its primary meaning of "occupied" as "to take up space, time etc" and its fifth meaning was "to be resident or established in a place as its tenant".
34 The Oxford Dictionary gives as its primary meaning "to take possession of, take for one's own use, seize" and its third use "to take up, use up, fill space or time".
35 One must look at the word "occupy" in its context.
36 In Hammersley Iron Pty Ltd v Roberts (1995) 14 WAR 28, Commissioner Wheeler QC as her Honour then was, said at 33, that as shown in Poland v Earl Cadogan [1980] 3 All ER 544:
"[t]he discussion in that case demonstrates that the meaning of the word 'occupy' is not fixed, but is context dependent."
37 Poland's case was one where a tenant who was occupying a house as his residence had by statute the right to acquire the freehold. Poland sought to assert that right, but the owner of the freehold contested whether he was occupying the house as his residence.
38 At 550, Eveleigh LJ said that "occupy as his residence" was not the equivalent of "lives and resides". He quoted Lord Sterndale MR in Re Gibbons [1920] 1 Ch 372 at 379 where his Lordship had held that there was a real difference between reside and occupy. Eveleigh LJ said a person may occupy premises as his residence even though he is absent for a long period so long as he keeps the property ready for habitation whenever he pleases to go into it.
39 Here we see that the word "occupy" is conjoined with use, clause 30 saying: "right to occupy and use the premises". When the schedule is looked at, one can see the right is to use as a marina … and caretaker's residence.
40 "Use and occupation" is a well known phrase in landlord and tenant law. As Foa on Landlord and Tenant (7th ed) says at p 393, an action by a property owner for use and occupation by the defendant of its property lay at common law. Ordinarily, if a person enters on to land with the intention of using the property as a tenant, that person is said to use and occupy the land (see p 395). However, that's not quite the point involved in the present case.
41 In Poowong SC v Gillen [1907] VLR 37, Hood J had to consider whether a person who had built a house without any authority on Crown land was liable to pay rates. The question was whether the land was unoccupied land, the property of His Majesty. Hood J held that it was not unoccupied Crown land, that title had nothing to do with it. He said that if a house is vacant and is maintained so that it is ready for habitation whenever its owner pleases, the owner is an occupier even though he might not reside in it one day in a year. Whilst a tramp who squats for a day or so in a house is not to be considered in occupation, if a person is living on land for a continuous period then that person may be held to be in occupation.
42 The question of occupation has been discussed from time to time by the NSW Administrative Decisions Tribunal in cases involving the right to receive a grant under the First Home Owner Grant Act 2000. Section 12(1) of that Act requires an applicant for a first home owner grant to occupy the home to which the application relates as the applicant's principal place of residence within 12 months. Questions as to what is meant by "occupied" arise.
43 One of the most recent decisions is that in Re Chief Commissioner of State Revenue and Ferrington (2004) 57 ATR 170; [2004] NSWADTAP 41. At 176 [23] and following the tribunal discusses the meaning of the word "occupy". It specifically refers to the decision of Hardie J in Baulkham Hills SC v Mekol Pty Ltd (1970) 92 WN (NSW) 553 at 557 (affirmed by the Court of Appeal as Mekol Pty Ltd v Baulkham Hills SC [1971] 2 NSWLR 54).
44 In the Mekol case the court was concerned about who were the "occupants" of retail premises for the purpose of deciding what provisions should be made for parking. The argument was put to the judge that "occupants" meant owners or tenants and perhaps their licensees. However, his Honour said at 558 that the:
"[s]ection refers to vehicles likely to be used by the legal occupiers, whether owners or tenants and also those used by persons who work in the subject premises, so long as their presence on the premises has some element of regularity and continuity and permanence. … persons who visit the premises for short periods only as customers of a retail store or clients of a business conducted in the subject building do not come within the sub-clause."
45 Harris v McKenzie (1987) 9 NSWLR 139, another case referred to by the tribunal, involved the question as to whether a university college occupied premises. The Court of Appeal held that it did, Kirby P saying at 147:
"'Occupier' normally means the person who has the immediate supervision and control of premises and the power of permitting or prohibiting the entry of other persons."
46 Again it can be seen that a person who has the right to occupy and a person who has the right to reside are not necessarily the same.
47 I believe it follows from this line of thinking that occupation does not necessarily imply residence at all and so I reject Mr Knackstredt's submission to the contrary.
48 I also reject the proposition that a person who does not live continuously in a flat ceases to reside in the flat. Here, the facts clearly show that the first defendant has fitted out its unit ready for habitation at any time and that the fact of residence has occurred more than on the odd occasion and accordingly, there has been occupation as a residence. I do not consider that the way in which the word "occupy" has been dealt with in the authorities allows one to distinguish between casual residence and permanent residence, though as Wood J has said, a couple of days' squatting would not amount to residence.
49 Under the head lease the permitted use was marina, marina facilities, shops, restaurants and caretaker's residence. None of these encompasses residence as a domicile save and except "caretaker's residence". Indeed, the fact that "caretaker's residence" is included of itself indicates that other residence is not included in the permitted use.
50 There is no doubt that as the only possible caretaker can be Mr Skyver, the second defendant, that there can be no entitlement to residence for the first defendant.
51 As far as Mr Skyver is concerned, his affidavit notes that he has acted as caretaker since December 2002.
52 I take notice of the fact that on the 1996 plan, provision is made for a caretaker's bedsitter with bathroom facilities but no kitchen facilities which occupies part only of the space now occupied by Unit 7. The area occupied by Mr and Mrs Skyver is far more extensive than this and is in Unit 5, not Unit 7. The evidence is that they turned the sail maker's loft as it was previously known, into a unit with two bedrooms, two bathrooms and a study which cost them approximately $120,000. In addition, they paid the plaintiff, then controlled by Mr Rodgers, a further $350,000 for the shares which entitled them the right to occupy Unit 5.
53 However, I do not consider that this is fatal to the second defendant's claim. It is the head lease that one looks at to see the purpose for which under that lease the premises can be used, not the council's plan. Under the head lease, part of the leased premises can be used for a caretaker's residence and there is no specification as to what part. Although the head lease requires the improvements to be erected as specified in development application 91/0204, there is no evidence before the court as to what that is, whether it was the same or similar to 96/1828 which is in evidence, or was otherwise. Furthermore, this court generally has no jurisdiction to consider whether a declaration or injunction should be made in respect of occupation which is contrary to a town planning law.
54 Accordingly, at this point were it not for equitable defences and the defence of lack of utility, a declaration should be made that the right of exclusive occupancy of Unit 5 granted by the articles of association of the plaintiff do not create a right to reside in that unit as a domicile except as a caretaker's residence, and a similar declaration should be made in respect of Unit 7, leaving out the words "except as … residence".
55 A declaration of right is not an equitable order and so equitable defences do not apply. Accordingly, strictly speaking, I need not consider defences such as acquiescence and delay. However, declarations are not made unless they are of some utility. The defendants argue that there is no utility in making any declaration. Again, where there are equitable defences against granting an injunction, unless there is a claim of damages before the court (which there is not in the instant case), it would not be proper to make a declaration.
56 Accordingly, I need to examine the pleas of acquiescence. As I have mentioned, the plaintiff has been in the hands of its present proprietors only since May 2005. However, it is the same legal entity as has existed for many years including from 2002 when the agreement was made with Mr Skyver and he paid $350,000 to the company then controlled by Mr Rodgers. Occupation of Unit 5 has taken place openly since the end of 2002, and Mr Rodgers must have known, he also being a director of the plaintiff, of the occupation of Unit 7. Thus, the occupation of both units as residences has been known for six years and it is only now that the plaintiff is taking action.
57 In addition, Unit 6 was, up until recently, being used as a residence by persons associated with the owners of the shares in the plaintiff. That has now ceased. However, Mr Knackstredt says that the damage has been done, the lease is liable to forfeiture for breach of condition, and any other occupation by his client of Unit 5 does not increase the plaintiff's exposure to forfeiture one whit.
58 I cannot accept this submission. First, whilst the occupation of Unit 6 may technically have worked to forfeiture, that forfeiture may well have been waived, or if it wasn't, then as it is now no longer current, the tenant may well be able to avoid the landlord re-entering because of it. However, the breach in conjunction with Units 5 or 7 would be a continuing breach which would cause the mesne landlord more trouble.
59 So far as the first defendant is concerned, I do not consider that it is conscionable to uphold the plea of acquiescence. The first defendant sold the shares in the company which owned the marina to the present proprietors for over a million dollars. At that stage it was occupied by both defendants. Moreover, collateral deeds were entered into recognising the occupation of the defendants and the new proprietors of the shares were made to promise not to disturb that occupation.
60 As far as the first defendant is concerned, there was nothing in the conduct of the plaintiff which caused the first defendant to alter its position in reasonable reliance on the plaintiff's acceptance of the status quo (see Lindsay Petroleum Co v Hurd (1874) LR 5 PC 221). Indeed, the deeds referring to occupation themselves show this is so. As the parties to the deeds are the proprietors of the shares in the plaintiff and not the plaintiff itself, those deeds are actually irrelevant for the question of liability in the present case, but they are in evidence.
61 So far as the second defendant is concerned, the position is a little different. Mr Skyver paid his money in good faith to the plaintiff then controlled by Mr Rodgers. He has occupied the premises for the last six years. He has spent money on the faith of the promise made that he could occupy. It seems to me that I should not make any injunction against him. However, the declaration that I have forecast earlier is appropriate.
62 So far as the first defendant is concerned, the declaration that I have indicated above is appropriate and I cannot see any operative equitable defence which would prevent the appropriate injunction being granted. As I have indicated earlier, the deeds made in respect of occupation are not deeds to which the plaintiff is a party.
63 That only leaves the cross-claim. The first defendant says that if the orders sought by the plaintiff were to be made, then the conduct of the plaintiff would be unfairly prejudicial or unfairly discriminatory against it, and it should have an order pursuant to s 233(1)(d) of the Corporations Act that the cross-defendant/plaintiff purchase its F class shares.
64 This aspect of the case was not strongly argued before me. However, the problem for the cross-claimant/first defendant is that it must demonstrate as a precondition of the court making any order, that conduct of the plaintiff company is unfairly prejudicial to or unfairly discriminatory against it. It says that that is so because under the articles of association it holds rights of occupation and it considered to the knowledge of the directors (namely Mr Rodgers himself) that the right of occupation included a right of residence and now the first defendant is being forced to abandon this.
65 However, the plaintiff needs to defend itself and its shareholders generally from possible forfeiture of the lease and the actions which have made that forfeiture possible are actions of the persons who now control the first defendant. The mere fact that the action is taken to undo the damage caused by the previous proprietors, does not seem to me to qualify as conduct of the plaintiff company's affairs which is prejudicial to the first defendant.
66 After all, if persons for whom the defendant was responsible kicked a football through the window of common property, and the plaintiff company sued for damages, it might well be said that there was discriminatory conduct in that the plaintiff company was only suing one shareholder. However, it would not amount to unfairly discriminatory conduct as it was people in the defendant's camp who had caused the problem. I do not consider that it has been shown that the plaintiff's conduct in seeking to terminate the rights of occupation is unfairly prejudicial or discriminatory.
67 However, as I say, the point was only faintly argued and I would be minded to consider the matter in greater depth if an application were made by the first defendant for me to do that, and I considered it appropriate to do so after hearing the plaintiff on, of course, terms as to costs.
68 However, at present I am minded to dismiss the cross-claim.
69 The second defendant did seek to file a cross-claim, but at the hearing I ruled that it was out of order and I should dismiss it without prejudice to a second action being commenced.
70 I will, at this stage, simply publish these reasons and stand the matter over for short minutes to be brought in by the plaintiff. I will provisionally fix the time for the short minutes to be brought in at 9.30am on Thursday 11 December 2008. However, if this time is unsuitable to counsel, an alternative time may be arranged with my Associate provided she is contacted the week before.