Owners Strata Plan 22724 v Owners Strata Plan 30403 [2012] NSWSC 1192 | Case summary

THE CHARACTER OF THE PARTIES AND THEIR LEGAL TITLE 25The Plaintiff is a body corporate of a strata scheme at 201 New South Head Road, Edgecliff. The building the subject of the scheme is known as "Edgecliff Mews". 26The Plaintiff's strata plan (SP 22724) was registered on 12 July 1985. It comprises 22 Lots, from which a variety of commercial activities (including professional offices) are conducted. None of the Lots is used for residential purposes. 27Edgecliff Mews includes a car parking area as part of its common property. 28The Defendant is a body corporate of a strata scheme at 2 New McLean Street, Edgecliff. The building the subject of that scheme is known as "Edgecliff Court". 29The Defendant's Strata Plan (SP 30403) was registered on 28 February 1986. It comprises 33 Lots. Five of those, on the ground floor, are used for commercial purposes. The remaining 28 are used for residential purposes. 30The common property of Edgecliff Court includes a car parking area. 31The land upon which the two buildings - Edgecliff Mews and Edgecliff Court - are built was formerly the subject of Deposited Plan 616602, registered on 28 May 1981. 32The Plaintiff's land was Lot 1 in DP 616602 immediately before registration of SP 22724. 33The Defendant's land was Lot 3 in DPP 616602 immediately before registration of SP 30403. 34The registered easement of which the Plaintiff's land is the dominant tenement, and the Defendant's land is the servient tenement, is recorded in a Memorandum of Transfer dated 18 August 1981 registered as dealing number S673011. 35That easement is recorded as a notification on the title to the common property in the Plaintiff's strata scheme: Folio Identifier CP/SP22724. 36It is in the following terms (with emphasis added): "Full and free right for every person who is at any time entitled to an estate or interest in possession in the land herein indicated as the dominant tenement [the land contained in Volume 14454 Folio 20] or any part thereof with which the right shall be capable of enjoyment and every person authorised by him to go, pass and repass at all times with or without vehicles to and from the land herein indicated as the servient tenement [Certificate of Title Volume 14454 Folio 22] or such parts thereof over which the right shall be capable of enjoyment for the purpose of parking on the land herein indicated as the servient tenement between the hours of 9.00am and 6.00pm not more than fifteen motor vehicles in parking spaces reasonable accessible [sic] to the rights of carriageway benefiting the dominant tenement created upon registration of Deposited Plan 616602 on such part of the land herein indicated as the servient tenement or on such part of the lowest level of any building constructed on the land herein indicated as the servient tenement as the transferor [the registered proprietor of the servient tenement] shall from time to time direct TOGETHER WITH full and free right for every person who is at any time entitled to an estate or interest in possession in the land herein indicated as the dominant tenement and every person authorised by him with any tools, implements or machinery necessary for the purpose to enter upon the land herein indicated as the servient tenement and to remain there for any reasonable time for the purpose of marking out, painting and inscribing lines and signs delineating and identifying such parking spaces as aforesaid". 37There is no dispute between the parties in the present proceedings about identification of the car spaces (15 in all) the subject of such entitlements as the Plaintiff might have. The only question is whether those entitlements are limited to the hours described in the registered easement or, conversely, whether they are available on the basis of 24 hour access. 38As has been remarked, the origins of the Plaintiff's experience of 24 hour per day access to the Defendant's car park are obscure. 39They may, with a degree of practical certainty, be attributed a time of commencement in or about early to mid 1988. 40Such certainty as there is derives largely from records of the Plaintiff; particularly minutes of the annual general meeting of the Plaintiff held on 19 September 1988, which record, inter alia, a statement to the effect that "the car parking spaces in Edgecliff Court have still not been fully let and the cost of securing the area had not been covered by the income received". At that stage, it appears, eight spaces had been let, five with payment for a full year in advance and three with payments on a quarterly basis. 41Whenever, precisely, the Plaintiff may have commenced its experience of 24 hour per day access to the Defendant's car park, there appears to have been at least some disquiet in the ranks of the Defendant about the registered easement and related topics over the next few years. 42Minutes of a meeting of the Council of the Defendant held on 3 April 1989 contain an enigmatic entry relating to "Right of Way under Edgecliff Court" suggesting concern about "interpretation of right of way and cross easements". A similar entry appears in minutes of the Defendant's Council meeting of 13 June 1990. 43An entry in the minutes of a meeting of the Council of the Defendant on 2 April 1991 suggests an ongoing controversy between the Plaintiff and the Defendant as to the ambit of the Plaintiff's rights vis á vis the Defendant's car parking area. 44Item 1 of those minutes records the following: "Following discussion, re - correspondence from 'Edgecliff Mews' - installation of a roller shutter door to restrict access through private property. IT WAS RESOLVED that the Managing Agent write to Mr J Glass of John Glass Real Estate at 'Edgecliff Mews' declining their offer of a shared ownership and operation of the roller shutter door proposed and further advise that whilst 'Edgecliff Mews' has an easement over the property of 'Edgecliff Court', 'Edgecliff Mews' should in their negotiations with other neighbours not in any way indicate that any one else has an easement over [the Defendant's] property. IT WAS RESOLVED further that the letter request the proprietors of 'Edgecliff Mews' to propose some resolution to the situation created by their easement and usage of 15 car spaces within the property of 'Edgecliff Court' which is restricted by covenant [sic] to the hours of 9am-6pm and whether or not they wish to make some arrangements for the balance of each day or whether the residents of 'Edgecliff Court' should use them outside of those hours." 45The evidence does not extend to a copy of any of the correspondence - actual or prospective - within the contemplation of this entry in the minutes. 46There is a suggestion in later minutes of the Council of the Defendant (in particular, those relating to meetings held on 10 November 1993 and 26 April 1994) that legal action relating to a "right of way" or "easement" may have been under consideration by the Defendant. However, the paper trail is too patchy to permit precise findings about that to be made. 47In substance, the evidence is silent about communications between the Plaintiff and the Defendant concerning "24 hour access" to the car park between the early 1990s and 2007 or thereabouts. There is, however, evidence of 24 hour access by the Plaintiff, and licensees of the Plaintiff, reaching back to the period 1987-1990 and thereafter (in the affidavit of Mr BMG Remond) and from 1998 (in the affidavit of Mr WB Bracey). 48Had the Plaintiff been content to establish an entitlement to equitable relief falling short of a permanent entitlement to 24 hour access to the car park, the most powerful evidence available to it may have been the fact that it appears to have enjoyed such access, with continuity extending over two decades or thereabouts, in circumstances in which the Defendant might be said to have acquiesced in its granting to third parties, for reward to itself and without any compensation or other payment to the Defendant, rights that it has described as those of a "lease" or "licence" over particular car parking spaces. 49However, that evidence might be thought to fall short of the evidence necessary to establish an entitlement to permanency in the rights enjoyed by the Plaintiff. Taken in isolation, it might be thought to establish no more than an entitlement determinable by the Defendant on notice. 50The Plaintiff grounds its claim to permanency on two allegations. The first is an allegation that the Defendant (by a person, Mr Clarkson, said to be its agent) agreed to provide 24 hour access rights to the Plaintiff in return for a contribution by the Plaintiff to the cost of works designed to provide security for the car park. The second is an allegation that the Plaintiff, in fact, made that contribution. 51Neither side of the record has been able to adduce evidence from a witness able to depose, first hand, to formation of the alleged agreement of 1988. Mr Clarkson (said by the Plaintiff to have been an agent of the Defendant and who appears, at least, to have been a "liaison person" between the Defendant and its Managing Agent) could not be located. Mr John Glass of John Glass Real Estate Pty Ltd (the Plaintiff's Strata Manager between 1986-2006) is dead. Two owners of units in Edgecliff Court at the time the alleged agreement is said to have been made (Dr H Sternberg and Ms D Landes) have deposed to circumstantial facts; there is no suggestion that they could have done more. 52The Plaintiff's case is grounded upon business records which came into existence in or about 1988. Those records, principally, come from its own archives. 53It relies upon a chain of documentation that, ostensibly, commences on or about 7 May 1987. 54The first document in that chain comprises the minutes of an Extraordinary General Meeting of the Plaintiff held on 8 May 1987, incorporating an extract from a letter dated 7 May 1987 said to have been written to the chairman of the Plaintiff by Mr Clarkson. 55The evidentiary value of the minutes, and the purpose for which the Plaintiff might rely upon them, are hotly in contest. The Defendant accepts that they are admissible under the Evidence Act 1995 (NSW) as a business record, but seeks the protection of an order under s 136 of that Act limiting the use to be made of the extracted letter. 56Section 136 provides that "[the] court may limit the use to be made of evidence if there is a danger that a particular use of the evidence might: (a) be unfairly prejudicial to a party; or (b) be misleading or confusing." 57The necessity for any s 136 order arises, ultimately, from the operation of ss 55-58 (especially s 56) of the Act, which establish a general rule that evidence that is "relevant" is admissible; define as relevant evidence that, "if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue"; and authorise the Court to draw any reasonable inference from a document the subject of a question as to relevance. See Odgers, Uniform Evidence Law (LBC, Sydney, 10th ed, 2012), para. [1.3.260]. 58Whether the content of the extracted letter could ever reasonably be acted upon as evidence of the truth of the statements set out in it, particularly in circumstances in which the letter is the subject of a hot contest, is, in my opinion doubtful. However, the Defendant ought to be given the protection of a s 136 order against that possibility, especially as the only evidence available to the Court about the terms of the letter is both secondary and incomplete. Accordingly, I proceed on the basis of an order (which I make) that, insofar as the Plaintiff's minutes purport to extract a letter dated 7 May 1987, they are not to be used as evidence of the truth of any statement said to have been contained in the letter. 59Under the heading "General Business" the minutes record the following: "THE CHAIRMAN REPORTED to the meeting that the problem of the Easement for parking by Edgecliff Mews on land owned by the adjacent property, Edgecliff Court, is currently being negotiated with Estate Mortgage on behalf of Edgecliff Court. In this regard THE CHAIRMAN TABLED A "WITHOUT PREJUDICE" LETTER addressed to himself and dated 7th May 1987, part of which stated the following:- QUOTE... "Further to our meeting regarding carparking problems at the above property and your adjacent property, "The Mews", we make the following submission which may be of some beneficial interest to both parties:

The total carparking area be sealed off with access being provided by a boom gate or roller-door.
Permission be given by the owners of Edgecliff Court to allow you the right to generate rent from the purported 15 spaces referred to under the current Easement (achievable rent $18,000 p.a.)
The owner of Edgecliff Court to agree to vary the current Easement restricting occupation in the allotted Mews spaces between 9.00am and 6.00pm. The above proposal gives guaranteed parking to "The Mews" and security for the existing parking of Edgecliff Court. With regard to sharing of costs in erecting of the security fence, it is suggested that in view of the ability of "The Mews" to generate income of approximately $18,000 p.a. the cost of the proposed security fence be shared on the following basis: 80% - Mews 20% - Edgecliff Court We further propose that quotes be obtained for securing the parking area by both parties following which a meeting should take place for agreement on cost." ...UNQUOTE THE CHAIRMAN ALSO TABLED a quote from R. Lain Peach & Associates Pty Ltd dated 8.5.87 for $17,593.00 to secure the parking area at Edgecliff Court. THE MEETING RESOLVED UNANIMOUSLY THAT the Council of the Body Corporate will proceed to arrange with the owners of Edgecliff Court for the securing of the parking area in Edgecliff Court on the basis of 80% of the cost to be paid by the Proprietors of Strata Plan 22724 and 20% of the cost to be paid by Edgecliff Court and on the condition that the body corporate of Edgecliff Mews would be entitled to derive the income for the parking spaces to which it is entitled under the Easement. THE MEETING RESOLVED UNANIMOUSLY THAT once the area was secured, the parking spaces which Edgecliff Mews Pty Ltd [sic] is entitled to would then be hired out UNDER LICENCE at a figure equating to approximately $1200 per annum per parking space and the income so derived would be paid into the Sinking Fund Bank Account of the Body Corporate. THE MEETING RESOLVED UNANIMOUSLY THAT the Council of the Body Corporate is authorised to negotiate, arrange and conclude all matters relating to the securing of the carspaces on Edgecliff Court and the letting of those spaces under licence. THE MEETING RESOLVED UNANIMOUSLY THAT Edgecliff Mews proportion of the cost of securing the car parking area on Edgecliff Court shall be raised by either pre letting the car parking spaces so secured or, if this is not practical, by a SPECIAL LEVY on the proprietors and that the Council of Body Corporate is authorised to charge this special levy if the Council deems it necessary. [Emphasis Added]" 60Although paragraph 3 of the extracted letter used the expression "vary the current Easement", subsequent consideration of the letter by the meeting is reported in the minutes in terms more generic. The minutes speak of "securing the car spaces" and "the letting of those spaces under licence". The word "securing" could refer, in context, to either or both the process of undertaking work on the Defendant's land or the process of negotiating the Plaintiff's extended use of car parking spaces on that land. The words "letting" and "licence" may be directed to prospective relationships between the Plaintiff and third party users of car parking spaces on the Defendant's land, but they are consistent with characterisation of the proposed relationship between the Plaintiff and Defendant as one of lease or licence of the car parking spaces. 61The next document relied upon by the Plaintiff is an extract from the minutes of a meeting of the council of the Plaintiff held on 27 January 1988. Those minutes contain an entry in the following terms: "Mr Binetter [who might be inferred to have been an ordinary member of the Council] then asked about the car parking under Edgecliff Court. Mr Glass [the chairman of the Council] said that he had been notified by RL Peach, the contractors, that they had received Council approval. We are now waiting for an up-to-date quote before the work can proceed." 62Then came a document which the Plaintiff's counsel described as the most significant evidence in support of its claim. It is a letter dated 11 February 1988 addressed by the Secretary of the Plaintiff to "Mr G Clarkson, Estate Mortgage[,] 177 Elizabeth Street, Sydney. 2000". It is in the following terms: "Following our telephone conversation of this morning, I am writing to confirm the agreement of the Body Corporate of Strata Plan 22724 to the division of the cost of the securing of the parking area under Edgecliff Court on a 80/20 basis. This was unanimously approved at a general meeting of the Body Corporate on the 8th May, 1987. Edgecliff Mews, Strata Plan 22724, will be entitled to the exclusive use of 15 car parking spaces on a 24 hour 7 day a week basis and will receive all income derived from the letter out under license of those spaces. Edgecliff Mews, Strata Plan 22724 will bear 80% of the cost for securing the area and agrees to the quote submitted by RJ Laing-Peach & Associates Pty Ltd of $19,284-00 for the work to be completed. I look forward to receiving your written approval to go ahead so that the contractor can be instructed to proceed." 63There is no evidence of the terms of the telephone conversation to which this letter refers, save as might be inferred from the letter itself. The evidence before the Court does not include a copy of the "quote" or any "written approval" emanating from Mr Clarkson. Whether the letter was in fact sent on 11 February 1988 might be the subject of debate, but I am prepared to infer that such a letter was sent to Mr Clarkson at about that time. That inference is supported, at least in general terms, by the fact that security work was undertaken at a time proximate to the date of the letter. 64The language of the letter was not, in terms, directed to a "variation" of the registered Easement. At its highest, the language deployed - "exclusive use" of car parking spaces - is consistent with characterisation of the subsequent arrangement between the Plaintiff and Defendant as one of lease or licence. 65The next document relied upon by the Plaintiff is described as "minutes of the informal meeting" of the Council of the Plaintiff "held by phone during the week of the 7th February to the 13 February 1988". It appears, in substance, to be a memorandum of a succession of telephone conversations between the Plaintiff's secretary and members of the Council. It is in the following terms: "The secretary, Lee Tanabe, discussed by phone with each of the council members, John glass, Judith Glass, Ramzi Fayed and Emil Binetter, the quote received from R. Laing-Peach and Associates for the securing of the car park area under Edgecliff Court. All the members agreed that the quote of $19,284-00 should be accepted. Emil Binetter offered to obtain another quote from a different contractor to ensure that the quote from R. Laing-Peach was reasonable. Mr Binetter did this and reported to the secretary that the quoted price was fair and suggested that we proceed with R. Laing-Peach and Associates as contractors. The secretary wrote to R. Laing-Peach and Associates asking them to proceed with the work as per the quote." 66The evidence before the Court does not extend to a copy of any letter written by the Plaintiff accepting the "quote". 67There is no direct evidence of any payment by the Plaintiff (or, for that matter, by the Defendant) for work done at or about this time to secure the Defendant's car park area. There is no record of any payment by the Plaintiff to the Defendant referable to such work. However, there is no real dispute that work of that nature was in fact done. 68The next document relied upon by the Plaintiff is another set of "minutes of an informal meeting" of the Council of the Plaintiff "held by phone", this time during the period between 28 April to 6 May 1988. Those minutes include the following: "A letter had been received from the contractor for the securing of the car parking spaces under Edgecliff Court regarding complaints from the Department of Health at Woollahra Council re the new position of the garbage bins and the difficulty in manoeuvring them for garbage collection. Although the positions of the security screens had been approved by the Building Department, the Health Department is now requesting further work to be done in order to facilitate removal of garbage. A quote was received by the contractor RJ Laing-Peach for $1888-00 for the additioal [sic] work requested. The members of council agreed that the work would have to be done and agreed to pay 80% of the amount quoted with the body corporate of Edgecliff Court to pay the remaining 20%." 69The accounts of the Plaintiff for the year ended 30 June 1988 (prepared by chartered accountants on or about 1 September 1988, but not audited) include reference to an Outgoing of $18,801.20 described as referable to "BODY CORPORATE COSTS IN \ [sic] BLDG SECURITY CAR PARKING AREA". 70The figures do not quite add up. However, that entry should be accepted as establishing that the Plaintiff did, in fact, pay at least the sum of $18,801.20 for the purpose of effecting work on the Defendant's land. 71That conclusion is supported by reference to the minutes of the Annual General Meeting of the Plaintiff held on 19 September 1988. Those minutes refer to the outgoing of $18,801.20 as "an unexpected extra expense [for the Plaintiff] in the securing of the car park of Edgecliff Court for the benefit of Edgecliff Mews". 72Immediately following that statement the minutes lament that the Plaintiff had experienced difficulty in letting out the car parking spaces in Edgecliff Court and "the cost of securing the [car parking] area had not been covered by the income received." 73A later statement in the minutes records an explanation from the Plaintiff's secretary that "the income received for the parking area had been banked during the 1987-88 period, and had been used for an initial payment of the invoice from the building contractor." Special levies were imposed upon unit holders in the Plaintiff's Strata Plan to "enable the Treasurer to pay the outstanding amount owing to the building contractor for the work done in securing the Edgecliff Court parking area", noting that "[thereafter] all income derived from the car park area would help to build up a surplus in the accounts" of the Plaintiff. 74Although the evidence before the Court does not permit there to be a precise reconciliation between the sum of $19,284.00 referred to in the Plaintiff's letter dated 11 February 1988 as the "quote" for work to be done (or 80% of that figure) and any payment made by the Plaintiff referable to that work, the evidence is tolerably clear that work contemplated by the letter dated 11 February 1988 was done and, substantially if not wholly, paid for by the Plaintiff. 75There is a live issue in the proceedings about whether Mr Clarkson had any authority to act on behalf of the Defendant. There is nothing in evidence, from the Defendant's records or otherwise, that bears directly upon the nature or scope of any authority he may have had to act on behalf of the Defendant in dealings with the Plaintiff about the car park. 76However, the Defendant's records do indicate that, at about the time that work was done in securing the Defendant's car park, Mr Clarkson was an active participant in the conduct of the Defendant's internal affairs and that, on at least one occasion, he participated in discussion about the car park. In minutes of a meeting of the Council of the Defendant held on 6 June 1988 is an entry, under the heading "General Business", that reads: "G Clarkson advising Meeting of the security gates". 77Minutes of meetings of the Defendant and its Council adduced in evidence confirm that Mr Clarkson was actively involved in the conduct of the Defendant's internal affairs from at least 19 August 1986 until 10 August 1988 or thereabouts. 78Minutes of a general meeting of the Defendant held on 19 August 1986 record that Mr Clarkson moved that the minutes of the Inaugural General Meeting of the Defendant dated 3 March 1986 be confirmed as a true and correct record. 79At the first annual general meeting of the Defendant, held on 25 November 1987, he was elected to the Plaintiff's Council. 80Minutes of a council meeting held on 9 May 1988 record the following entry (without any express reference to Mr Clarkson, who is recorded to have been present): "SECURITY TO UNITS: (a) IT WAS RESOLVED that new locks to doors adjacent to automatic garage doors be keyed alike to main front door and welded mesh around lock to prevent opening from outside. It was also suggested to seek quotes for a wrought iron grille to the steps to the commercial parking area. (b) Access door from garage to foyer to be keyed alike to main front door..." 81The same minutes record, as the last item of business: "G CLARKSON resigned as liaison person between the Body Corporate and the Managing Agent. ..." 82On 10 August 1988, as recorded in minutes adduced in evidence, Mr Clarkson attended both a general meeting of the Plaintiff, and a meeting of its Council, in succession; but those attendances have no manifest significance beyond the fact that they occurred. 83The fact and timeliness of Mr Clarkson's participation in the affairs of the Defendant, in combination with the facts that work was done on the Defendant's land and the Plaintiff did at about the same time begin to enjoy extended rights referable to the Defendant's car park, support an inference that Mr Clarkson did have, at least in a broad sense, authority to bind the Defendant in dealings with the Plaintiff. 84However, an officer of the Defendant's current strata Managing Agent (Mr JT O'Neill) has deposed to having searched records of the Defendant, in vain, for any resolution of the Defendant purporting to vary the registered easement or to authorise any person to enter into a varied arrangement. 85The Plaintiff's case is that, as evidenced by its letter dated 11 February 1988 addressed to Mr Clarkson, the operative agreement alleged to have been made between the Plaintiff and the Defendant for the Plaintiff to enjoy extended rights referable to the Defendant's car park occurred in a telephone conversation on that day between the Plaintiff's secretary and Mr Clarkson. 86Even if (as I have found) Mr Clarkson had some form of authority to bind the Defendant, separate consideration needs to be given to the nature, scope and limits of any agreement that he may have reached with the Plaintiff. 87There are several reasons why this must be so. 88First, the evidence stops short of establishing that Mr Clarkson had authority - actual or ostensible - to bind the Defendant to an agreement to grant permanent property rights to the Plaintiff over the Defendant's land. An inference that he was authorised to act on behalf of the Defendant at all depends largely on the fact that, as events unfolded, the Plaintiff expended money on security works on the Defendant's land after contact with him and, thereafter, it enjoyed extended access to the car park. Attribution of authority to him involves an ex post rationalisation of the same surrounding circumstances from which the existence, nature, scope and limits of any agreement between the Plaintiff and the Defendant might be inferred. 89Secondly, the Plaintiff's letter dated 11 February 1988 cannot stand as a complete record of any agreement. It begins with a reference to a telephone conversation, the precise terms of which may not be recorded in the letter, and it concludes with a request for "written approval" that may or may not have been given, in terms that may or may not have accorded with the "agreement" referred to in the letter. 90Thirdly, the terms of the letter are consistent with any entitlement the Plaintiff may have obtained to extended use of the Defendant's car park being limited to nothing more than a licence arrangement for an indefinite period, not extending to the grant of anything akin to a variation of the registered easement. Although the contentious letter extract of 7 May 1987 spoke of a "submission" that it may be beneficial to both parties if the Defendant were "to agree to vary the current Easement", the Plaintiff's letter dated 11 February 1988 did not use language suggestive of a "variation" of the Easement. It spoke, instead, of the Plaintiff acquiring an entitlement "to the exclusive use" of car parking spaces on a 24 hour basis, coupled with an anticipation of receipt of income derived from "the letting out under licence" of those spaces. It was silent as to the duration of any such entitlement. 91Fourthly, ss 26 and 28 of the Strata Titles Act 1973 (NSW) operated to require the unanimous consent of the owners of lots in the Defendant's Strata Plan to be obtained if there was to be any diminution of their interest in the common property of which the car park formed part, and there is no evidence of any such consent being sought or obtained or of any belief on the part of the Plaintiff (itself constrained by the Act) believing that it had been. 92Fifthly, there is no evidence before the Court that suggests that, at any time since 11 February 1988, steps have been taken, or sought to be taken, to "vary" the registered easement, or otherwise to document any agreement between the Plaintiff and the Defendant referable to extended use of the car park. 93The absence of any such evidence is not determinative against the Plaintiff - bearing in mind the possibility that it may have taken refuge in an assumption that it had a settled entitlement to rely upon an existing, albeit informal arrangement. However, it is not entirely irrelevant to a consideration of whether the Plaintiff had a belief, or expectation, that it would receive something more than a licence to use the Defendant's car parking area on an extended basis. Where a clamour of demands for a formal grant of a larger entitlement might reasonably have been anticipated, the Plaintiff's silence does not assist the case it presently seeks to make. 94Whether any arrangement between the Plaintiff and the Defendant for the Plaintiff, and its licensees, to enjoy extended access to the car park could have taken the form of a "variation" of the registered easement is, perhaps, a topic for debate. The Defendant contends that there was no capacity, in New South Wales, to vary easements by agreement in 1988 and, in support of that submission, it notes that s 47(5A) of the Real Property Act 1900 (NSW) did not come into operation until 1996. It also suggests (by reference to Re Ellenborough Park [1956] 1 Ch 131 at 175, discussing Hill v Tupper (1863) 159 ER 51) that the "variation" of the easement for which the Plaintiff contends could have invalidated the easement because it incorporated a right to "rent out" car parking rights to third parties, and an easement incorporating such a right could not be said to have been for the "benefit" of the Plaintiff's land as the dominant tenement. 95 Speculation of this nature is not necessary if (as I find) the belief of the Plaintiff in and after 1988 was that, whatever the precise terms of the arrangement between the parties at that time, it was an arrangement bearing the character of nothing more than a licence, unaccompanied by any proprietary interest in the Defendant's land operative beyond the terms of the registered easement. It had no greater expectation. 96It is not suggested, on either side of the record, that the Strata Titles Act 1973, or some other legislation, has at any material time precluded the grant of such a licence. By virtue of the Conveyancing Act 1919, s 23C, a licence coupled with a grant of an interest in land (should that have been the nature of the licence the Plaintiff believed it had) would have been required to be in writing (Smith v Tamworth City Council (1977) 41 NSWLR 6880 at 695G) and, in the absence of writing, would (by virtue of s 23D of that Act) have had effect only as an interest at will. 97Nevertheless, insofar as the arrangement made between the parties in 1988 made no express provision for its duration, I infer that it was the belief of the Plaintiff - then and in after years - that it was to be determinable by either party on reasonable notice, bearing in mind (as illustrated by Rudi's Enterprises Pty Limited v Jay (1987) 10 NSWLR 568 at 575F-576B) that the question "What is a reasonable time?" must be decided at the point when the lapse of time is said to have occurred, rather than at the date the arrangement was made. 98If (contrary to my finding) the Plaintiff held a belief that it had, or an expectation that it would acquire, more than a licence to use the Defendant's car parking area 24 hours a day, for an indefinite time, determinable by either party on reasonable notice (and unaccompanied by any proprietary interest in the Defendant's land operative beyond the terms of the registered easement), then that belief or expectation was unreasonable. 99In characterising any such belief, or expectation, as unreasonable I rely upon the five factors identified as telling against its existence. 100I point, further, to the fact that the amount paid out by the Plaintiff for construction of security works on the Defendant's land was no more than the Plaintiff expected to recoup from "letting out" car parking spaces "under licence" within a year or so. Although the process of letting out spaces did not initially proceed with the despatch for which the Plaintiff hoped, it appears to have recouped its outlay within a comparatively short time and, it can be inferred, many times over in the years since 1988. 101There is evidence to suggest that, in the year to June 2011, it received from the 15 car spaces $32,769.00 net of expenses. How much of that amount might be attributable to the extended hours access enjoyed during that period was not explored. 102An additional, relevant factor may also, arguably, be - as is common ground - the fact that the Plaintiff has made no contribution to the cost of maintenance of the Defendant's car park since 1988. I infer from this fact that, in 1988, the Plaintiff had no intention of making any such contribution. Of course, in itself, this factor cannot be attributed much weight. If, as the Plaintiff now contends, it purchased an enduring property right, it was open to it to have done so on the basis of a lump sum payment in return for the grant of that right. 103If (contrary to my findings) the Plaintiff, at any time in 1988, held a belief that it had, or an expectation that it would acquire, a proprietary interest in the Defendant's land operative beyond the terms of the registered easement, the evidence falls short of establishing that the Defendant knew of that belief or expectation. 104The highest the Plaintiff's evidence can reasonably be said to have reached is that it had dealings with Mr Clarkson in relation to an arrangement for extended access to the Defendant's car park, at a time when Mr Clarkson was an active participant in the Defendant's internal affairs, a member of its Council and, apparently, a "liaison person" between the Council and the Defendant's own Strata Manager. 105Weighed against that are two categories of evidence. The first comprises minutes of meetings of the Defendant and its council. The second is evidence from two people who owned lots in the Defendant's strata scheme in 1988. 106The Defendant's minutes contain an oblique, inconclusive entry (in relation to a meeting of the council of the Defendant on 6 June 1988) to the effect that Mr Clarkson had advised the meeting "of the security gates". The minutes are otherwise, materially, silent. 107Given the formalities attaching to administration of a strata scheme, and the keen interest one might expect lot owners would have in any suggestion of a grant of rights to the Plaintiff beyond the terms of the registered easement, one might reasonably expect any arrangement of the type for which the Plaintiff now contends to have been the subject of a detailed entry in contemporaneous minutes of the Defendant. 108The absence of any such entry is, in my assessment, probative against the existence of any grant to the Plaintiff of a property right in the Defendant's land extending beyond the terms of the registered easement. 109Of the two witnesses relied upon by the Defendant (to depose to their lack of any knowledge of an agreement to vary the terms of the registered easement, or to grant extended parking rights to the Plaintiff, notwithstanding their active involvement in the affairs of the Defendant in 1988), it is necessary to focus on only one, Ms Landers. The other (Dr Sternberg) was unavailable to be cross examined on his affidavit and, although that affidavit was read (with a grant of leave under the Uniform Civil Procedure Rules 2005 (NSW), r 35.2), I do not attribute significant weight to it except insofar as it annexes non-controversial records of the Defendant. 110Ms Landers was available for cross examination on her affidavit. She was cross examined insofar as she deposed to an absence of any recollection of Mr Clarkson claiming that he had negotiated (or had authority to negotiate) any variation of the registered easement. She was not, however, cross examined on her general denial of any knowledge of either an agreement to vary the terms of the registered easement or any agreement to grant extended parking rights to the Plaintiff. I accept her evidence as probative against the existence of any agreement between the Plaintiff and the Defendant (whether made through the agency of Mr Clarkson or otherwise) for the grant to the Plaintiff of a property right in the Defendant's land extending beyond the terms of the registered easement. 111Mr Clarkson, in particular, might have been able to shed light on the events of 1988, but no evidence was adduced from him. Evidence was adduced from an officer of the current Strata Managing Agent for the Defendant (Mr JT O'Neill) that, having made enquiries, he was unable to identify, or locate, Mr Clarkson. Dr Sternberg deposed to having "a vague recollection of a Mr Greg Clarkson" from 1987/1988 or thereabouts, but nothing more. Ms Landers acknowledged references to Mr Clarkson in minutes of the Defendant, but her knowledge of him beyond that (if any) was not explored in the evidence. 112The absence of evidence from Mr Clarkson was unaccompanied by any submission, on either side of the record, that the Court should draw an inference, adverse to the other, by reference to Jones v Dunkel (1959) 101 CLR 298. No such inference is drawn. 113All things considered, though, in my assessment the evidence points to the grant by the Defendant, to the Plaintiff, in 1988, of a licence (unaccompanied by any interest in land) for an indefinite term, determinable by either party on reasonable notice. 114The focus for attention, then, turns to whether the Defendant has, in fact, given the Plaintiff reasonable notice of its requirement that the Plaintiff, and its licensees, cease to use the car park outside the hours between 9.00am and 6.00pm. If it has, that fact would strongly militate against any grant of relief to the Plaintiff even if (contrary to my findings) the Plaintiff were to be taken to have established all the elements necessary for an equitable estoppel. 115On that score, I find that the Defendant unequivocally notified the Plaintiff, no later than September 2008, of its intention to terminate the Plaintiff's use of the car park outside the hours of 9.00am - 6.00pm specified in the registered easement. 116I find, further, that the Defendant maintained that position up to and including 18 June 2012, when it finally acted upon its notification; throughout the period between September 2008 and June 2012, inclusive, the Plaintiff fully appreciated that the Defendant persisted in its demand that the Plaintiff, and licensees, cease to use the car park "after hours"; and the fact that the Defendant, in deference to the Plaintiff and the possibility of fruitful negotiations, postponed implementation of its 2008 notification did not constitute a withdrawal, or prejudice the efficacy, of the notification. 117The evidence establishes, in particular, that, from a time no later than 12 September 2008 or thereabouts, the Plaintiff was aware that the Defendant proposed to restrict its access to the car park to the hours between 9.00am and 6.00pm. By a letter of that date, the solicitors for the Plaintiff (Segal & Associates) responded to a letter dated 1 September 2008 addressed by the Defendant's strata manager (O'Neill Strata Management Pty Limited) to the Plaintiff's strata manager (Spencer & Servi First National) in which appeared a plain statement of the Defendant's intention to limit access to the car park, with effect from 15 September 2008. 118In their letter dated 12 September 2008, Segal & Associates referred to a letter dated 26 June 2007 said to have been written by the Plaintiff's chairman (Mr Bracey) asserting an entitlement under "an agreement made in 1988" to 24 hour seven days a week usage of the car park. 119Neither side of the record has located a copy of any letter dated 26 June 2007. Whether such a letter was in fact written must remain the subject of conjecture. However, the fact that Segal & Associates referred to it more than once in their 2008 correspondence with the Defendant's strata manager lends aid to its existence. The fact remains that a copy of it cannot now be located. When cross examined, Mr Bracey had no independent recollection of it, and he was reluctant to accept that the parties were in correspondence about the car park in 2007. 120There is, in my assessment, insufficient evidence to support a finding that the parties were, materially, in correspondence about the car park in 2007 or that the Defendant had, in that year, notified the Plaintiff of an intention to restrict the Plaintiff's use of the car park to the hours specified in the registered easement. 121Plainly, however, in September 2008 the Plaintiff was aware that the Defendant was at that time seeking to terminate any arrangement whereby the Plaintiff had "after hours access" to parking spaces in the Defendant's building. That much was expressly accepted by Mr Bracey in the course of cross examination. 122The Defendant's implementation of its expressed intention to curtail the Plaintiff's extended access to the car park was postponed, from time to time, between September 2008 and June 2012. 123During that period, representatives of the Defendant, at least initially, requested the Plaintiff to produce evidence of the "agreement" of 1988 referred to in the letter of Segal & Associates dated 12 June 2008. See the letters of O'Neill Strata Management Pty Limited to Segal & Associates dated 26 September 2008, 16 October 2008, 26 October 2008 and 1 December 2008. Whether they, at all times, persisted in a request that remained unsatisfied is unclear from the evidence. 124By a letter dated 30 July 2009 addressed to the Plaintiff's strata manager (Spencer & Servi First National) O'Neill Strata Management Pty Limited notified the Plaintiff of the Defendant's intention to limit the Plaintiff's access to the car park to the hours of 9.00am - 6.00pm, with effect from 10 August 2009. 125That elicited a letter dated 5 August 2009 from Segal & Associates asserting, again, an "agreement made in 1988". The effect of that "agreement" was said to have been that "restrictions" as to the time during which the Plaintiff could access the car park "would no longer apply". The Plaintiff asserted an entitlement "to seek a variation of the registered easement by removal of the time of usage pursuant, inter alia, to s 89 of the Conveyancing Act"; threatened legal proceedings in which injunctive relief, damages and costs would be sought against the Defendant; and noted what was said to be a recent agreement between the parties to defer all action for the time being "to allow discussions between the parties to continue". Further correspondence, ancillary to that letter, took place over ensuing weeks. 126There appears, then, to have been a break in the parties' formal correspondence until September 2011, when, by a letter dated 9 September 2011, the Defendant's solicitors (the firm known as David Le Page) wrote to Segal & Associates seeking to advance negotiations towards conclusion of an agreement for the Plaintiff to make a contribution to the expenses of maintaining the car park, if not providing an economic return to the Defendant. 127On 20 December 2011 Dave Le Page sent a follow up letter to Segal & Associates. That letter noted that no reply to the letter of 9 September 2011 had been received. It continued: "In the event that we do not receive a prompt response our client [the Defendant] will have to consider limiting access by your client [the Plaintiff] to its garage in circumstances where the costs of that use are not being met." 128David Le Page sent a further follow up letter on 19 March 2012. It noted an absence of any response to either the letter of 9 September 2011 or that of 20 December 2011. It then recorded the following: "As foreshadowed in our letter of 20 December 2011, and having regard to the failure of your client [the Plaintiff] to agree to an equitable arrangement for the sharing of expenses related to your client's use of the common property garage [of the Defendant], we have been instructed to notify you that as and from 1 April 2012 the hours of access to the commercial car spaces [on the Defendant's land] will be limited, as per the terms of the registered Easement, to 9.00am to 6.00pm". 129That elicited a response from the Plaintiff, via Jane Crittenden (its current solicitor), in the form of a letter dated 30 March 2012. 130That letter particularised the "agreement" of 1988 in the following terms: "... on 11 February 1988, it was agreed by the respective strata schemes that [the Plaintiff] would contribute 20% [sic]of certain costs of securing the parking area and pay $19,284.00 for certain works to be carried out, as consideration for [the Defendant] permitting [the Plaintiff] to use the fifteen parking spaces 24 hours per day, seven days per week. A letter reflecting this agreement, dated 11 February 1988, is enclosed." 131The letter went on to hold out the prospect of a negotiated outcome to the parties' dispute and foreshadowed the possibility of an application being made by the Plaintiff for the grant of an easement under s 88K of the Conveyancing Act permitting 24 hour access to the parking spaces. 132On 17 May 2012 David le Page responded to Ms Crittenden's letter in terms that denied the Plaintiff's claims of entitlement, confirmed a preparedness to entertain commercial negotiations and gave notice that, in the absence of a concluded agreement between the parties, the Defendant would terminate the Plaintiff's extended access arrangements on 18 June 2012. 133On 15 June 2012 O'Neill Strata Management Pty Limited notified the Plaintiff, by an email addressed to the Plaintiff's strata manager and Ms Crittenden, that the Plaintiff's access to the car park would be limited to the period between 8.45am and 6.15pm each day as from 18 June 2012. 134That "final notice" was acted upon, leading to the Plaintiff's institution of these proceedings. 135The evidence includes a sample of the form of licence granted by the Plaintiff, from time to time, to third party users of the car park. It is styled, "Commercial Lease". Its one year term expires on 1 April 2013, with a monthly "tenancy" holding over provision. 136During the course of the hearing, I invited the Plaintiff to adduce evidence of the terms of all current licences, if so advised, in support of any contention that the existence of third party entitlements was a factor militating in favour of a grant of equitable relief to the Plaintiff. That invitation was not taken up. The parties were evidently content to proceed on the basis of the single, sample document. 137Clause 18 of that document provides for "the Lease" to be determinable by either party to it on seven days notice "[if] something happens to the Premises [defined as an identified car space] so that the whole or a substantial part can no longer be occupied and the parties are in no way responsible". 138The Defendant contended, and the Plaintiff did not dispute, that: (a) the Plaintiff's entry into all its current licences occurred at a time when it was on notice that the Defendant requires the parties to adhere to the hours limited by the registered easement; and (b) clause 18 would entitle the Plaintiff, and licensees, to determine those licences on 7 days notice if the Court were to decide these proceedings in favour of the Defendant (and the Defendant, by implication, were to persist in its insistence that the easement hours be maintained). 139In these circumstances, I accept that the existence of car park licences granted by the Plaintiff in favour of third parties offers no impediment to the Defendant's stated intention of holding the Plaintiff to the terms of the easement.

CONCLUSION 140The Plaintiff has failed to make out the elements of a proprietary estoppel, with the consequence that its claim for equitable relief must fail. It has not established the requisite states of mind to be attributed to itself and the Defendant. Nor has it established unconscionability on the part of the Defendant. 141The Summons must be dismissed. 142Prima facie, the Plaintiff should pay the costs of the proceedings on the ordinary basis, costs following the event. 143An order that the Plaintiff pay the costs of the proceedings on that basis will be made unless an application is made for an alternative form of order.

Owners Strata Plan 22724 v Owners Strata Plan 30403

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (4 paragraphs)

Parties

Legislation Cited (5)

Cases Cited (16)