Moussa v Owners Corporation of Strata Plan 65404 & Ors

Moussa v Owners Corporation of Strata Plan 65404 & Ors - [2007] NSWLEC 807 - NSWLEC 2007 case summary — Zoe

[25]

(2) If not, did the strata development contract become unenforceable subsequently (including by reason of the doctrines of waiver, election and/or estoppel) having regard to: · any failure by the applicant to comply with implied terms in the strata development contract asserted by the respondents (and denied by the applicant), namely, that: - (i) the authorised proposals under the strata development contract would be carried out in accordance with a development consent granted in 2000 that the applicant permitted to lapse, (ii) the applicant would complete the authorised proposals with reasonable expedition, and (iii) the applicant would complete the development at 35 - 37 Solander Street in accordance with a development consent granted in 1998; and/or · the applicant's conduct in: - (i) allegedly representing when the units developed at 35 - 37 Solander Street were sold that the stage 2 development at 33 Solander Street might not proceed, (ii) permitting the development consent granted in 2000 to lapse, (iii) applying to have the apportionment of strata levies re-allocated on the basis that the development at 33 Solander Street might not proceed, (iv) adopting a position in proceedings No 10129 of 2006 in which no development consent was sought to develop any part of 35 - 37 Solander Street (and thus no such consent was obtained), (v) not proceeding with any authorised proposals under the strata development contract with (what the respondents described as) reasonable expedition, and (vi) allegedly otherwise not dealing fairly and reasonably with the respondents? (3) If the strata development contract is valid and enforceable, what are the rights and obligations of the parties under the strata development contract, particularly with respect to any right of the applicant to: · use the common property on 35 - 37 Solander Street for construction access to 33 Solander Street; · carry out development on the common property on 35 - 37 Solander Street, including by way of different arrangements for visitor car parking, and garage facilities for proposed unit 6 on 33 Solander Street, and landscaping; · require the respondents to grant owner's consent to a development application to facilitate these different arrangements; and · require the respondents to permit registration of such plans as necessary to enable 33 Solander Street to be added to strata plan 65404? (4) Is this an appropriate case for the making of declarations as sought by the applicant in all the circumstances? The circumstances relied on by the respondents (and denied by the applicant) included: · the alleged conduct of the applicant referred to above; · an allegation that the applicant's capacity to proceed with the development of 33 Solander Street as authorised proposals under the strata development contract depended on numerous unresolved issues (including obtaining development consent for the altered arrangements on 35 - 37 Solander Street, obtaining a construction certificate for the development of 33 Solander Street, adding 33 Solander Street to strata plan 65404 by registration of the required plan, and obtaining the approval of the Council to the amendment of the strata development contract); · an asserted lack of any justiciable dispute between the applicant and the respondents about any existing and specific matter; and · the form of the declarations and orders sought that were said to be inadequate and inappropriate to resolve any such dispute. 5 Proceedings No 40097 of 2007 also raised a subsidiary issue whether the applicant, as owner of development lot 6 in strata plan 65404, was bound to pay any contribution to common property expenses unless and until that lot is developed.

[202]

122 The applicant submitted that the requirements of s 28K of the Strata Schemes Act were satisfied as: - (i) the evidence showed that the applicant's motions supporting the amendment had been defeated, (ii) the respondents' submissions to the contrary were based on technical matters without merit (which, if valid, should be permitted to be cured by adjournment if necessary), (iii) although the consent authority had not approved the amendment (because the Court's consent was expressly limited to 33 Solander Street), there was no necessary order in which approvals had to be obtained. The power of approval under s 28K could be exercised first. The Class 1 appeal in 2006 showed a likelihood that the Council would be willing to grant the necessary approval although no application had been made for that approval as yet, (iv) the Court and the Council in the Class 1 proceedings was satisfied that the amended development was appropriate, (v) the consent to the strata subdivision of 35 - 37 Solander Street on 19 February 2001 (DA 538/01) approved three car parking spaces on 35 - 37 Solander Street, (vi) Mr Morse did not agree with Mr Player about the inadequacy of the three car parking spaces at the rear of the driveway, and (vii) there was ample evidence of the extensive steps the applicant had taken and his readiness to proceed it the development subject to resolution of these proceedings. 123 The respondents submitted that s 28K allowed the Court to approve an amendment of a strata development contract not otherwise passed by resolution of a body corporate. The applicant had to establish a proper basis for the Court approving an amendment to the design of the development shown in the strata development contract. At the least the applicant would need to show that: - (i) the amendment would have no, or such minimal, adverse effect on the respondents so as to make the amendment reasonable, (ii) the applicant's own conduct has been reasonable, and (iii) the prejudice the applicant would otherwise suffer warranted the intervention of the Court.

[230]

150 Further, the evidence does not establish that the respondents' conduct was a material cause of the applicant's delay in progressing the 2004 development application (including by appeal if necessary). For this purpose it is necessary to leave aside the potential for confusion caused by the applicant's apparent assumption in his dealings with the respondents that Christanelle Developments could be substituted as the developer under the strata development contract. Between 20 October 2004 (the date the solicitors for the owners corporation informed the solicitors for Christanelle Developments that the owners corporation declined to provide the consent sought) and May 2005 (when the applicant amended the development application) the evidence discloses nothing of significance happening. This is so despite the fact that the next event (the 11 August 2005 notice of an extraordinary general meeting) discloses the applicant's belief that the Strata Schemes Act enabled him, by unilateral resolution, to resolve to grant all consents necessary for the carrying out of the development of stage 2. Similarly, between August 2005 (when the applicant resolved to pass all the resolutions he sought, relying on the statutory provisions relating to development concerns) and February 2006 (when the Class 1 appeal was lodged) the evidence discloses nothing of significance happening. The applicant observed that a person has no obligation to appeal against a council's deemed refusal of a development application. This is true. The relevant point, however, is the applicant knew that the strata development contract provided a date for conclusion of the development scheme in December 2007 and yet waited for more than 18 months before exercising the appeal right. Another example of inordinate delay by the applicant is available after the grant of the development consent by the Court on 3 July 2006. It took from 3 July 2006 (when the Court granted the deferred commencement development consent) until 6 December 2006 (the Council's notice of satisfaction of deferred commencement conditions (i) to (iv)) for the stormwater information to be provided and approved by the Council. This is the same stormwater information the Council identified as required in April 2006.

[250]

169 The Class 2 application referred to an (unspecified) amendment to "address inconsistency" between the concept plans and the Court consent. However, the application did not identify the amendment sought. The applicant provided draft orders during the hearing to the effect that the strata development contract be "read subject to" certain matters. Neither version would result in an amended strata development contract in a form readily capable of being understood. This is important given that an amended strata development contract has to be registered (s 28G) and would be relied upon by future buyers as setting out the rights and obligations of the developer and the proprietors (s 28I). The motions put by the applicant to the owners corporation give rise to similar difficulties. Although dismissed by the applicant as mere technicalities, an amended strata development contract will define future rights and obligations and thus the proposed amendment must be clearly identified. The motions put in this case did not clearly identify the amendment sought. The motion that the owners corporation agree "to such amendment of the strata development contract as is necessary to implement the development consent to DA 1259/2004 to demolish existing structures and construct two villas and two townhouses at 33-37 Solander Street, Monterey, upon approval of any such amendment by Rockdale City Council or the Land & Environment Court" did not identify the amendment in fact required to the contract but left it to each reader to determine for themselves the scope of what might be "necessary". The principal motion relied on by the applicant (of which notice was given on 27 November 2006 for a meeting on 8 December 2006) was also contingent on approval by the Council or the Court. No such approval had been sought or obtained when the motion was put. Approval of the Court, moreover, could only be obtained if the motion were defeated or not put within a reasonable time. The motion referred to a strata management statement when none exists for strata plan 65404. The motion represented (incorrectly) that the amendment was a development concern when s 28O(2)(b) provides to the contrary. These are not mere technicalities. The applicant also appeared to overlook the fact that no amendment relating to the Court consent as modified on 12 December 2007 has ever been put to the owners' corporation.

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Judgment (269 paragraphs)

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Cited By (2)