Makowski v NSW Self Insurance Corporation; Mircevski v NSW Self Insurance Corporation; Makowski v NSW Self Insurance Corporation [2025] NSWCATCD 176;

(1) Their legal interest, as tenants in common, in the land known as Lot 2, 3 and 4 in DP 1156105, between 30 May 2014 and 20 April 2018;

(2) Their legal interest, as tenants in common, in the land known as Lot 101, 102, 103, 104, 105 and 106 in DP 1208824, between 20 April 2018 and 4 June 2018;

(3) Their legal interest in the 8 dwellings on 1 December 2017 when the OC was issued;

(4) Their legal interest in the 8 dwellings on 20 April 2018 when the subdivision was registered.

1. The applicants' legal interest in all 8 dwellings was extant to 4 June 2018 when the transfers were executed.

Does ownership as tenants in common yield to the intention of the parties?

1. The applicants' case may be summed up in this way (using my words): "Yes, we owned the land and the dwellings as tenants in common. But we always intended each couple would own only 2 dwellings, therefore we always had beneficial ownership of 2 dwellings only, therefore we are not developers."
2. The alleged legal basis for this position was summarised by the applicants' counsel in oral submissions: "From intention we get ownership. At equity we were only ever the owner of two." And, as per the written submissions: "ownership as tenants in common yields to the intention of the parties".
3. This is a novel argument.
4. To the extent the applicants are claiming equitable relief, NCAT does not have jurisdiction to deal with their claim: Steak Plains Olive Farm Pty Ltd v Australian Executor Trustees Limited [2015] NSWSC 289.
5. I leave the jurisdictional question aside. The key problem for the applicants is they do not point to any relevant authority to support the underlying proposition that the legal owner of land and the dwelling on it can also be the beneficial owner of a lesser interest.
6. The applicants' submissions regarding s 66G of the Conveyancing Act 1919 were not properly developed.
7. There is also no explanation and no relevant case law to support the underlying proposition that the applicants are at the same time trustees and beneficiaries, and that they hold their beneficial interest on behalf of themselves.

1. Both parties referred to Allianz. In that case the third defendant ("GEO") entered into building contracts with a builder to construct townhouses on land owned by GEO. The builder went into liquidation. The plaintiff claimed GEO was a developer within the meaning of s 3A.
2. Ball J said at [14]:

"in order for the Owners Corporation to prove that GEO was a developer, it had to prove that, at the time of the construction of the townhouses, GEO was to be the owner of at least four of them."

1. GEO gave evidence that at the time the building work was done, it had an intention not to become the owner of the completed dwellings. It submitted that the fact some townhouses were sold after completion did not alter the position.
2. At [22] and [23] Ball J said:

"GEO owned the land on which the townhouses were built. It entered into contracts with Rubikcon to build the townhouses and entered into contracts for the sale of those townhouses. In the normal course of events, it is to be expected that GEO would own the townhouses up until the time of completion and that completion would not occur until the townhouses were ready for occupation. That is so whether GEO entered into contracts for the sale of the townhouses off the plan or not. In its submissions to the referee, GEO confused entry into a contract for sale and completion of that sale.

GEO did not seek to lead any evidence to suggest that some different arrangement applied in this case, although it was clearly in a position to do so if there was. Absent that evidence, the appropriate conclusion to draw is that, consistently with what is to be expected, GEO would retain ownership of the townhouses until completion and completion would occur after the townhouses were ready for occupation. It follows that the townhouses would, on their completion and until they were transferred to the buyers, be owned by GEO. For that reason, GEO was a developer within the meaning of s 3A." (emphasis added)

1. In other words, the relevant time to determine whether a person owns 4 or more dwellings is on completion, that is, the date the OC was issued.
2. Similar to GEO, the applicants say their intention and agreement was not to own all 8 of the completed dwellings, only 2 or 3. Like GEO, all 8 dwellings were owned by the applicants on completion and until transfer on 4 June 2018.
3. If their intention did create a "beneficial interest" in just 2 or 3 dwellings, that is not "some different arrangement" that could somehow neutralise the reality that at the time of completion they were the registered proprietors of 8.
4. The applicants submit that if the date of completion is relevant, completion occurred at the time of the subdivision or partition, because the DA required the issue of the OC before the subdivision.
5. This does not assist the applicants because the subdivision occurred about 2 months before the applicants finally divested themselves of the "excess" 5 or 6 dwellings.
6. Whether or not the applicants had beneficial ownership of just 2 dwellings, and whether the date of completion was the date of the OC or the date of subdivision, the conclusion is the same: each applicant had legal ownership of more than 4 dwellings.

1. In Multiplex the respondent was a development manager under a Development Management Agreement between the parties. It was held that Multiplex was not an "owner" or "developer" within the meaning of the Act. Unlike the applicants, Multiplex at no stage held legal ownership of the development and, despite its significant control over the development, it was not a beneficial owner.
2. How Multiplex might assist the applicants' case was not adequately elaborated.

1. The applicants also rely on Trilogy. It again is distinguished on the facts.
2. In Trilogy the respondent ("TCS") owned land as tenants in common with another owner. They obtained development consent to build a mixed commercial and residential strata building. The construction was completed and an OC for the residential portion of the work was issued. Later TCS transferred its ownership of the lot on which the residential premises were built. Subsequently the commercial and residential strata plans were registered.
3. At [23] the Appeal Panel said:

"It was never the intention that the respondent would own any of those strata home units after the strata plan had been registered. We are therefore of the opinion that the respondent was not a developer within the meaning of s3A of the Act." (emphasis added)

"That is, TCS was relevantly a legal and beneficial co-owner (as tenants in common) of the land on which the development occurred, and following completion of the build ... became the beneficial owner of only the commercial portion. In these circumstances the Appeal Panel held that TCS was never intended to be the owner of the residential lots for the purpose of section 3A."

1. I do not accept that is an accurate representation of the Appeal Panel's decision. It overlooks the observation at [8] that at the date of transfer TCS held no proprietary interest in the residential premises. In a strata development, ownership does not arise upon the issue of the OC. Pursuant to s 4 of the Strata Schemes Management Act 2015 (NSW), a strata scheme is not constituted until the registration of a strata plan. Therefore, ownership of strata premises cannot vest until registration of the strata plan.
2. The present application is distinguished because, as a non-strata development, the relevant time to determine whether a person owns 4 or more dwellings is at the time of the issue of the OC, as per Allianz.
3. Like TCS, the applicants say they did not intend to own 4 or more dwellings. But unlike TCS, the applicants transferred ownership of the dwellings after they were complete. Trilogy does not assist the applicants.
4. While the applicants intended ultimately to own no more than 2 (or 3) dwellings, I am not persuaded that this created a beneficial interest to which their legal interest yielded.
5. The relevant circumstances are that 4 or more dwellings were proposed, and were, owned by each applicant as part of the residential development.
6. At the time of completion, the applicants were each the registered proprietor of 8 dwellings.
7. It seems hardly necessary to note the other indicators that the applicants were developers:
   • In the DA all 6 dwellings were considered and approved together;
   • A single OC was issued for the 8 dwellings;
   • The Deposited Plan Administration Sheet identifies all 8 dwellings and is signed by all 6 owners;
   • The finance loan was in the name of all 6 owners;
   • The owners entered into one single building contract for the construction of all 8 dwellings;
   • Mr Makowski, in an affidavit prepared for the District Court proceedings (commenced prior to the builder going into liquidation), described the owners as 'developers' and the dwellings as the 'development site'. I do not accept these descriptors are merely useful abbreviations, as the applicants submitted. The affidavit was witnessed by and filed by the owners' legal representative. The fact that one of the owners used these descriptors before the policy came into contention is relevant (Allianz at [20]).
8. I am satisfied the applicants were developers within the meaning of s 3A of the Act and therefore are not entitled to indemnity from the respondent.

1. It follows that the three applications are dismissed.

(1) The application is to be filed and served, supported by evidence and submissions not exceeding 3 pages in length within 14 days of the date of these orders;

(2) Evidence and submissions in response to the costs application not exceeding 3 pages in length are to be filed and served within 28 days of the date of these orders;

(3) Any material in reply is to be filed and served within 35 days of the date of these orders;

(4) In their submissions the parties are to address whether a hearing on costs should be dispensed with, and costs determined on the papers.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.