Plaintiffs v Defendants

1 The plaintiff parties to this proceeding are the Owners Corporation Plan No. SP020966P (Owners Corporation or OC) of a 22‑storey apartment tower on land at 481 St Kilda Road, Melbourne, which was named Parkside (Parkside or the 481 St Kilda Road Land), together with Mrs Virginia Rogers and Mr Anthony Browne, who are current unit owners in Parkside. Both Mrs Rogers and Mr Browne are part of the OC committee, and Mrs Rogers is also Chairperson of that committee.

2 The principal defendant is Memart Investments Pty Ltd (ACN 004 325 562) (Memart). Memart is the present owner of the adjoining land at 479 St Kilda Road, Melbourne (the Memart Land or 479 St Kilda Road Land) upon which is now erected a multi‑level office block together with an underground car park.

3 The second defendant is the Registrar of Incorporated Associations (Registrar). The Registrar is a party to these proceedings because the matters in dispute concern an incorporated association, Parkside Tennis Club Inc (the Club), now deregistered. The Registrar has taken no part in the proceedings, having advised the Court that this would be the position, according to the usual practice.

4 Parkside and the land upon which the apartment tower and facilities are built lies between St Kilda Road and Fawkner Park. It is an attractive location and is in a popular and highly sought after area, for both residential and commercial development. The adjoining 479 St Kilda Road Land is also within this attractive location. At some time in the mid‑1980s, around 1984, Glenvill Homes constructed a 22‑storey apartment tower on the land at 481 St Kilda Road which, as indicated previously, was named Parkside. It is said to have been marketed to 'discerning people' as embodying a lifestyle befitting those in London, Paris and New York.[1] The marketing material referred to 'Luxury Facilities' that included a 'full size tennis court, swimming pool, sauna and reception room for large scale entertaining'.[2] It appears that Mr Warson, a property developer and founder of Glenvill Homes, himself, or an associated entity of his, acquired a unit at Parkside as he was an early committee member of the OC and his name appears in that capacity in some of the early documents.[3]

5 The tennis court referred to in the early marketing material was in a different location to the one which is the subject of the current dispute. The former tennis court (Former Tennis Court) straddled 479-‍481 St Kilda Road and is depicted in the following aerial photograph taken in 1986:[4]

At this time, as the photograph indicates, in addition to hosting a large portion of the Former Tennis Court, the land at 479 St Kilda Road appears to have been mostly used as a car park.

6 In around mid-1986, Mr Warson began to progress the sale and development of the site at 479 St Kilda Road, on which it was intended to construct a multi‑level office block together with an underground car park.[5] It appears to be common ground that it was apparent from the outset that the development would involve a new building to be situated close to the boundary of the Former Tennis Court. It was also common ground that the Former Tennis Court would need to be removed so an underground car park could be built, and thereafter be replaced with a new tennis court. It was also apparent that the office tower would include noise‑producing air conditioning plant and equipment, and that the construction process itself would entail noise, including over weekends, and the inability to use the new tennis court for a period of time.[6]

7 The OC and apparently some Parkside unitholders (Parkside Proprietors) intended to oppose the development as originally proposed.[7] The OC retained town planning experts (A T Cocks & Partners Pty Ltd) and solicitors (Ellison Hewison & Whitehead - later Minter Ellison), to represent them in their dealings with the developer and other bodies.[8] In order to achieve the development, Mr Warson caused the corporate owner[9] to convey the land to Hooker Corporation Limited (Hooker) on the basis that one of Mr Warson's companies would then build the office tower.[10] As Memart contends and, again, this appears to be common ground, in the events that followed, the OC and the Parkside Proprietors proved themselves to be sophisticated and hard‑nosed negotiators who obtained, on any measure, a good outcome for their efforts. I will return to both these negotiations and their outcomes later in these reasons.

8 The development of the 479 St Kilda Road Land, unsurprisingly, had implications for Parkside, particularly because until about 1987 the Former Tennis Court was available for use. The plaintiffs emphasise that the Former Tennis Court was stated to have been constructed for the exclusive use of the Parkside Proprietors from time to time,[11] and was in fact used by the Parkside Proprietors. For example, it is said that the OC's 'House Rules' from March 1985, identified as being the first edition of such rules, made provision for the booking of the tennis court for use by the Parkside Proprietors, and set out rules for its usage, including that appropriate shoes must be worn, a maximum of four guests could use the tennis court at any given time, children under 14 years of age must be supervised and no dogs were permitted on the tennis court.[12]

9 As events turned out and, as explained in the review of the 1980s history of these two pieces of land, the development of the 479 St Kilda Road Land proved not to be a residential development which might have seen the Former Tennis Court complementing two adjoining residential apartment blocks conveniently accessible to each block. This was not, however, what happened as the 479 St Kilda Road Land has constructed upon it, among other things, a 10-storey office building, two basement car parks, a lift, a mechanical services plant housing room, and the substantial area of a tennis court which sits atop the basement.[13] In this context, the plaintiffs submit that, in the period relevant to this dispute, the 479 St Kilda Road Land has always been used for commercial reasons or purposes and never used for residential purposes.

10 The 'relocation' of the tennis court involved the removal of the Former Tennis Court and the rebuilding of the new tennis court above the basement car park serving the office building (Current Tennis Court). As a result of this relocation, the Current Tennis Court is substantially located on the 479 St Kilda Road Land, with only a relatively small area - being a strip along the southern end of the court - constructed on the Parkside Land. The Current Tennis Court crosses the title boundary of the two properties and projects onto the Parkside Land by approximately two metres (comprising approximately one tenth of the tennis court).[14] The Current Tennis Court was constructed by the 479 St Kilda Road Land developer and is enclosed by a chain mesh fence (Tennis Court Fence).[15] There is also a garden adjacent to the Current Tennis Court (Garden),[16] which is also enclosed by the Tennis Court Fence along the western boundary.

11 Access to the Current Tennis Court was, until more recent times, only available from the Parkside Land. It appears to be common ground that neither Memart, nor its predecessors in title, have used the tennis court or the Garden.

12 Relocation of the tennis court involved negotiations between the OC and the Parkside Proprietors and the developer and against the background of opposition to the office development by some of the Parkside Proprietors. Memart highlights in its submissions various aspects of these negotiations leading up to the Agreement to Lease and Lease of the Current Tennis Court.

13 The results of these negotiations were summarised by the OC committee in an undated newsletter sent sometime after the negotiations appear to have been substantially completed, demonstrating, as Memart observed, how pleased they were with their efforts:[17]

RECONSTRUCTION OF TENNIS COURT & DEVELOPMENT OF NEW GARDEN AREAS

These projects, together with earlier negotiations with Hooker's occupied considerable time and attention over the year, however it is pleasing and rewarding to see that our new facilities are now virtually completed and able to be enjoyed. The only outstanding matters are the installation of the pergola and the completion of the barbecue. A change in design required submission to the council for a building permit.

Initially, it was considered (in some areas) that a substantial part of the costs (excluding the reconstruction of the tennis court) would have to be carried by the Body Corporate, however lengthy negotiations resulted in the Hooker Corporation agreeing that they would not only re-install the court, with fencing as required to the east boundary but that in addition, they would:

Construct both the new lower garden and the upper garden areas to the total requirements of the Body Corporate:

Install full fencing to all areas required by us:

Re-locate the fence on the west side of the tennis court and install draw nets, thus putting this garden inside our court and not behind the fence:

Install barbecue facilities and a pergola to our design:

Construct a comprehensive drainage system to the tennis court and both new garden areas, including automatic sprinkler systems:

Provide garden furniture to our requirements:

Agree to increase the weekly compensation payments of $2,000, during the time that the court was not playable, to $4,000 per week from August 28.

And of course all legal expenses incurred during these lengthy negotiations are to Hooker's cost.

I believe we have come out of the project very successfully and our property has appreciated as a result of these substantial improvements.

14 The events which led to the negotiated outcomes between the parties are summarised in Memart's submissions in a manner which does not appear to be controversial. These events, some documented and some not, are relevant background to the proceeding. It is to these events which I now turn, on the basis of these submissions by Memart,[18] but also those by way of further background provided by the plaintiffs in their submissions.[19] These events are conveniently summarised by Memart as follows:[20]

1. By 7 August 1986, negotiations had already progressed such that there appears to have been some agreement that the old tennis court would be demolished to allow for the construction of an underground carpark, and that the developer would pay to the 'Body Corporate' compensation of $2,000 per week until a new tennis court was erected. The developer had also agreed to offer a lease over the new tennis court and a 'further strip of land to the boundary of the adjoining property'. However, it appears that the parties were still in disagreement regarding the maximum height of the office tower and the precise location of the tennis court and its proximity to the new building. The OC committee pushed back on the developer and made demands that the building be at least 20 feet away from the old tennis court fence and that the office tower was not to increase beyond 10 storeys.[21]
2. By 3 September 1986, it appears that Mr Warson and the OC committee had reached substantial agreement 'After considerable negotiation'. This included a 99-year lease for nominal rent 'over some land on the adjoining site consisting of a corridor parallel to the tennis court and not less than 5.6m wide plus a small square of land enclosed by this corridor, the tennis court, the Fawkner Park boundary and the boundary of No 477 St Kilda Road.' The parties were also in agreement that a new tennis court would be completely reconstructed at the developer's expense, during which time the OC would continue to receive the sum of $2,000 per week as previously agreed.[22]
3. At this point, it was intended that the arrangements between the parties be reflected in three separate agreements: (1) an agreement covering the $2,000 per week compensation; (2) an 'agreement to lease the tennis court and adjoining land'; and (3) 'the detailed lease agreement itself.' The OC committee instructed its solicitors, Ellison Hewison and Whitehead, to draw up the legal documents. The OC committee notified residents that, as soon as the agreements were finalised, copies would be made available 'for examination by the unit holders prior to signature.'[23]
4. However, from early on the OC committee was concerned about the personal taxation liabilities that might be imposed on residents arising from the compensation to be provided by the developer. In an undated circular to residents[24] which seems to have been sent after 30 June 1988 (Tax Circular), the OC committee recorded the tax consequences of the agreements previously concluded concerning payments that the 'Body Corporate of Parkside' either had received or would receive. The payments were described in the Tax Circular as:

(a) $88,000 for the 'sale of a licence';

(b) $10,000 in exchange for the right to allow adjoining owners to relocate part of the gardens surrounding the tennis court;

(c) $2,000 per week for the sale of the licence while the tennis court remains unavailable;

(d) $10,000 to allow Hooker to work extended hours on Saturdays;

(e) $150,000 for permitting the air-conditioning in the 479 St Kilda Road Land to operate at a certain noise level.

1. The residents were advised that 'You are required to disclose your entitlement to these funds in your tax return for the income tax years 1988 and 1989 notwithstanding you have never personally received the money.'[25] However, the residents were advised that Hooker would provide an indemnity for any tax liability incurred by them.[26]
2. The OC's solicitors had previously, and two months before the Agreement for Lease[27] was signed, provided written advice to the OC committee regarding the taxation implications of receiving compensation from the developer, and how those obligations might lawfully be minimised. In a letter dated 5 September 1986,[28] Ellison Hewison & Whitehead provided the following advice regarding the weekly $2,000 compensation the body corporate was to receive, which was estimated to be $60,000 in total:

(a) 'Income tax would be payable by the members of the body corporate on $60,000 as divided between them. This would be the least satisfactory result from an income tax point of view resulting in overall tax of about $30,000';

(b) 'Even if these amounts are not assessable as income that may still be assessable under the new capital gains tax provisions. Capital gains tax would be payable at the same rates as income tax less an inflation indexation factor.'

(c) capital gains tax would be payable in four specific scenarios which the advice identified;

(d) 'Consequently, the whole or some part of the receipt is either assessable income for all the members or an assessable gain to those members to whom any of (1)‑(4) above apply'.

1. Against this, the solicitors proposed the idea of a sporting club. The authors of the advice said as follows:[29]

A tennis club may be exempt from income tax and/or capital gains tax pursuant to Section 23(g) of the Income Tax Assessment Act. However it should be understood that should the club become entitled to the receipt of the compensation then those funds would be exempt from tax only if they are kept in the club i.e. the compensation could not be distributed to the club members.

We do not believe that we can convince the Taxation Office that the club is a sporting club for the purposes of Section 23(g) for the following reasons: -

(1) the 'club' it may be argued is not a genuine club established for the promotion of an athletic game or sport but a convenience which forms part of the facility provided to the owners of a residential development.

(2) if the club is in receipt of the compensation receipts then it may be argued that the club is carried on for the purposes of profit or gain.

Should any of these arguments by the Commissioner succeed then exemption under Section 23(g) would not be available. A likely scenario.

1. Two months later, and because there was apparently insufficient time to incorporate a tennis club, the members of the committee of the body corporate entered into the Agreement for Lease 'for and on behalf of the PARKSIDE TENNIS CLUB INC'. The Agreement for Lease contained the results of the hard and successful negotiation by the Parkside Proprietors. For example, noise limits were agreed in respect of plant (cl. 3(a)) and there was to be no air-conditioning between 10.00pm and 7.00am on weekdays and none at all on weekends (cl.3(b)‑later removed for the $150,000 payment referred to in paragraph 24(e) above).

2. The use of the Club to obtain Sky Channel was not the reason for the use of an incorporated association and is not mentioned in any contemporaneous document. The first reference to the Club being able to receive Sky Channel is in a resident newsletter dated November 1988[30] and Sky Channel is better characterised as an ancillary benefit of the Club's incorporation.

3. The Club was then incorporated on 12 January 1987. Ellison Hewison & Whitehead had been asked by a representative of the body corporate manager, Inscor Services Pty Ltd, to draft any bi‑laws required for the Club.[31] The model rules were adapted in a number of respects for the Club.[32] For example, membership was restricted to Parkside Proprietors (cl. 4) and the committee of management of the Club was to consist of the members of the body corporate committee (cl. 24). The Lease was then executed sometime that year (presumably shortly after incorporation).[33]

4. On incorporation of the Club an application for membership (by Parkside Proprietors) was created[34] and an amendment was proposed to the Parkside bi-laws requiring proprietors to become members of the Club.[35] The proposed amendment to the body corporate rules was passed by special resolution at the AGM on 10 March 1987.[36]

5. Accordingly, each of the three agreements contemplated by the OC committee on 3 September 1986 was entered into (see paragraph 23 above).

6. After the Club had been incorporated and the Lease executed, Minter Ellison gave further written advice on 29 April 1988.[37] The advice addressed, among other things, the tax treatment to be given to a further sum of $100,000 agreed to be paid by Hooker,[38] and whether the payment should be paid to the 'Body Corporate' or 'the Club'. At pages 2-3 of the advice Minter Ellison advised that, if the money is paid to the Body Corporate, then the 'Unit Holders' (i.e., residents) would likely be personally liable to pay income tax in a proportionate share notwithstanding that it was contemplated that they would not receive the funds themselves. Otherwise, the Body Corporate would be liable to pay tax at a rate of 49%. On the other hand, Minter Ellison advised that, if the payments were to be made to the Club, then:

... If the Club falls within section 23(g)(iii) of the Act then the payment to the tennis club will be tax free.

...

We have examined the incorporation documents of the Club and prima facie they satisfy the requirements of section 23(g)(iii) ...

1. By this time the Club already had $70,000 in its own bank account.[39] The Club was not an alter ego for the OC. It existed in its own right and had substantial assets in addition to the Lease. After its creation the statutory requirements relating to the Club were complied with, at least for a time[40] and Sky Channel was obtained by the Club on the basis that it could be viewed in every apartment at Parkside.[41]

As these submissions make very clear, the structure chosen for the ongoing management and enjoyment of the Current Tennis Court - particularly a long term lease to a new entity, the Club, rather than a lease to the OC and/or to the Parkside Proprietors directly - was for taxation reasons. Moreover, the chosen structure was clearly thought to be advantageous to the Parkside Proprietors in this context. It also seems clear that, in light of these matters, neither the OC nor the Parkside Proprietors would have sought to construe the Lease in such a way as to read 'the Lessee' provisions as including them as parties to the Lease rather than only the Club. Consistently with this position, it is provided by clause 9 of the Lease that the Lease was to be registered as an encumbrance on the freehold title for the 479 St Kilda Road Land (under the Transfer of Land Act 1958).[42]

15 The plaintiffs observed, in this context, that on 12 January 1987, the Club was incorporated[43] and that sometime in 1987, Hooker and the Club entered into the Lease, by which Hooker agreed to lease the land on which the Current Tennis Court and Garden was constructed (the Club Land) to the Club.[44] The plaintiffs add that in 1987 there were negotiations between Hooker, Glenvill Homes and the OC regarding the construction of the tennis court,[45] but it is said to be unclear whether these negotiations occurred before or after the Lease was entered into. In any event, it is submitted that these negotiations are not significant to the issues in dispute and, further, that there were some further agreements entered into between Glenvill Homes, the OC committee and Hooker after the Lease was entered into, but that these do not form part of the parties' pleaded cases.[46]

16 It is submitted by the plaintiffs that the two written agreements critical to these proceedings are the Agreement to Lease and the Lease, and, particularly, the proper interpretation of the provisions of the latter.

17 Reference has been made to the negotiations with respect to the relocation of the Former Tennis Court and these agreements. So I now turn, more particularly, to the terms of the Lease.

18 The terms of the Lease are not in dispute.[47] The relevant terms of the Lease are as follows:

1. In consideration of the payment of the rental of ONE DOLLAR ($1.00) ('the rental') of which sum Hooker acknowledges receipt and subject to the covenants and powers implied under the Transfer of Land Act 1958 excepting those covenants contained in section 67 of the said Act which are EXPRESSELY NEGATIVED and also to the covenants and conditions contained in this Lease Hooker HEREBY LEASES to the Lessee the Club Land to be held by the Lessee for a term of ninety‑nine years from the day of 1986 ('the Term').
2. (1) Notwithstanding the provisions of the Transfer of Land Act 1958 Hooker shall be responsible for the payment of any rates taxes and outgoings of whatever nature assessed in respect of the Club Land.
3. [sic] Subject to the provisions of clause 6 Hooker covenants with the Lessee that the Lessee shall and may peaceably possess and enjoy the Club Land for the Term hereby granted without interruption or disturbance from Hooker or any other person or persons claiming by through or under Hooker.

...

1. (a) Hooker covenants that the area adjoining the Club Land and shown on the annexed plan ('the Garden') shall be set aside for the purposes of a garden for the use and enjoyment of the occupants of the Building.

(b) The Garden shall be constructed and maintained to the satisfaction of the Lessee.

(c) If Hooker does not comply with the provisions of paragraph (b) of this clause the Lessee shall be entitled to enter upon the Garden and remedy any such default of the cost and expense in all respects of Hooker.

...

1. The Club shall not during the continuance of this Lease assign, transfer, demise, sublet, part with, share the possession of, grant any licence effecting, mortgage, charge or otherwise deal with or dispose of the Club Land.

...

1. (a) In this Lease unless the contrary intention appears the following words and expressions shall mean as follows:

(i) 'Hooker' means and includes Hooker Corporation Limited its successors, transferees, assigns and any other person entitled to be registered or registered as the proprietor of the Lessor's Land.

(ii) 'The Lessee' means and includes the Lessee, its successors, assigns, respective licensees, invitees, servants and agents.

(b) (i) Words importing the singular number include the plural number and vice versa and the masculine gender includes feminine and neuter genders and vice versa and words importing persons include corporations and vice versa.

(ii) If any party hereto comprises two or more persons a reference to such party includes each such person and his executor, administrators, successors and permitted assigns (as the case may be) and the agreements and obligations to be observed and performed by each party as herein expressed or implied shall bind those persons jointly and each of them severally.

(iii) References to statutes and ordinances shall include all rules and regulations made thereunder and any amendments thereto whether by subsequent statute or otherwise and a statute or ordinance referred to an incorporation and any of its provisions.

(iv) Where pursuant to this Lease the day on or by which any act matter or thing is to be done is a Saturday or Sunday or a public holiday such act matter or thing may be done on the next succeeding day which is a business day.

1. The parties hereto agree that this Lease shall be registered and shall appear as an encumbrance on certificate of title volume 2036 folio 125.

19 The difference between the parties in the context of the Lease lies in the effect of its terms. In this respect, the plaintiffs contend that the effect of the terms is as follows:[48]

(a) In consideration of the payment of the rental of $1, of which sum Hooker acknowledged receipt, Hooker leased the Club Land to be held by the Club for a term of 99 years commencing in 1986;[49]

(b) Hooker would be responsible for the payment of any rates, taxes and outgoings of whatever nature assessed in respect of the Club Land;[50]

(c) Subject to the provisions of clause 6 of the lease (the effect of which is set out below), Hooker covenanted with the Club that the Club would peaceably possess and enjoy the Club Land for the term granted without interruption or disturbance from Hooker or any other person or persons claiming by, through, or under Hooker;[51]

(d) Hooker covenanted that the area adjoining the Club Land and shown the annexed plan, which was described as 'the Garden' (i.e., the garden defined above), would be set aside for the purpose of a garden for the use and enjoyment of the occupants of the office building;[52]

(e) The Garden would be constructed and maintained to the satisfaction of the Club;[53]

(f) If Hooker did not comply with clause 4(b) of the lease, the Club would be entitled to enter upon the Garden and remedy any such default [at] the cost and expense in all respects of Hooker;[54]

(g) The Club would not, during the continuance of the lease, assign, transfer, demise, sublet, part with, share the possession of, grant any licence effecting, mortgage, charge or otherwise deal with or dispose of the Club Land;[55]

(h) Unless the contrary intention appeared, the word 'Hooker' meant and included Hooker and its successors, transferors, assigns, and any other person entitled to be registered or registered as the proprietor of the 479 St Kilda Road land;[56]

(i) Unless the contrary intention appeared, the words 'The Lessee' meant and included the Club, its successors, assigns, respective licensees, invitees, servants, and agents (the 'Lessee' definition);[57] and

(j) Hooker and the Club agreed that the lease would be registered and would appear as an encumbrance on certificate of title volume 2036 folio 125 (i.e., the parent title to the 479 St Kilda Road Land).[58]

Memart, critically, rejects the plaintiffs' contention that the expression 'the Lessee' meant not only the Club but its successors, assigns, respective licensees, invitees, servants, and agents; contentions which are considered and rejected in the reasons which follow.[59]

20 The parties are broadly in agreement as to the actual, physical, use of the Current Tennis Court and Garden. The differences between them lie, rather, in the legal significance, characterisation and consequences of such use. The plaintiffs contend that the Parkside Proprietors and their invitees have had uninterrupted and exclusive possession of the Club Land (including the Garden) to the exclusion of Hooker and its successors in title, including Memart. And also that, consistent with this position, the OC has maintained the Club Land and Garden at its own expense. The plaintiffs submit that the only difference between the parties seems to be that Memart alleges that from about 1987 to 25 October 2001 the OC, the Parkside Proprietors, and their invitees shared possession of the Club Land and Garden with the Club, but, thereafter, the Club parted with possession and the OC, the Parkside Proprietors, and their invitees had exclusive possession. The plaintiffs also contend that the distinction is not material for the purpose of their case of title by possession. Moreover, it is submitted that it is common ground that possession of the Club Land (and Garden), whether by the Club or by the OC, the Parkside Proprietors and their invitees has been exclusive in the sense that the registered proprietor from time to time and all third parties, including members of the public, have been excluded from this land. It is also observed that, as a matter of fact, there is no public access to the Club Land and Garden.

21 Memart, on the other hand, contends that the evidence with respect to the use of the Current Tennis Court and Garden does not support the plaintiffs' contentions. More particularly, it is observed that Mrs Rogers gave evidence in relation to her involvement with gardeners in looking after the Garden adjoining the Current Tennis Court and picking rosemary herself, and what can only be described as low level use of the Current Tennis Court by persons, including 'children ... running amuck'.[60] Mr Dymond, who also gave evidence for the plaintiffs, was a tennis player many years ago and gave evidence that he and others played regular games of tennis.[61] Both witnesses gave evidence the tenor of which was that, due to the aging of the Parkside Proprietors, use of the Current Tennis Court had diminished over time. It is said that the appropriate conclusion to draw from this evidence is that Mrs Rogers, Mr Dymond and other Parkside Proprietors from time to time probably, together with some invitees, have used the Club Land for tennis and there has been some accessing of the adjoining Garden for differing purposes, the frequency and duration of all of which is not exposed by the evidence. Memart adds that, importantly for present purposes, the evidence is that the rights claimed to be exercised in respect of such use arose under the Lease.

22 Critically to the present proceeding, is the assessment of evidence of use of the Club Land, as to which Memart submits that the plaintiffs have failed to discharge their burden of proving adverse possession.

23 In this respect, Memart observes that the plaintiffs have only put the evidence of two witnesses before the Court. It is contended that the evidence of those witnesses demonstrates that they did not themselves adversely possess the Club Land (or the Garden).[62] Nor did Mrs Rogers or Mr Dymond give evidence on behalf of the Parkside Assignors, let alone, as Memart submits, all of the Parkside Proprietors over the years, about the use of the land by those persons.

24 On this basis, Memart contends that it is appropriate for the Court to draw a number of Jones v Dunkel inferences against the plaintiffs in this proceeding. The rule only applies where a party is required to explain or contradict something. An unexplained failure to call a witness may support an inference that the evidence would not have assisted that party's case. Disputed questions of fact are to be decided by reference to the evidence that has been adduced at trial and not by reference to speculation about what other evidence might possibly have been led. However, as contended by Memart, a Jones v Dunkel inference does not operate to supply a gap in the evidence. It can only make evidence that has been adduced more or less probable.[63] In this context, Memart contends that as the plaintiffs only called two Parkside Proprietors, the evidence from whom did not support its case in a number of respects and no other Parkside Proprietors, past or present, were called. It should therefore be inferred that their evidence would not have assisted the plaintiffs' case. In light of the extent of the evidence that was called by the plaintiffs, and in the absence of any evidence of obstacles to calling other witnesses, I accept that the inference as submitted by Memart should be drawn.

25 The plaintiffs' claim to adverse possession of the Current Tennis Court is considered in detail in the reasons which follow. It is, however, important to consider on a factual basis their knowledge of the existence of the Lease. Memart seeks to emphasise the importance of this knowledge on the basis that the plaintiffs' claims, inter alia, in adverse possession and estoppel depend on an alleged entitlement to use the Current Tennis Court as being dependant on something other than the Lease. Memart contends that the evidence does not establish such a possession, and it is to some of the detail of its submissions on that evidence to which I now turn.[64]

26 As Memart observes, the two witnesses called by the plaintiffs, Mrs Rogers and Mr Dymond, were not asked by the plaintiffs' counsel, and did not give evidence, about the basis on which they believed there was an entitlement to use the Club Land (or Garden). Those questions were asked by counsel for the first defendant, Memart.

27 Mrs Rogers gave evidence[65] that, at the time she and her husband purchased their apartment, she knew the Current Tennis Court was not entirely on the title to the 481 St Kilda Road Land. Mrs Rogers also gave evidence that other people she knew already living in the Parkside building said the Current Tennis Court was leased, and she had no reason to doubt that that was true. She said that the commonly held view amongst other Parkside Proprietors was that the Current Tennis Court was leased.

28 Mr Dymond also gave evidence[66] that, at the time he and his wife purchased their apartment, they knew part of the Current Tennis Court was on the property next door, and that they knew it was leased. He further gave evidence that it remained his understanding, until at least 2023, that the Current Tennis Court was leased and that the other Parkside Proprietors were also aware that the Current Tennis Court was leased. Mr Dymond also said that he was told there was a lease by the building manager, Mr Kaiser, when his apartment was acquired in 1992 and that there was a tennis club lease which Mr Kaiser referred to in the context of reference to the Club lounge.[67]

29 Mrs Rogers, the current chair of the OC committee, gave evidence[68] that the documents from 1986 to 1988 in the Court Book largely came from a 'dusty old container in the basement of the building'. As Memart observes, the documents were therefore in the possession of the OC the entire time and that many of those documents referred to the negotiation of the acquisition of the Lease and the creation of the Club. Further, Mr Dymond gave evidence that, in response to an enquiry from a prospective purchaser, he 'went and had a look through all the documentation'.[69] He also went to the lawyers who handled the material for the body corporate and found, in about 2015, an unexecuted copy of the Lease which fitted the description of the lease he knew existed.[70] This is the copy of the Lease contained in the Court Book. There is no other copy, particularly no signed 'original' copy, contained in the evidence.

30 The OC committee advised the owners corporation manager that an unsigned lease existed and gave it to the OC manager for the purpose of being provided to prospective purchasers with a statement under the Owners Corporation Act 2006 (OCA) as to matters affecting the affairs of the OC.[71]

31 As to the effect of this evidence, the first defendant, Memart, submits:[72]

1. The effect of this evidence is that, and the Court should find that the Parkside Proprietors knew when they acquired their apartments that part of the tennis court was on the adjoining property (which is physically obvious) and that part (the Club Land) was leased. The Parkside Proprietors continued to hold that belief and, by reason of their disputing in this proceeding the validity of the termination of the Lease, still hold the belief that the Club Land was leased.
2. In addition to this evidence of common knowledge of the Parkside Proprietors, documents referring to the existence of the Lease and the Parkside Tennis Club Inc. were in the possession of the OC from 1986 to date and could have been located with little effort.
3. Further, according to the plaintiffs' evidence, and as noted above, after a copy of the Lease (albeit unsigned) was obtained by Mr Dymond in around 2015, it was provided with certificates under s.4 of the OC Act to prospective purchasers from 2015 to 2025.
4. According to the first defendant's s 50 Evidence Act table of lot owner details there have been approximately twenty sales of apartments in the period since the OC manager was given the unsigned Lease to be attach to s 4 statements and they are all likely to have received a copy of the Lease in the Court Book.
5. This evidence entirely undermines the plaintiffs' case for adverse possession and estoppel, leaving the plaintiffs' arguments as to termination of the Lease, the effect of deregistration of the Club and co‑tenant and sub‑lease arguments as the only arguable claims remaining. The adverse possession claim is said to be the principal claim of the plaintiffs.

32 The position of the plaintiffs is that, in spite of the deregistration of the Club, the status quo as between Memart, the OC and the Parkside Proprietors was maintained with regard to use by the OC, the Parkside Proprietors and their invitees in accordance with the terms of the Lease.[73] Moreover, in this context, the plaintiffs contend that Memart had constructive knowledge of the deregistration of the Club, even if it did not have actual knowledge.

33 The OC has, since 24 October 1984, been the owners corporation, formerly the body corporate, for the plan of strata subdivision for Parkside. The membership of the OC is comprised of all the registered proprietors of the lots on the Parkside Land from time to time, namely the Parkside Proprietors. The current Parkside Proprietors are recorded in the title searches for each of the lots on the Parkside Land.[74] In oral opening, the plaintiffs provided to the Court a document that identifies each of the current Parkside Proprietors.

34 Apart from the OC, as the first plaintiff, there are the second and third plaintiffs, namely Mrs Rogers and Mr Browne, respectively. They are currently joint registered proprietors of lot 18, being apartment 9E, and accessory lots 67 and 91 on the strata plan, being all of the property described in Certificate of Title Volume 9577 Folios 998, 960 and 984 respectively.[75] Since the commencement of this proceeding, the current Parkside Proprietors (other than Mrs Rogers and Mr Browne) have assigned their legal and beneficial rights and interests in the proceeding to the OC (the Parkside Assignors).[76] As is discussed further in these reasons, the first defendant, Memart, contests this assignment as having any relevant effect for the purpose of this proceeding.

35 Since 27 February 2002, the first defendant, Memart, has been the registered proprietor of the 479 St Kilda Road Land which is more particularly described as Certificate of Title Volume 10617 Folio 591, derived from Parent Title Volume 2036 Folio 125. The second defendant is the Registrar of Incorporated Associations, created by s 187(1) of the Associations of Incorporation Reform Act 2012 (AIRA or the Current Act). As indicated previously, the Registrar has played no active role in the proceeding.

36 Section 4 of the OCA sets out the functions and powers of an owners corporation, as follows:[77]

An owners corporation has the following functions -

(a) to manage and administer the common property;

(b) to repair and maintain -

...

(c) to take out, maintain and pay premiums on insurance required or permitted by any Act or by Part 3 and any other insurance the owners corporation considers appropriate;

(d) to keep an owners corporation register;

(e) to provide an owners corporation certificate in accordance with Division 3 of Part 9 when requested;

(f) to carry out any other functions conferred on the owners corporation by -

(i) this Act or the regulations under this Act; or

(ii) the Subdivision Act 1988 or the regulations under that Act;

(iii) any other law; or

(iv) the rules of the owners corporation.

The expression 'common property' is defined in s 3 of the OCA to mean 'land shown as common property on a plan of subdivision or a plan of strata or cluster subdivision'. It is convenient to observe at this point, as submitted by Memart, the Club Land (and Garden) are not 'common property' within the meaning of these provisions.

37 Section 6 of the OCA sets out the powers of an owners corporation in the following terms:

(a) all the powers conferred on the owners corporation by -

(i) this Act or the regulations; or

(ii) the Subdivision Act 1988 or the regulations under that Act; or

(iii) any other law; or

(iv) the rules of the owners corporation; and

(b) all other powers that are necessary to enable it to perform its functions.

38 Section 18(1) of the OCA provides that an owners corporation must not commence any legal proceeding unless it is authorised by a special resolution to do so. Otherwise, as provided in s 28(2) of the Subdivision Act 1988, an owners corporation has perpetual succession and is capable of suing and being sued in its own name. These provisions must, clearly in my view, be read in light of these specific provisions of the OCA with respect to the functions and powers of an owners corporation.

39 Although, as put by Memart, the Club Land and Garden are not 'common property' within the meaning of the OCA, the plaintiffs submit that the OCA makes the intention of the legislature clear in that an owners corporation can bring proceedings in respect of property, other than the property under the strata plan, in certain circumstances. By way of example, reference is made to s 15 of the OCA which provides that an owners corporation may obtain a lease or license over any land 'whether or not part of the [strata] plan'. Thus, it is said that if the OC, as tenant of land that it has leased, is unable to sue to enforce any rights it has acquired as tenant pursuant to s 15 because it is not the legal owner of the land, this will be a perverse outcome. Accordingly, it is contended that this could not have been what the legislature intended, and so the OC clearly has the power to bring proceedings in respect of the Lease in its own right, as well as assignee of the Parkside Proprietors (other than Mrs Rogers and Mr Browne).

40 Further, the plaintiffs contend that s 4(f)(iii), which states that an owners corporation has the power to carry out 'any other functions conferred on the owners corporation' by 'any other law', and s 6(a)(iii) of the OCA, which states that an owners corporation has 'all the powers' conferred on it by 'any other law', must be taken into account. In the present context it is submitted that, by this proceeding, the OC seeks to enforce its legal or, alternatively, equitable interests in the Club Land (and Garden) that have crystalised through the laws of adverse possession, estoppel, trespass and their right to quiet enjoyment - i.e., 'any other laws', as contemplated by ss 4(f)(iii) and 6(a)(iii) of the OCA. Plainly, the plaintiffs contend the OC has standing to bring these proceedings in its own right.

41 The first defendant, Memart, contends that the OC lacks standing to bring this proceeding and is not assisted by the legislative provisions and other matters to which reference is made by the plaintiffs. More particularly, it is said that an owners corporation is not authorised by the OCA to take assignments of causes of action from third parties, whether residents or otherwise, for the purposes of conducting legal proceedings in relation to matters beyond the functions and powers of an owners corporation as stipulated in the OCA. For this reason, it is contended that the OC lacks standing to pursue any of its claims in this proceeding. Moreover, it is said that the OC's reliance on the special resolution made on 11 September 2024,[78] by which the members passed a special resolution purporting to confer authority on the OC to bring this proceeding, does not assist it. This is because, it submits, the resolution is not with respect to any matter permitted by the OCA.

42 It is also submitted by Memart that the OCA does not grant an owners corporation carte blanche authority to do anything which the members approve by way of special resolution. There are limits on the powers and authority which members may confer upon an owners corporation. It is said, it is made plain by the provisions of the OCA which - for example, in ss 12, 14, 15, 18, 24(4), 25(1)(b), 44, 52, and 53 - each permit an owners corporation to do specific things provided a special resolution is first passed. On this basis, it is contended that it is clear that the legislature intended that only certain things could be done by special resolution, and were an owners corporation free to do whatever the members wished by special resolution, then each of the sections to which reference has just been made would be redundant. As a matter of statutory interpretation, particularly in light of the scheme of the OCA, it seems very difficult, in my view, to argue a contrary position. On this basis, and for the reasons advanced by Memart, I am of the opinion that its submissions in this respect should be accepted.

43 It is true that, as submitted by the plaintiffs, s 18 of the OCA permits an owners corporation to commence legal proceedings by special resolution. Nevertheless, as submitted by Memart, I think it is clear that this provision should be read in the context of the legislation itself. That is, as contended by Memart, the provision should be read such that an owners corporation can only bring legal proceedings if the proceeding concerns matters the owners corporation is already authorised to deal with under the OCA, including by way of special resolution. I agree with the point made by Memart that were it otherwise, the use of owners corporations would be open to abuse and could be used as vehicles to conduct all kinds of litigation not contemplated by that legislation.

44 A lease or licence of property outside the plan of subdivision creating the owners corporation may be entered into by such a corporation, provided the entry into such lease or licence is authorised by special resolution for the purposes of s 15 of the OCA. However, in these proceedings, it appears to be uncontested that no such resolution has been passed in relation to the Club Land, which might have assisted the OC in providing authority to bring this proceeding. The contention by the plaintiffs that the failure to pass a special resolution for the purposes of s 15 of the OCA is merely a procedural irregularity must, in my view, be rejected. The provisions of s 15 are important provisions, which reserve for the members of the OC control over its actions. It follows that any such control would be negated significantly if any owners corporation could, in this context, enter into ongoing leasehold obligations and subsequently seek ratification from the members by special resolution. This is an entirely different situation from that considered by McDonald J in Burbank Australia Pty Ltd v Owners Corporation PS 447493,[79] in the context of an appeal under s 148 of the Victorian Civil and Administrative Tribunal Act 1998, concerning the absence of a special resolution authorising the bringing of proceedings. Nevertheless, it is contended by Memart that the OC would still lack standing in bringing this proceeding, having regard to its lack of legislative authority in terms of functions and powers. The requirement under s 15 of the OCA for a special resolution for an owners corporation to obtain a lease or licence of any land, whether or not in the plan, does, in my view, negate the possibility of an owners corporation potentially circumventing the statutory requirements by achieving the acquisition of a leasehold interest by adverse possession, absent any special resolution. There is no power under the OCA for an owners corporation to purchase or otherwise obtain freehold title to land outside the plan. Consequently, I am of the view that the OC has no capacity to acquire any interest in the Current Tennis Court land or the Club Land, by adverse possession.

45 A remaining aspect of the standing of the OC to sue in this proceeding is the effect of the deeds of assignment. There are two critical aspects with respect to the deeds of assignment in the context of standing. The first is whether assignments of this kind can enhance the position of the OC in terms of standing, having regard to the provisions of the OCA to which reference has been made. The second is whether there is anything of significance to assign, having regard to the claims made in this proceeding. This aspect has been dealt with in the preceding reasons which explain why the assignments do not enhance the position of the OC. It follows that for there to be anything useful in terms of supporting the OC's claim, the facts and circumstances must support the position that the assignors have assignable possessory rights which would support an adverse possession claim against Memart. On this basis, Memart contends that, as only a party which has a cause of action has standing to obtain a remedy in respect of that cause of action, there is no separation of standing from the elements of a cause of action. It is said that having a cause of action is, therefore, a de facto standing requirement.[80]

46 In the context of the present proceeding, the intertwining of these issues is helpfully addressed in Memart's written closing submissions:[81]

1. The OC's claims the subject of this proceeding may be regarded as choses in action which are amenable to being assigned.[82] But for something, including a chose in action, to be assigned, it must first exist (whether at the time of the assignment or, subject to some qualifications, at some time in the future).[83]
2. The assigned cause of action must be proved by admissible evidence in the normal way.
3. In this case, the OC says that, other than the second and third plaintiffs, the 'lot owners have assigned or are expected to assign their legal and beneficial rights and interests relating to this proceeding to the OC.'[84] For this purpose, the OC has produced a deed of assignment for each lot owner, each of which are in common form.[85] Each relevant deed of assignment contains the following terms, inter alia:

(a) 'Cause of Action' is defined to mean any claim against Memart in connection with the use, occupation and ownership of the Tennis Court Land whether in the name of individual lot owners of the Plan or in the name of the Assignee (or both) (clause 1);

(b) 'Claim' means actions, suits, causes of action, debts, dues, claims, liabilities, demands, damages, losses, costs, injunctions, orders for possession, declarations and expenses of any description, decisions, judgments and orders either at law or equity or arising under any statute (clause 1);

(c) 'With effect from the Assignment Date, the Assignor hereby assigns its legal and beneficial title and interest relating to the Cause of Action to the Assignee' (clause 2a);

(d) 'To the extent that the Assignor has any right, title or interest to the Tennis Court Land, it herby assigns to the Assignee all of its right, title and interest to the Tennis Court Land' (clause 2b).

1. The OC has entered into purported deeds of assignment in respect of 36 separate lots (collectively, the Parkside Assignors).
2. The Parkside Assignors are not to be equated with the 'Parkside Proprietors' defined at paragraph [11] of the FASOC. That is because the latter group includes all 'registered proprietors from time to time' - that is, all persons who have ever held legal title to one of the lots of the Parkside Land. The Parkside Proprietors since 1987 number substantially more than the current Parkside Proprietors.
3. The OC has not explained how any cause of action that may have accrued to a Parkside Proprietor who is not a Parkside Assignor has been assigned to the Parkside Assignors so as to enable the latter group to assign such choses in action to the OC. To the extent the OC relies upon any such causes of action, the OC's claims must necessarily fail on the grounds that it lacks standing. No point is taken by the plaintiffs that the sale of a Parkside unit to a new proprietor carried with it any or all existing claims of the former proprietor concerning the Club Land and no such point could in law be taken. The assignments if they were effective at all only assigned the claims held by the assignor.

The question whether the facts and circumstances pertaining to possession of Parkside by the Parkside Proprietors or the Parkside Assignors establishes a cause of action for adverse possession is a matter considered further in that context in the reasons which follow. Without considering these matters in detail now, it is useful to observe that the broad thrust of Memart's submissions in this respect is that whatever possessory rights might have been obtained by these individuals, there have been no assignments as between these individuals which would have the effect of aggregating whatever possessory rights they may have obtained through their occupation of a unit in Parkside by way of separate deeds of assignment so as to provide a period of possession which could be regarded as adverse for the purposes of the provisions of the Limitations of Actions Act 1958 (LOAA).

47 The plaintiffs submit that it is well‑established that a third party can sue to obtain specific performance of a contract, such as a lease, even though it was not a party to the contract, in certain circumstances. In support of this general proposition, reference is made to the judgment of Barwick CJ in Coulls v Bagot's Executor & Trustee Co Ltd where the Chief Justice said:[86]

It must be accepted that, according to our law, a person not a party to a contract may not himself sue upon it so as directly to enforce its obligations. For my part, I find no difficulty or embarrassment in this conclusion. Indeed, I would find it odd that a person to whom no promise was made could himself in his own right enforce a promise made to another. But that does not mean that it is not possible for that person to obtain the benefit of a promise made with another for his benefit by steps other than enforcement by himself in his own right.

Reference is also made to the judgment of Deane J in Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (Trident v McNiece) as follows:[87]

If a third party is to be entitled to rights and subject to obligations in relation to a contract to which he is a stranger, those rights and obligations must have some basis, either in statutory provision or in common law principle, beyond the mere contract. They cannot be based merely on the contract since the contract, of itself, directly operates only between the parties to it. On the other hand, if they arise by reason of the operation of some other principle or some statutory provision, the rule of privity will have nothing to say to them.

The plaintiffs add that his Honour described a legal assignment of rights as a circumstance in which a third party may be entitled to enforce the promise made between two parties to a contract.[88]

48 Memart highlights in its submissions that there are two aspects to the plaintiffs' claim that the Parkside Proprietors have standing to sue. The first aspect is that the Parkside Proprietors are licensees or invitees of the Club (and the Registrar as the successor of the Club) which, according to the plaintiffs, means that the OC and the Parkside Proprietors come within the definition of 'the Lessee' under the Lease. This aspect of the standing issue is, in my view, more conveniently dealt with in the context of the proper construction of the provisions of the Lease and, consequently, is addressed later in these reasons. The second aspect of the plaintiffs' standing argument is, as indicated above, that each of the OC in its own right, and the OC as 'assignee of the Parkside Proprietors, excluding the second and third plaintiffs', and the second and third plaintiffs, has standing to sue to obtain performance of the Lease. As indicated, the plaintiffs rely upon the decisions in Coulls v Bagot's and Trident v McNiece in support of this proposition. As observed by Memart, the plaintiffs also contend that the tenancy interest under the Lease was intended to and did endure for the benefit of each of the Parkside Proprietors on which basis it is alleged that, in those circumstances, the 'OC as assignee of the Parkside Proprietors', and the second and third plaintiffs in their own right, have standing to sue to obtain performance of the Lease. The plaintiffs, again, rely upon Coulls v Bagot's and Trident v McNiece in these respects.

49 Memart submits that these contentions by the plaintiffs are untenable for a number of reasons, which are concisely set out as follows:[89]

1. First, on the evidence before the Court, the OC is not the 'assignee of the Parkside Proprietors.' The OC is only the assignee of the Parkside Assignors.
2. Secondly, in circumstances where the Lease has been terminated (see part F.5 below), it cannot now be specifically performed in any event.[90]
3. Thirdly, the decisions in Coulls v Bagot's and Trident v McNiece, do not assist the plaintiffs. The facts of before the High Court in each of those cases are very different to the present. In the former case, Mr Coulls signed a contract with a company where he gave it the right to quarry from his land, in return for a royalty which he authorised be paid to his wife specifically. Mr Coulls died and the company ceased paying his wife. Mrs Coulls then sued but a majority of the High Court held that the company had no obligation because she was not a party to the contract.
4. Trident v McNiece created a limited exception to the doctrine of privity of contract in the specific field of insurance contracts where it is clear that the parties actually intended to confer a benefit on an identified third party.
5. In Trident v McNiece, there were six separate, and largely differing, judgments on the core question of whether there is an exception to the doctrine of privity of contract in the confined case of identified third party beneficiaries.
6. In Clarence City Council v Commonwealth [2020] FAFC 134; [2020] FCAFC 134; (2020) 280 FCR 265, the Full Federal Court observed at [85] that, as a result of the divergent reasoning in Trident v McNiece, the precise precedential value of the decision is uncertain.[91] The Full Court went on to summarise the differing approaches in the following way, highlighting the unique approach of Deane J:

... Although their analyses in respect of the doctrine of privity of contract differed, Mason CJ and Wilson J in a joint judgment, and Toohey J and Gaudron J writing separately, formed the ultimate majority in Trident, dismissing the appeal ... Brennan J and Toohey J, each writing separate judgments in dissent, would have allowed the appeal. Deane J, like Brennan J and Toohey J in the minority (and Gaudron J in the majority), was not willing to reform or abrogate the strict privity rule. However, Deane J alone concluded that, although the beneficiary under the insurance policy in Trident was not entitled to enforce the indemnity, it should nonetheless be afforded an opportunity to establish that the policy created a trust in its favour in respect of the benefit of the insurers promise to indemnify it ...

1. As confirmed at paragraph 60 of the plaintiffs' opening submissions, the plaintiffs' seem to rely upon Deane J's unique approach in support of what is pleaded at paragraph [47] of the FASOC. That is, the suggestion that the tenancy interest was intended to, and did endure for the benefit of, each of the Parkside Proprietors seems to be an attempt to get around the strict rules of the doctrine of the privity of contract, by some other means.

2. However, the courts have been very reluctant since Trident v McNiece to widen the otherwise very limited situations in which the doctrine of privity of contract will not apply strictly. The reasoning of Deane J has not subsequently been endorsed by the High Court. Indeed, this case does not even come within the ambit of the type of case that Deane J had contemplated - the Parkside Proprietors are not specifically named, and the 'benefit' is not one pursuant to an insurance policy but is to use land (presumably for leisure).

3. In Stewart v Good Shepherd Australia New Zealand [2025] VSC 351, there was a lease between the defendant and a third party. The plaintiff, an individual who was not a party to the lease, claimed she was entitled to the benefit of a clause in the lease and was empowered to enforce the lease, in reliance on the authority in Trident v McNiece. She argued she was able to do so on the basis she was part of a defined class of individuals who were said to be entitled to the benefit of the clause in question. In rejecting this argument, Finanzio J said at [84] that:

Trident was a case which concerned commercial insurance arrangements. Trident did not concern the RTA or residential tenancies arrangements broadly. It is not clear how the principles set down in Trident could have any application in this context. That said, clause 5.4 imposes an obligation upon [the defendant] for the benefit of the Department to 'take all reasonable steps to enforce the provisions of any sublease and the RTA including any amount payable by a sub‑tenant under a sublease'. Even if Ms Stewart were entitled to the benefit of that obligation, it is an obligation which confers no greater benefit than the proper construction of the RTA would yield ...

1. There is no reason for this Court to create an exception to the doctrine of privity of contract and it should not do so.

50 On the basis of the matters raised and authorities relied upon, together with the reasons advanced in these submissions by Memart, I accept them as a correct statement of the position in the present context. It should, however, be kept in mind that even were the position otherwise and as put by the plaintiffs, a finding of standing in the present context would not assist the plaintiffs with respect to the claim of adverse possession, nor would that finding be of any assistance if it is found that the Lease has now been validly terminated. These are matters which are addressed later in these reasons.

51 It is common ground that on 25 October 2001, the Registrar cancelled the registration of the Club (the deregistration). The deregistration was pursuant to s 36E(5) of the Associations Incorporation Act 1981 (the Former Act).[92] It is also common ground that the effect of the deregistration is that the property of the Club, including the Lease, vested in the Registrar.[93] Consequently, although the Club is now deregistered and is not, as such, named as a party, the Registrar does, as a result of the legislative consequences of deregistration, in some sense stand in its place.

52 The consequences of the deregistration of the Club, and the extent to which and when the Parkside Proprietors and Memart were aware of this, are addressed by the parties, both from the perspective of the plaintiffs' adverse possession claim and Memart's claim with respect to breach of the Lease. Nevertheless, it is common ground that the effect of s 36E(5) of the Former Act did have the effect together with s 36F(1)(a) of that Act in vesting the Lease in the Registrar upon deregistration of the Club. In this respect, Memart made specific reference to the provisions of s 36E(5) of the Former Act, which relevantly provided:

If, on the expiration of 28 days after the notice is given under sub‑section (3), the Registrar is satisfied that the incorporation of the association should be cancelled, the Registrar may, by notice published in the Government Gazette, cancel that incorporation.

Section 3(1) of the Former Act defined 'property' to include 'real and personal property and any estate or interest in any real or personal property'. It is uncontroversial that this would include, for instance, a lease.

53 In terms of vesting of property, s 36F(1)(a) of the Former Act provided that, where the incorporation of an association is cancelled under the division (where s 36E is to be found), 'the property of the incorporated association vests in the Registrar'. On the basis of these provisions, it is clear that on the deregistration of the Club the Lease did vest in the Registrar.

54 As has been observed, on 1 July 2013, the Former Act was replaced with the Current Act. Among other things, s 142 of the Current Act provides that, where registration of an incorporated club has been cancelled in error, the club can only be reinstated by an application to the Supreme Court under s 143. In circumstances where the incorporation of the Club was not cancelled due to any 'error', no such application for reinstatement has been made. In any event, any such application was required to be made within 15 years after cancellation, being 25 October 2016. Accordingly, it is not now possible for the Club to be reinstated.

55 Consequently, I accept that the effect of s 140(2) of the Current Act is that the Registrar continued to hold the Lease as tenant. Whether or not the Lease has now been validly terminated by Memart is addressed further in the reasons which follow.

56 The plaintiffs rely on six alternative causes of action. As set out in its written opening submissions:[94]

1. ... The plaintiffs' primary cause of action is adverse possession of the Club Land and garden.[95] In the alternative, the plaintiffs also claim:

(a) performance of the Lease by Memart on the basis that the OC and the Parkside Proprietors are properly 'the Leasee' under the Lease;[96]

(b) performance of the Lease by Memart on the basis that the Parkside Proprietors are the beneficiaries of the tenancy interest under the Lease;[97]

(c) performance of an unwritten and part-performed sublease on the same terms as the Lease (sublease);[98]

(d) proprietary estoppel in favour of the OC and the Parkside Proprietors;[99] and

(e) estoppel by convention in favour of the OC and the Parkside Proprietors.[100]

1. As a consequence of the above, the plaintiffs also claim, in the alternative:

(a) trespass;[101] and

(b) breach of Memart's obligation of quiet enjoyment under the Lease, alternatively the sublease.[102]

1. In relation to the claims in 51(b) and (c) above, the plaintiffs allege that Memart has waived any right to allege a breach of the Lease, alternatively the sublease, and is further barred from doing so pursuant to s 5(1)(a) of the Limitations of Actions Act 1958 (Vic) (Limitations Act).[103]
2. Memart has made a counterclaim in the proceeding, seeking declarations that the Lease terminated on 15 or 22 August 2024 and that Memart is entitled to exclusive possession of the whole of the 479 St Kilda Road Land.[104]

57 These claims and the defences raised are addressed in detail in the reasons which follow.

58 The statutory context for claims for adverse possession lies in the LOAA. Section 8 of that Act provides that no action shall be brought by a person to recover land after the expiration of 15 years from when the cause of action accrued. A cause of action to recover land for adverse possession does not accrue until the land has been adversely possessed.[105] After the 15 year time period has elapsed, the title of the true owner of the land that has been adversely possessed is extinguished.[106]

59 The essential concept of adverse possession is that the possession must be wrongful as against the paper owner, such that it gives the owner the right to recover land. In Des Barres v Shey,[107] Sir Montague Smith said:

[P]ossession is adverse for the purpose of limitation, when an actual possession is found to exist under circumstances which evidence incompatibility with a freehold in the claimant.

Similarly, in Ramnarace v Lutchman,[108] Lord Millet said:

Generally speaking, adverse possession is possession which is inconsistent with and in denial of the title of the true owner. Possession is not normally adverse if it is enjoyed by a lawful title or with the consent of the true owner.

60 A fundamental principle with respect to establishing adverse possession, whether in respect of a reversionary or possessory interest, is that the possession must be 'open not secret; peaceful not by force; and adverse, not by consent of the true owner'.[109]

61 The onus of proving the acquisition of title by adverse possession lies on the person who alleges that the true owner has been dispossessed. Adverse possession requires proof of two important matters. The first is factual possession by way of physical custody and control of the land sought to be adversely possessed and, secondly, an intention to possess, to the exclusion of the whole world.[110]

62 As Memart submits, these general principles were explained by Slade J in Powell v McFarlane as follows:[111]

It will be convenient to begin by restating a few basic principles relating to the concept of possession under English law:

(1) In the absence of evidence to the contrary, the owner of land with the paper title is deemed to be in possession of the land, as being the person with the prima facie right to possession. The law will thus, without reluctance, ascribe possession either to the paper owner or to persons who can establish a title as claiming through the paper owner.

(2) If the law is to attribute possession of land to a person who can establish no paper title to possession, he must be shown to have both factual possession and the requisite intention to possess ('animus possidendi').

(3) Factual possession signifies an appropriate degree of physical control. It must be a single and conclusive possession, though there can be a single possession exercised by or on behalf of several persons jointly. Thus an owner of land and a person intruding on that land without his consent cannot both be in possession of the land at the same time. The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed. ...

Everything must depend on the particular circumstances, but broadly, I think what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no-one else has done so.

(4) The animus possidendi, which is also necessary to constitute possession, was defined by Lindley M.R., in Littledale v Liverpool College (a case involving an alleged adverse possession) as 'the intention of excluding the owner as well as other people.' This concept is to some extent an artificial one, because in the ordinary case the squatter on property such as agricultural land will realise that, at least until he acquires a statutory title by long possession and thus can invoke the processes of the law to exclude the owner with the paper title, he will not for practical purposes be in a position to exclude him. What is really meant, in my judgment, is that the animus possidendi involves the intention, in one's own name and on one's own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow.

The question of animus possidendi is, in my judgment, one of crucial importance in the present case. An owner or other person with the right to possession of land will be readily assumed to have the requisite intention to possess, unless the contrary is clearly proved. This, in my judgment, is why the slightest acts done by or on behalf of an owner in possession will be found to negative discontinuance of possession. The position, however, is quite different from a case where the question is whether a trespasser has acquired possession. In such a situation the courts will, in my judgment, require clear and affirmative evidence that the trespasser, claiming that he has acquired possession, not only had the requisite intention to possess, but made such intention clear to the world. If his acts are open to more than one interpretation and he has not made it perfectly plain to the world at large by his actions or words that he has intended to exclude the owner as best he can, the courts will treat him as not having had the requisite animus possidendi and consequently as not having dispossessed the owner.

Further, as Memart indicates in its submissions, the Court of Appeal in Whittlesea City Council v Abbatangelo[112] cited and summarised these principles with approval; quoting the judgment of Slade J, but omitting the last paragraph, as set out above.

63 The plaintiffs in their submissions made extensive reference to the Court of Appeal decision in Abbatangelo, emphasising the following passage:[113]

The reference to 'adverse possession' in s 14(1) of the Act is to possession by a person in whose favour time can run and not to the nature of the possession. The question is simply whether the putative adverse possessor has dispossessed the paper owner by going into possession of the land for the requisite period without the consent of the owner, with the word 'possession' being given its ordinary meaning. Whether or not the paper owner realises that dispossession has taken place is irrelevant.

As indicated by the plaintiffs, the application of the general principles relating to adverse possession were summarised and elaborated upon in Abbatangelo, and are helpfully set out in the plaintiffs' opening submissions as follows:[114]

(a) To adversely possess land, the alleged adverse possessor must be shown to have both factual possession and the requisite intention to possess (animus possidendi).[115]

(b) Factual possession requires an appropriate degree of physical control. It must be single and exclusive possession. The question of what acts constitute a sufficient degree of physical control must depend on the circumstances, including the nature of the land and the manner in which the land of that nature is commonly used or enjoyed.[116]

(c) Whilst it is impossible to generalise what acts will suffice to evidence factual possession as everything must depend on the circumstances, broadly speaking, the alleged adverse possessor must be shown to have been dealing with the land in question as an occupying owner might be expected to deal with the land, and no one else has done so.[117]

(d) Each case must be decided on its own facts. Whilst previous cases can provide some guidance, they should be treated with caution in terms of seeking factual analogies by reference to particular features of a person's dealings with the land.[118]

(e) Animus possidendi involves the intention, in one's own name and one's own behalf, to exclude the world at large, including the paper owner. The law requires clear and affirmative evidence that the alleged adverse possessor not only had the requisite intention to possess, but made that intention clear to the world.[119]

(f) Animus possidendi does not mean that there must be an intention to exclude the paper owner, but rather an intention to exercise exclusive control. The alleged adverse possessor actually believing themselves to be the true owner of the land is quite sufficient.[120]

(g) Intention to possess may, and frequently is, deduced from the objective acts of physical possession.[121]

(h) There is no use for an alleged adverse possessor to rely on acts which are equivocal to the intention to exclude.[122]

(i) A person asserting a claim of adverse possession may do so on reliance on the factual possession and animus possidendi of their predecessor(s) in title. Periods of possession may be aggregated, as long as there is no gap in possession.[123]

(j) Acts of possession with respect to part of land claimed may in all the circumstances constitute possession with respect to all of the land claimed.[124]

(k) To succeed in an adverse possession claim, the adverse possessor cannot abandon their interest after the expiry of the limitation period.[125]

The reference in paragraph (f) of these submissions to animus possidendi is a reference to the judgment of Slade J in Powell v McFarlane, which is set out in the previous paragraph of these reasons. The passage emphasised by the plaintiffs in their submissions is a short and generalised summary of paragraph (4) in the passage from the judgment of Slade J which is set out and referred to by the Court of Appeal in Abbatangelo. Justice Slade does, however, make clear in that paragraph that the nature of animus possidendi does not stand apart from its factual and legal context and does not, in my view, provide any basis for the plaintiffs to establish any relevant animus possidendi with respect to the freehold title of Memart; as discussed in the reasons which follow.[126]

64 Some further authorities are also referred to by Memart in its submissions with respect to authorities, which further elucidate what is meant by 'possession' and also what acts will be sufficient, or insufficient, to establish the intention to possess. In this vein, Memart submits:[127]

1. In practice, proof of factual possession and intent is often intertwined. Thus, in Gianchino v Gianchino [2023] VSCA 162; (2023) 73 VR 306 at [30] (Gianchino), the Court of Appeal, in explaining the law as to adverse possession (in the context of a dispute between joint owners), cited with approval the following extract from the High Court's decision in BA v The King [2023] HCA 14 (BA v The King) at [72]-[73], in relation to what is meant by 'possession' (excluding citations, emphasis added):

72 ... Possession is a different legal concept from occupation or habitation.

73 Whether a person does or does not occupy or inhabit premises are not necessarily straightforward questions. 'Occupation' is a word with different meanings in different contexts. In ordinary usage, a person would not be described as 'occupying' a holiday property that they own but are not inhabiting. A furnished apartment rented to tourists but intermittently empty would not be described as 'occupied'. But, in law, 'occupation' is a term of art used to mean the exercise of 'physical control over land'. Even then, the legal relevance of occupation, or 'physical possession', has only been as an element which, combined with an intention, can establish a legal right to possession. Hence, as Lord Browne‑Wilkinson said in the leading speech in J A Pye (Oxford) Ltd v Graham:

there has always, both in Roman law and in common law, been a requirement to show an intention to possess in addition to objective acts of physical possession ... Suppose a case where A is found to be in occupation of a locked house. He may be there as a squatter, as an overnight trespasser, or as a friend looking after the house of the paper owner during his absence on holiday. The acts done by A in any given period do not tell you whether there is legal possession. If A is there as a squatter he intends to stay as long as he can for his own benefit: his intention is an intention to possess. But if he only intends to trespass for the night or has expressly agreed to look after the house for his friend he does not have possession. It is not the nature of the acts which A does but the intention with which he does them which determines whether or not he is in possession. [plaintiffs' emphasis]

1. In Gianchino at [40], the Court of Appeal also cited with approval the following statement of Lord Hutton in JA Pye (Oxford) Ltd v Graham [2002] UKHL 30; [2003] 1 AC 419 (Pye) at 447 [76] [plaintiffs' emphasis]:

I consider that such use of land by a person who is occupying it will normally make it clear that he has the requisite intention to possess and that such conduct should be viewed by a court as establishing that intention, unless the claimant with the paper title can adduce other evidence which points to a contrary conclusion. Where the evidence establishes that the person claiming title under the Limitation Act 1980 has occupied the land and made full use of it in the way in which an owner would, I consider that in the normal case he will not have to adduce additional evidence to establish that he had the intention to possess. It is in cases where the acts in relation to the land of a person claiming title by adverse possession are equivocal and are open to more than one interpretation that those acts will be insufficient to establish the intention to possess. But it is different if the actions of the occupier make it clear that he is using the land in the way in which a full owner would and in such a way that the owner is excluded.

65 It is clear that adverse possessors can claim through each other and, when that occurs, each of their separate periods of adverse possession, when less than the required 15‑year period, can be aggregated so that a cumulative period of adverse possession exceeding the statutory period can be established. In those circumstances, adverse title will be established by the person in possession when the statutory period expires.[128] However, as is clear, and as s 14(2) of the LOAA provides, adverse possession for the necessary period cannot be established by means of successive adverse possessors if there is any 'gap' in possession.[129] As indicated previously, the evidence in this proceeding neither establishes continuity of possession as between successive occupiers, nor does it establish that there were any formal assignments of possessory rights as between successive claimed adverse possessors. Moreover, in the particular factual context, there is no evidence as to which of the Parkside Proprietors actually took any steps in terms of possession of the Club Land or whether, in any possible 'chain' of successive occupiers, which one of them exercised rights of adverse possession. In any event, these are matters which are addressed more fully in the reasons which follow.

66 There is one further matter of general principle which, in my view, must be kept clearly in mind in the present context. That is, that there is a general rule that a tenant is estopped from denying its landlord's title, and a landlord from denying its tenants.[130] Consideration of this principle indicates a potential inconsistency in the plaintiffs' case. This would follow were a sublease of the Club Land found to exist in which case the claimed subtenants would be precluded from asserting title adverse to their landlord, the head tenant, or the reversioner. Thus, any subleasing claim would stand or fall on its own 'merits' and would not be aided by any claims of adverse possession. In any event, I am of the view that this inconsistency does not arise as the sublease claim fails for reasons set out below.

Against what interest is any adverse possession claimed

67 Having regard to what appears to be the common position, namely that the Lease remained on foot at least until Memart served a notice of termination on 15 August 2024 - to what interest was any possession claimed to be adverse?

68 As indicated in the preceding discussion of the principles applicable with respect to adverse possession, possession by a non‑owner will not be adverse against the paper owner if it is permissive, such as pursuant to a lease or a licence. It follows that for a lease to exist, there must be a grant of exclusive possession over the land, otherwise the interest is a licence.[131] The plaintiffs emphasise this point and, further, that licences cannot be transferred between individuals, nor do they exist in perpetuity.[132] Reference is also made by the plaintiffs to s 139(1) of the Property Law Act 1958 which provides:

Where a reversion expectant on a lease of land is surrendered or merged, the estate or interest which as against the lessee for the time being confers the next vested right to the land, shall be deemed the reversion for the purpose of preserving the same incidents and obligations as would have affected the original reversion had there been no surrender or merger thereof.

As to these provisions, the plaintiffs say this means that, for example, if a reversionary interest of a lease is merged with the land following the valid determination of the lease, yet there was a valid sublease on foot at the time, the sublease will be preserved and continue as if the lease had not been determined.[133] The possibility of a sublease in the interests of the OC or the Parkside Proprietors is raised by the plaintiffs, but, for the reasons discussed later, I am of the view that no such sublease has been established, so there is no basis for the operation of these provisions.

69 Memart, in its submissions, emphasises what it says is a critical problem in the plaintiffs' adverse possession case, namely the problem of the reversionary interest. It puts that position in this respect as follows:[134]

1. Pursuant to s 8 of the LOAA, no action shall be brought by any person to recover any land after the expiration of fifteen years from the date on which the right of action to possess accrued to that person. As to when the right of action accrues or ceases to accrue in respect of a possessory interest in land, s 14 of the LOAA provides, inter alia:

(a) no right of action to recover land shall be deemed to accrue unless the land is in the possession of some person in whose favour the period of limitation can run (i.e., 'adverse possession'); and where under the LOAA any such right of action is deemed to accrue on a certain date and no person is in adverse possession on that date the right of action shall not be deemed to accrue until adverse possession is taken of the land: s 14(1);

(b) where a right of action to recover the land has accrued and thereafter before the right is barred the land ceases to be in adverse possession, the right of action shall no longer be deemed to have accrued and no fresh right of action be deemed to accrue until the land is again taken into adverse possession: s 14(2).

1. The position is different however where a reversionary interest is interposed. This is a critical distinction which the plaintiffs do not appear to have turned their minds to in this proceeding. Under a lease for a fixed term (or term of years absolute) the right of the landlord to recover possession accrues when the lease expires or is terminated.
2. Under s 10(1) of the LOAA, a fee simple in reversion is treated as a future interest. A right of action is deemed to first accrue to a person entitled to a future interest when that interest falls into possession. Consequently where a stranger to the lease (stranger) dispossesses the lessee, the lessor's right of action to recover possession against the stranger is deemed to first accrue at the date when the prior estate represented by the lease comes to an end by expiry or termination, and the lessor is entitled to possession. In the present case the lease was not terminated until either May 2023 when the plaintiffs and all other persons were locked out of the Club Land or 15 August 2024 when the lease termination notice was served.
3. The plaintiffs misunderstand their adverse possession case because they ignore the lease they concede was held by the Registrar from deregistration of the Club on 24 October 2001. If there was adverse possession, which is denied, it extinguished the interest of the tenant under the lease, which on this argument, occurred on 25 October 2016. On extinguishment of the interest of the tenant by adverse possession the lease nevertheless remained on foot until terminated. As noted above, the lease was terminated when Memart locked the plaintiffs and all other persons out of the Club Land in May 2023 or when it served a notice of termination of the lease for breach on 15 August 2024, shortly after which it fenced off the former Club Land on its title. It follows that time never began to run against Memart.
4. Even if time began to run against Memart on 25 October 2016 (which for the above reasons it did not), Memart took possession of the Club Land well within the 15 year limitation period provided by s8 of the LOAA. This means that, but for the fact that Memart had already retaken possession of the land, it would otherwise have had until 25 October 2031 to take possession before its title to the Club Land would have been extinguished.

In my opinion, the position as put by Memart in these submissions is entirely correct for the reasons advanced and on the factual and legal bases as set out. As indicated in these reasons, incorporation of the Club was lost - apparently due to inadvertence and inattention - and all concerned proceeded for over 20 years on the basis that the Club was 'alive' and the Lease subsisted. By the time the real position emerged and the Lease was determined, thus exposing the freehold reversion to the possibility of an adverse possession claim, it was too late for such a claim to accrue. Moreover, this view is well and clearly supported by Dalton J in Eckford v Stanbroke Pastoral Co Pty Ltd, where his Honour said, with reference to general principles:[135]

The common law never regarded adverse possession against a lessee during the term of a lease as adverse possession against the landlord.[136] Until the lease came to an end, possession by a squatter was not adverse to the landlord's interest in the reversion, for that interest was not in possession, but delayed upon the term of the tenant. The landlord's right against a squatter did not accrue until the lease came to an end.[137]

70 Memart's position in this respect is that the OC faces insuperable problems in establishing both factual possession and the requisite intent to possess the Club Land. Particular aspects of these, so called, insuperable problems have been identified by Memart in its submissions. Rather than attempt to summarise the problems identified, it is more helpful to set those submissions out in full:[138]

1. First, the deregistration of the Club was not known by any party until 2023. To the extent any of the Parkside Proprietors used the Club Land and garden at any time, if they did, (as opposed to possessed), it may readily be inferred that they did so under the belief that they were using the Club Land in their capacity as members of the Club and pursuant to the terms of the Lease.[139] This does not establish an intention to possess the land to the exclusion of the world in one's own name and on one's own behalf (to adopt the terminology of Powell); to the contrary, it entails a mere intention to use (cf., possess) the land for recreational purposes only consistent with the terms of the Lease and their (assumed) membership of the Club.
2. In their opening submissions the plaintiffs suggested that this position taken by Memart represents a 'misstatement of the law'. The plaintiffs submitted that 'The test is whether or not one believes that one is exercising exclusive control over the area, and has the intention to do so.'[140] Memart accepts this test. But it is the plaintiffs' complaint that misstates Memart's position. Memart does not concede that the plaintiffs exercised exclusive control over the tennis court at any time. That is because the intermittent playing of tennis for leisure purposes, when combined with a positive belief that one is doing so as an invitee of a non-existent Club, does not constitute an intention to exercise exclusive control over the subject land.
3. The admissions made by each of Ms Rogers and Mr Dymond in their evidence regarding the infrequency with which tennis was played together with their belief that the use of the tennis court was permissive under the terms of the Lease carries with it the consequence that neither had the requisite intention to exclude the rest of the world including Memart from the tennis court.
4. Secondly, the recreational nature of the use tells against both factual possession and any intention to possess. Similar to the example given in Pye and as cited by the High Court in BA v The King, intermittent trespassing, or pursuant to an understanding that it is with the permission of another (i.e., under the Lease), does not constitute adverse possession. That is what happened in the instant case. Since the Club's deregistration in 2001, the Parkside Proprietors, in the belief they were members of the Club, would intermittently trespass (unbeknown to them at the time), for the purposes of playing tennis or tending to the garden. These are not acts of a person or persons who 'made full use of the land in the way in which an owner would'.
5. The plaintiffs failed in this proceeding to establish on the evidence that any person or group of persons played tennis with any kind of sufficient regularity or purpose such as to constitute factual possession or intention to possess.
6. Ms Rogers confirmed that she is not a tennis player and did not play tennis.[141] Mr Dymond said he had not been on the tennis court for at least ten years.[142] As to their observations of other people using the tennis court, Ms Rogers said she 'saw some people playing tennis' and that she 'also saw children generally running amuck in there'.[143] Mr Rogers spoke of people previously playing regular games of tennis. He said 'it appeared to be every week, but I can't guarantee that'.[144]
7. The evidence of Ms Rogers and Mr Dymond is not evidence of adverse possession.
8. To the extent the plaintiffs rely upon documents to attempt to prove adverse possession, this begs the question: what documents? There are no documents that have been put before the Court that would establish adverse possession in the sense contemplated in Powell or Abbatangelo. Both Ms Rogers and Mr Dymond spoke of a formal booking process which Mr Dymond assumed is recorded in writing.[145] The book recording scheduled games of tennis could have been produced in this proceeding with little effort but the plaintiffs have not done so.

136. The documents before the Court do not prove adverse possession.

1. Thirdly, the OC rely upon the fact a fence was erected in 1987 around the tennis court.[146] However, the Court should find that the erection of the fence in this case was not for the purpose of excluding the whole world from the land. At the time the fence was erected, the Lease was on foot and the Club was in possession. Rather, it may readily be inferred that a fence was erected around the tennis court for the purpose of preventing tennis balls from escaping, as is usual for tennis courts.
2. Fourthly, the OC has not explained, and Memart expects it will not be able to explain, how the relevant acts of 'possession', or 'intention', of the OC or the Parkside Proprietors since 1987 are to be reconciled. It would not be credible for the OC to contend, for instance, that the Parkside Proprietors acted in a joint enterprise to exclude the rest of the world. To advance such a contention would be inconsistent with their (apparent) belief that the Club remained the tenant and licensee.
3. Fifthly, and following the last point, to the extent individual lot owners adversely possessed the Club Land or garden from time to time, this begs the following questions: (1) who?; (2) when?; (3) to the extent there was cross-over in time, how did they resolve their conflicting acts of possession and conflicting intents? (4) to the extent there were gaps, then adverse possession was lost under s 14(2) of the LOAA such that time would have commenced again.
4. Sixthly, the plaintiffs forensic decision not to put other Parkside Proprietors before the Court as witness, in the circumstances of those outlined above, mean that the Court may readily draw a Jones v Dunkel inference that their evidence would not have assisted the plaintiffs. Noting the OC has the burden of proving adverse possession, the significant lacuna in evidence means the OC has not discharged its burden.
5. Seventhly, even if the plaintiffs establish adverse possession, for the reasons explained in part E.1 above,[147] this was against the reversionary interest under the Lease only. However, the Lease was not terminated until August 2024. Any adverse possession against Memart's possessory interest only commenced to run from that date, with the result that the 15‑year period never accrued under s 8 of the LOAA.
6. Lastly, the plaintiffs contend that the garden should be treated differently to the Club Land insofar as the effects of deregistration of the Club is concerned. The plaintiffs say that because a licence was granted over the garden, and not a lease, that it did not vest in the Registrar.[148] Putting to one side that the plaintiffs cannot establish factual possession over the garden to the requisite standard in any event, as was conceded on the first day of trial by the plaintiffs, the garden may also be properly regarded as an appurtenance that runs with the Club Land.[149] That the garden is an appurtenance is reinforced by the compensation arrangements entered into with Hooker and as reflected in the Tax Circular, where $10,000 was paid 'in exchange for the right to allow adjoining owners to relocate part of the gardens surrounding the tennis court.' If this is correct, then there is no basis to say that the garden should be excised from the Club Land.

71 Putting aside issues which the plaintiffs raise with respect to the nature of the use and occupation of the Garden, to which I come in due course, the plaintiffs do not, in my view, have satisfactory answers to these problems which Memart has identified. Moreover, it is quite clear on the evidence that the OC and the Parkside Proprietors used the Current Tennis Court and Garden on the assumption that it was subject to a lease to the Club and that this was the basis upon which they used the Current Tennis Court and enjoyed the Garden. There is no suggestion in the evidence that they saw themselves as exercising possessory rights adverse to the freehold owner of the 479 St Kilda Road Land, the land of which Memart is now the freehold owner. This is quite apart from the shortcomings in the evidence of use of the Club Land, which could be regarded as adverse to whichever entity was then entitled to possession as the true owner, whether the reversioner or the tenant under the Lease, which was understood to be the Club. However, in light of the principle that a tenant is estopped from denying its landlord's title, it must follow that even were the OC and the Parkside Proprietors to be regarded as tenants of the Club Land, this principle would preclude any claim for adverse possession against their claimed sublandlord, the Registrar (in essence, standing in the shoes of the deregistered Club).[150]

72 The plaintiffs also assert that Memart made admissions by reason of its notice of default, whereby it is said that it admitted the OC has been in factual possession of the Club Land to the exclusion of all others; that the OC intended to possess the Club Land to the exclusion of all others;[151] that Memart admitted that the OC has been in factual possession of the Garden to the exclusion of all other; and that it intended to possess the Garden to the exclusion of all others.[152]

73 In my view, as submitted by Memart, there is no basis for these submissions as the notice of default was directed to the Club's breach of clause 6 of the Lease, which is a covenant preventing the Club from parting with or sharing possession of the Club Land. In my view, it is clear that the notice of default does not, for the purposes of an adverse possession claim, contend that the Parkside Proprietors had factual possession, let alone an intention to possess, to the standard that would be required to establish an adverse possession claim for the purposes of s 14 of the LOAA. As Memart emphasises, the primary ground in the notice of default was that the Club, by reason of it ceasing to exist, was no longer in possession of the Club Land pursuant to the Lease and that there had, thereby, been a parting with possession. The validity of the notice of default and termination of the Lease is considered in the reasons which follow.

74 The point is made by Memart in its submissions that neither Mrs Rogers nor Mr Browne seek relief in terms of adverse possession. Nevertheless, in the list of issues agreed between the parties, the plaintiffs ask the Court to determine whether they have gained title by possession of the Club Land and/or the Garden.[153]

75 For the preceding reasons, it is clear in my view that neither Mrs Rogers nor Mr Browne can, themselves, claim title to the Club Land (or the Garden) by way of adverse possession. They have occupied their apartments since 2020 and therefore cannot satisfy the requirements of ss 8 and 14 of the LOAA. Moreover, neither Mrs Rogers nor Mr Browne have taken any assignment of any other lot owners' cause of action, whether cast in terms of acquired adverse possessory rights or otherwise.

76 The plaintiffs raise two issues in relation to the Garden. The first is whether the OC or others entered into and maintained the Garden, and the second is whether that entry and maintenance was pursuant to the Lease or a licence.

77 In relation to the first issue, it is said that Memart admits that:

(a) from about 1987 to May 2023, the Garden was only accessible from a gate on the Parkside Land (i.e., not by Memart or its predecessors in title);[154]

(b) between 27 February 2002 and about May 2023, Memart did not interfere with or in any way change the existing circumstances of the Garden;[155] and

(c) between 27 February 2002 and until around 2023 or 2024, Memart has not maintained the Garden because this was the responsibility of the lessee under the Lease.[156]

78 The plaintiffs provided some evidence about the occupation and use of the Garden by the OC and the Parkside Proprietors between 1992 and 2023, and also documentary evidence showing the expenditure incurred by the OC since 2006 for gardening, which included the Garden.[157]

79 As indicated in the preceding reasons, it would have to be said that the evidence as to occupation and use of the Garden is very thin, to say the least, and does not provide anything like a detailed record of use and occupation over any particularly long period and certainly not a period relevant to the application of the LOAA.[158] The consequences of expenditure by the OC on the maintenance of the Garden are discussed further in these reasons.[159]

80 As to the second issue, the plaintiffs submit that Memart initially admitted that the Garden was subject to licence only, and was excluded from the Lease because:[160]

(a) the Lease was in respect to the 'Club Land' which did not include the Garden;[161]

(b) the Garden was described in the Lease as the area adjoining the Club Land (and thus was expressly excluded from the Club Land);[162] and

(c) the Garden was set aside for the 'use and enjoyment of the occupants of "the Building", which was defined as Hooker's land'.[163]

The plaintiffs accept this analysis. They do add, however, clearly recognising the obvious challenges with their submission, that Memart has since sought to back track by denying that the Garden was excluded from the Lease, and saying instead that 'permission to enter upon and maintain the Garden was granted by clause 4(c) of the Lease to the Club'. It is said that Memart did not seek leave to withdraw the admission previously made.

81 The plaintiffs contend that the characterisation of the occupation right with respect to the Garden is that of a licence and not a lease.[164] Accepting this position for present purposes, the issue would then be, as the plaintiffs put it: what was the nature of the occupation of the Garden from 25 October 2001 upon the deregistration of the Club? The plaintiffs contend that the licence, being personal in nature, did not vest with the Registrar.[165] The plaintiffs note that Memart disputes this and adds that this issue is important because, if the Garden licence did not vest in the Registrar, then it came to an end on 25 October 2001, such that the occupation and use of the Garden by the OC and the Parkside Proprietors after this time was adverse.

82 Section 36F(1)(a) of the Former Act is to the effect that upon deregistration, the 'property' of an association will vest in the Registrar. 'Property' is defined in s 3(1) of the Former Act as including 'real and personal property and any estate or interest in real or personal property'. It is, as the plaintiffs observe, not disputed that the Garden licence is not real property, adding that the question is whether it is personal property within the meaning of s 3(1) of the Former Act. On the basis of the analysis in the context of the meaning of 'property' within the meaning of the Bankruptcy Act 1966 (Cth), applied in King v King[166] and Griffiths v Civil Aviation Authority,[167] it is contended that it is not personal property as it is not assignable, applying the reasoning encapsulated by Chesterman JA in King, concluding as follows:[168]

This review of the authorities leads to the conclusion that the applicant has a distinctly arguable claim that his right to occupy the unit was a personal right or privilege, not a right of property, and that he is the only person (subject to his former wife's conjoint right) who may enjoy the right by occupying the premises. If the applicant does not exercise the right it will cease to exist. The right cannot be assigned, or sold, and therefore has no value to anyone but the applicant. It is not capable of realisation for the benefit of the applicant's creditors.

83 The plaintiffs contend that the same reasoning can be applied (presumably meaning should be applied) to the Former Act and the extant facts. Relevantly, it is said, s 36F(1)(b) of the Former Act states:

(1) If the incorporation of an association is cancelled under Subdivision 1 -

...

(b) the Registrar may -

(i) give any directions as the Registrar thinks just for or with respect to the payment of the debts and liabilities of the incorporated association, the distribution of its assets and the winding up of its affairs; and

(ii) appoint a person for the purpose of investigating the affairs of the incorporated association with a view to the realisation of its assets, payment of debts, discharge of its liabilities, distribution of its assets and winding up of its affairs ...

This provision, it is said, makes plain that, like the vesting of property in the Trustee under the Bankruptcy Act 1966 (Cth), the legislative purpose of the 'property' of a deregistered association vesting in the Registrar is so that the Registrar can deal with that property, including to realise the association's assets, pay its debts and discharge its liabilities.

84 Given that a licence to occupy cannot be assigned as a matter of law, the Garden licence cannot be used by the Registrar for any of these purposes, the plaintiffs contend. In other words, it is useless in the hands of the Registrar. Therefore, and even if, contrary to established principle, the licence could be transferred to the Registrar - i.e., vest in the Registrar - this perverse outcome strongly favours a conclusion that the Garden licence did not vest in the Registrar upon the deregistration. Accordingly, it is said the occupation and use of the Garden by the OC and the Parkside Proprietors on and from 25 October 2001 was adverse.

85 I do not understand it to be controversial that the Garden licence cannot be assigned and that, consistently with the authorities to which reference has been made and also the reference to s 36F(1)(b) of the Former Act, the Garden licence did not vest in the Registrar upon the deregistration of the Club. Nevertheless, this does not answer the factual and legal question as to whether there was any adverse possession by the OC and the Parkside Proprietors as contended by the plaintiffs. In my view, for the reasons indicated previously, any possession or occupation was so sporadic and minimal, and also depended upon the assumption that the Club Land lease was subsisting, that no possession which could be considered adverse was established with respect to the Garden.

86 Reference has already been made to the plaintiffs' claims that the OC and the Parkside Proprietors are properly 'the lessee' under the Lease or that the Parkside Proprietors alone fall within this definition. There was also an alternative claim that there subsists an unwritten and part performed sublease on the same terms as the Lease.[169]

Precursors to the Agreement to Lease and the Lease

(a) on 6 November 1986, Hooker and the persons described as the committee members of the OC entered into an agreement to lease (the Agreement to Lease);[170]

(b) on 12 January 1987, the Club was incorporated; and

(c) sometime in 1987, after the Club's incorporation, the Lease was then entered into.[171]

88 The plaintiffs contend that, when entering into the agreement to lease, the OC committee 'did so as agent for a then proposed club to be known as the Parkside Tennis Club'.[172] In response, Memart says that the OC committee, as a matter of law, could not have acted for, or entered into, an agreement as agent for a non‑existent principal and entered into an agreement to lease on behalf of the members of the committee. In any event, the plaintiffs observe that Recital B of the Agreement for Lease states that the OC committee entered into the agreement as agent for the Club, accepting that the Club was not incorporated until 12 January 1987. The plaintiffs submit that this is a non‑issue, in any event, as their claims arise from the Lease and not the Agreement for Lease, and their adverse possession claim concerns the period 2001 to 2016, and not with respect to this earlier period. Consequently, whether or not this may have been a 'live' issue is answered by Memart's responsive submissions.

89 The plaintiffs contend that the expression 'Lessee' as used in the Lease casts a very broad net, as indicated by Recital B of the Lease, which states as follows:

The Lessee is comprised of the registered proprietors from time to time of a building known as Parkside ('Parkside') constructed on the land adjoining the Lessor's Land and being the land situate at 481 St. Kilda Road, Melbourne ('the Lessee's Land') and the Committee enters into this Lease as agent for the Parkside Tennis Club Inc.

90 In support of this contention, the plaintiffs make reference to the well accepted general principle of construction that contracts, such as the Lease, should be given a business‑like interpretation, taking into account the commercial circumstances of the case.[173] Moreover, it is contended that there is no issue regarding the certainty of who the 'Lessee' is, as it, rather, they, can only be the registered proprietors of the Parkside Land, which is a finite class of persons at any given time, readily ascertainable from searches of the land titles register. The plaintiffs also cite in support of their position that paragraph 8(a)(ii) provides that:

'The Lessee' means and includes the Lessee, its successors, assigns, respective licensees, invitees, servants and agents.

91 Memart, on the other hand, argues strongly against such a construction on the basis that, more generally, the law will not contemplate a demise to a wide and unknown class of persons who change from time to time and, more particularly, that the plaintiffs' reliance on Recital B and paragraph 8(a)(ii) leads to absurdity with, for example, 'invitees'. In relation to the latter, reference was made to evidence of children using the Current Tennis Court, where it might be thought that as 'invitees' they fall within the reference to 'the Lessee' in paragraph (8)(a)(ii).

92 In my view, the position contended for by Memart is correct when considered in the context of the provisions of the Lease as a whole and also well established common law principles in relation to the construction of deeds and leases in particular.

93 First, it is only 'Parkside Tennis Club Inc' which is named as the entity 'of the second part' to the deed, which is the Lease. As a matter of law, this is significant but, depending on context, may not be decisive. Norton on Deeds recites a number of early authorities for the proposition that 'the individuals composing a class which is capable of being ascertained may be made parties by the name of that class, as "all a man's creditors"'.[174]

94 Next, coming to Recital B again, regard must be had to context, with respect to both the terms of the Lease read as a whole and the commercial circumstances of its creation, consistent with the submissions of the plaintiffs in this respect. However, the role of the recitals is also addressed by Norton on Deeds, as follows:[175]

If both the recitals and the operative part of a Operative deed are clear and unambiguous, but they are inconsistent with each other, the operative part is to be preferred.

'If the recitals are ambiguous and the operative part is clear, the operative part must prevail': per Lord Esher, M.R., Ex p. Dawes [1886] UKLawRpKQB 52; (1886), 17 Q. B. D. 275, at p. 286.

It follows that a specific description of property, or a specific statement of what is intended to be done, contained in the operative part will not be controlled by a general description, or a general or ambiguous statement, contained in the recitals.

Having regard to these matters and the commercial circumstances of the case, the nature and history of which is set out in these reasons, my view is that Recital B must be treated as being intended to provide something like a textual narrative describing very generally and concisely the reason for a party's entering into the lease.[176] In other words, it is a rather brief statement of the position the parties had reached in negotiations for the construction and use of the Current Tennis Court which was, unsurprisingly, driven by the Parkside Proprietors' desire to maintain a tennis court facility for their use. There is, particularly having regard to the actual terms of the Lease, no basis for concluding that the general statement of this nature would govern the proper construction of the operative provisions of the Lease.

95 Turning to the operative provisions of the Lease, it is, in my view, quite clear that paragraph 8(a)(ii) is a facilitative provision designed to complement the operation of other provisions of the Lease, but not a provision governing or constraining or affecting proper construction of those other provisions. The provisions of clause 8 are prefaced by the words: 'in this Lease unless the contrary intention appears the following words and expressions shall mean as follows'. Moreover, examples of the facilitative operation of paragraph 8(a)(ii) are provided by paragraphs 4(b) and (c), which clearly contemplate servants, agents and others of 'the Lessee' to review the construction and maintenance of the Garden and to take remedial action.

96 Turning now to the law of landlord and tenant, it is clear, in my view, that, as Memart submits, 'you cannot have a demise to a wide unknown class of people who change from time to time'.[177] More generally, it is clear from the authorities that the parties to a lease must be identified in it or, if it is an agreement for lease, a note or memorandum to it which satisfies the requirements of the Statute of Frauds (and its successors). This is, for example, made clear in Sowler v Potter,[178] and also by the English Court of Appeal in Harvey v Pratt,[179] where the strict approach in this respect is highlighted in the judgment of Lord Denning MR (with whom Davies and Russell LJJ agreed). His Lordship said:[180]

'There must be a certain beginning and a certain ending, otherwise it is not a perfect lease, and a contract for a lease must, in order to satisfy the Statute of Frauds, contain those elements.'

Mr. Pearson has argued before us that there was an implied term that the lease should commence within a reasonable time. He says that this point was not considered in the earlier cases. He argues that on a sale of land there is an implied term that completion should be within a reasonable time; so why, he argues, should not there be the same with a lease? Why cannot there be an implied term that it should commence within a reasonable time?

I think the answer to that argument, however persuasive, is that the law is now settled on the point. Mr. Pearson suggested that Blore v Sutton can be explained by the absence of a sufficient memorandum within the Statute of Frauds. That may be so. But by the time we got to Marshall v Berridge in 1881 the law was settled. And it was treated as established law by the Court of Appeal in 1921, in Edwards v Jones. It is settled beyond question that, in order for there to be a valid agreement for a lease, the essentials are not only for the parties to be determined, the property to be determined, the length of the term and the rent, but also the date of its commencement. This document does not contain it. It is not sufficient to say you can supply it by an implied term as to reasonable time.

There is some practical flexibility in the approach of the common law to certainty in that there is authority for the proposition that certainty as to parties is provided where parties execute the relevant document, though they may not be named in the opening words of the lease.[181] Nevertheless, this flexibility does not, in my view, accommodate the position put by the plaintiffs.

97 In my view, these authorities more than support Memart's position with respect to certainty of parties. Additionally, regard should be had to the position that a lease is something of a hybrid between a contract and a grant of an interest in land. The contractual nature of leases has been emphasised in more recent times, but it does, nevertheless, involve the demise of a proprietary interest which would seem to militate very strongly against any suggestion that the party or parties enjoying the demise could fluctuate from time to time, even though their identity may be ascertained from the land titles register.

98 The plaintiffs submit that if their primary lease claim does not succeed, they claim in the alternative that the occupation of the Club Land by the OC and the Parkside Proprietors is pursuant to an unwritten and part‑performed sublease from the Club to the OC and the Parkside Proprietors on the same terms as the Lease, such that the notice of default and termination letter are invalid insofar as they apply to the sublease.[182]

99 The existence of the sublease is said to be inferred from the position that only the Parkside Proprietors from time to time were eligible to become members of the Club, and every Parkside Proprietor from time to time was a member of the OC. Further, it is said that the rules for the use and enjoyment of the Club Land were governed by those rules established and recorded by the OC from time to time, and that the OC maintained the Club Land at its own expense. As it is said, the members of the Club were a subset of the OC/Parkside Proprietors. The fact that the sublease was on the same terms as the Lease is also said to be inferred from these circumstances and the fact that, despite the deregistration of the Club, the occupation by the OC of the Club Land continued uninterrupted until 2023 as if the Lease were on foot. Consequently, it is said that even if the Lease was validly determined by the notice of default and termination letter (which the plaintiffs deny), by reason of s 139(1) of the Property Law Act, which is set out above, the sublease is preserved and continues as if the Lease were still on foot. Thus, it is said that the notice of default and termination letter are invalid insofar as they relate to the sublease, even if they are valid in relation to the Lease (which the plaintiffs deny).

100 In response, Memart raises the point that the only pleaded bases of which the sublease is said to arise is 'the OC's occupation of the Club Land'. More substantively, in response, Memart refers to clause 6 of the Lease containing an absolute covenant against subletting or parting with possession:

The Club shall not during the continuance of this Lease assign, transfer, demise, sublet, part with, share the possession of, grant any licence effecting, mortgage, charge or otherwise deal with or dispose of the Club Land.

Moreover, it is observed that the breach of the Lease was only discovered in March 2023, after which time Memart immediately took self‑help steps and, not long after, terminated the Lease. Consequently, it would follow that even if the plaintiffs could establish a sublease of the Club Land in favour of the OC, it is difficult to see how this would assist the Parkside Proprietors because, were the OC to licence these Proprietors or anyone else to use the Club Land, it would be a breach of clause 6 of the then sublease which would provide Memart with the basis for its termination. Also, as I have indicated elsewhere in these reasons,[183] the provisions of the Lease cannot properly be construed as including, within the definition of 'the Lessee', entities other than the Club and having regard to the provisions of the OC rules from time to time, which would not automatically include the Parkside Proprietors as members of the Club - rather, they had to make application to join the Club. The plaintiffs' submissions with respect to the alleged sublease are simply not sustainable. In my view, there is much force in Memart's submissions, which I accept as the bases and for the reasons put. Moreover, I am of the view that the plaintiffs' argument for the existence of a sublease is highly artificial and could not reasonably be thought to be the position in all the circumstances - particularly as at all relevant times, the actual possible demise of the Club was not within contemplation. Moreover, as I have discussed previously, the power or capacity of the OC to enter into leases of land not in the plan of subdivision requires the authority of a special resolution in accordance with the provisions of s 15 of the OCA.[184] In my opinion, these provisions cannot be transcended by any purported sublease created implicitly or by part performance as contended.

101 As discussed previously in these reasons, it is common ground that the Club was deregistered and its incorporation cancelled on 25 October 2001 by the Registrar, pursuant to s 36E(5) of the Former Act. It also appears to be generally common ground that the effect of s 36F(1)(a) of the Former Act is to vest the Lease in the Registrar, and that s 140(2) of the Current Act - the Associations of Incorporation Reform Act 2012 - is that the Registrar continued to hold the Lease as tenant. Memart claims that the Lease has been terminated and re‑entry effected, whereas the plaintiffs raise other arguments challenging the validity of such termination and re‑entry and claiming that the occupation and use of the Club Land by the OC and the Parkside Proprietors was adverse.

102 In the context of events and circumstances surrounding the discovery that the Club had been deregistered, the plaintiffs raised issues with respect to constructive knowledge of the true position with respect to the Club's incorporation on the part of Memart. These matters go to the question of whether Memart waived any right to allege that the Lease has been breached and is an issue that is discussed later in these reasons. Memart's witnesses, and each one of them, gave evidence that Memart only learned of the deregistration of the Club in about March 2023.[185] Moreover, as Memart observes, there was no evidence to suggest that the OC, the second or third plaintiff, or any of the Parkside Proprietors, were aware of the Club's deregistration at any time prior to March 2023.

103 In May 2023, which was relatively soon after Memart's learning of the Club's deregistration, Memart cut part of the Current Tennis Court fence and installed a gate to provide access from the office building on the 479 St Kilda Road Land to the Club Land (Memart Gate). The OC then installed a lock on the Memart Gate soon after,[186] which was subsequently removed by Memart.

104 Clause 6 of the Lease prevents the Lease from being assigned or transferred.[187]

105 On 30 July 2024, Memart's solicitors served a notice of default on the Registrar, as the relevant lessee under the Lease,[188] which specified the following breaches:

(a) on 25 October 2001, by reason of the cancellation of the registration of the Club under s 36E(5) of the Former Act, and by reason of the statutory vesting of the Lease in the Registrar pursuant to s 36F(1)(a) of the Former Act, the Club assigned, demised, parted with or otherwise dealt with or disposed of the premises in breach of clause 6 of the Lease;

(b) further, or alternatively, at and from 25 October 2001, the Registrar:

(i) parted with possession of the Premises by allowing or, alternatively, enabling a third party, namely the OC or various of the registered proprietors and/or occupiers of the apartment complex known as Parkside Apartments at 481 St Kilda Road, Melbourne to possess, occupy or use the Premises as a tennis court for the exclusive use and benefit of the registered proprietors and/or occupants of Parkside to the exclusion of all others; and/or

(ii) shared the possession of the premises with the OC or various of the registered proprietors and/or occupiers of Parkside, by allowing, or alternatively, enabling, the OC or various of the registered proprietors and/or occupiers of Parkside to possess, occupy or use the premises as a tennis court for the exclusive use and benefit of the registered proprietors and/or occupiers of Parkside to the exclusion of all others,

This notice of default went on to state that if the breaches were not remedied within 14 days, Memart may re-enter the leased premises and terminate the Lease and/or do any other thing that may be required to terminate the Lease and recover possession of the leased premises. By letter dated 15 August 2024, Memart then terminated the Lease by giving notice of termination or, alternatively, by accepting the Registrar's repudiation of the Lease.[189]

106 Subsequently, on 22 August 2024, Memart constructed a chain mesh fence on the common boundary of the properties and across the Club Land. The effect of this action is that the parts of the Club Land located on the 479 St Kilda Road Land are no longer accessible from the Parkside Land. The OC and Parkside Proprietors can no longer access the Club Land.[190]

Validity of notice of default and termination of the Lease

107 The plaintiffs claim that the notice of default and termination of the Lease are 'invalid and of no effect and are liable to be set aside'.[191] This argument is advanced by the plaintiffs on three separate grounds. The first is that the OC and Parkside Proprietors were, in effect, the 'Lessee' under the Lease; the second is that the tenancy interest under the Lease was intended to and did endure for the benefit of each of the Parkside Proprietors; and thirdly that the OC's occupation of the Club Land amounts to a sublease of the Club Land which is unwritten and part‑performed, and otherwise on the same terms as the Lease.

108 Each of these contentions has already been considered in these reasons and, for the reasons indicated, rejected.[192] Moreover, Memart contends that its valid termination of the Lease on 15 August 2024, in any event, terminated any sublease, in circumstances where Memart did not consent to the alleged sublease. It follows, it is said, that the plaintiffs' reliance on s 139(1) of the Property Law Act 1958 and s 42(2)(e) of the Transfer of Land Act 1958 has no basis. In my view, Memart's position is correct for the reasons indicated previously and noting, on the basis of those reasons, that the only way which a sublease might have arisen or subsisted would require Memart's consent.[193]

109 Reference should also be made to further submissions by the plaintiffs challenging the basis of the breaches specified in the notice of default.[194] The plaintiffs make reference to clause 6 of the Lease which provides as follows:

The Club shall not during the continuance of this Lease assign, transfer, demise, sublet, part with, share the possession of, grant any licence effecting, mortgage, charge or otherwise deal with or dispose of the Club Land.

This provision is, the plaintiffs submit, in effect a clause prohibiting the assignment, subletting or parting with possession of the demised premises. In relation to the first, it is said that for there to be a breach of this covenant against the assignment, the assignment must be voluntary, and so an involuntary assignment by operation of law, such as the vesting of a lease in a trustee in bankruptcy or a liquidator, is not a breach of the covenant against assignment.[195] Thus, it is said that this means that any 'assignment' of the Lease from the Club to the Registrar upon the deregistration of the Club did not breach the covenant against assignments contained in clause 6 of the Lease. Secondly, it is said that 'possession' in the context of this covenant means the legal right to exclude others from the demised premises[196] and, in this sense, 'possession' must not be confused with 'occupation'. Moreover, it is said that a lessee who retains legal possession does not part with possession if they merely allow other people to use or occupy the premises.[197] On this basis, the plaintiffs submit that if the Court accepts the definition of 'Lessee' as submitted by the plaintiffs, then deregistration of the Club did not cause the Lessee to part with possession or share it. The legal right to possess the Club Land has at all times remained with the Parkside Proprietors and with the OC as the manager of the land on their behalf. Additionally, it is submitted that there is no suggestion that the deregistration of the Club created a sublease from the Club, as head tenant, to the Registrar, as sub‑tenant. So it is said that a breach of this covenant does not arise on the facts, and the plaintiffs do not understand Memart to be contending otherwise.

110 As discussed in the preceding reasons, I do not accept the plaintiffs' submissions with respect to the broad net cast by the definition of 'Lessee' in the Lease and, consequently, there has, in my view, been a parting with possession as a result of the deregistration of the Club and the vesting of the interest of the Club in the Registrar. Generally speaking, one would expect a covenant prohibiting assignment to be directed to voluntary assignments. However, in the present circumstances, I am of the view that the prohibition on assignment contained in clause 6 of the Lease is broad enough to encompass the present situation where the reality is that the Lease has been lost on the deregistration of the Club and that situation is not now retrievable. As indicated previously, it is not possible to reinstate registration of the Club - even assuming that this would correct and avoid the operation of clause 6. In any event, that issue does not now arise. As to the subleasing issue, I have already, in these reasons, discussed why I reject the plaintiffs' submissions that any sublease is created as a result of the deregistration of the Club.

111 The plaintiffs claim that there has been a waiver of Memart's right to terminate the Lease, a proposition rejected by Memart.

112 More particularly, the plaintiffs' submissions in this respect are helpfully set out as follows:[198]

1. Even if Memart did not have actual knowledge, the plaintiffs will contend at trial that the evidence shows that Memart at least had constructive knowledge that the Parkside Proprietors were in possession of the Club Land.
2. Memart was aware of the Lease prior to it becoming the registered proprietor of the 479 St Kilda Road Land, and obtained legal advice about it from Allens Arthur Robinson.[199] It is unclear when the contract of sale between Memart and its predecessor in title was entered into,[200] but from the date of the legal advice, and the caveat lodged on behalf of Memart on the 479 St Kilda Road Land on 15 October 2001,[201] it may have been around this date. In any event, title was not transferred to Memart until 27 February 2002.
3. Memart is a sophisticated corporation with access to competent legal counsel, including in 2001. It is reasonable to assume that, prior to becoming the registered proprietor in 2002, it would or ought to have made enquires of the Club, including its status. A public Register search would have disclosed the Club's status. When doing so, Memart would have uncovered that the Club was deregistered on 25 October 2001, prior to it becoming the registered proprietor of the 479 St Kilda Road Land on 27 February 2002.
4. In the circumstances, from 27 February 2002, Memart should be taken to have elected to continue performance of the Lease and is thereby precluded from terminating the Lease at a later date.[202]
5. Further, with knowledge (actual or constructive) of the alleged breach of the Lease from at least 27 February 2002, Memart is barred from obtaining the relief sought in its counterclaim by reason of s 5(1)(a) of the Limitations Act. There is no suggestion that the alleged breach was concealed, such that the fraud exceptions in s27(a) or (b) of the Limitations Act should apply.

113 Memart, in turn, addresses more fully a question of constructive notice on its part as alleged by the plaintiffs. In so doing, it submitted:[203]

1. The plaintiffs also allege at paragraph [44.4] of the FASOC that Memart waived its right to allege that the occupation of the Club Land by the OC and the Parkside Proprietors amounts to a breach of the Lease. The plaintiffs seem to advance this argument on the basis that Memart had actual or constructive knowledge that the Parkside Proprietors were in possession of the Club Land since at least 27 February 2002.[204] For the brief reasons that follow, this argument can be readily disposed of.
2. First, Memart does not accept the plaintiffs characterisation of the breach of the Lease. The breach of the Lease is as described in the notice of default and termination notice.
3. Secondly, there is no evidence that Memart had actual knowledge of the breach of the Lease prior to learning of the Club's deregistration in early 2023.[205]
4. Thirdly, it cannot be said that Memart had 'constructive knowledge' of the breach. In this regard, the plaintiffs do not explain what they mean by this allegation.
5. The Baden Categories of knowledge which are often referred to on matters of constructive knowledge are: (1) actually knowledge; (2) wilfully shutting one's eyes to the obvious; (3) wilfully and recklessly failing to make such inquiries as an honest and reasonable person would make; (4) knowledge of circumstances which would indicate the facts to an honest and reasonable person; (5) knowledge of circumstances which would put an honest and reasonable person on inquiry (see Baden v Société Générale pour Favoriser le Dévelopment du Commerce et de l'Industrie en France SA [1992] 4 All ER 161).
6. The last two Baden categories are often referred to as the 'constructive notice' categories.
7. In Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296, the Full Federal Court provided this instructive summary of those categories:

The first two categories of 'knowledge' require no comment. The third involves such a calculated abstention from inquiry as would disentitle the third party to rely upon lack of actual knowledge of the trustee's or fiduciary's wrongdoing. The fourth reflects what seems to have been accepted provisionally by three judges of the High Court in Consul Development Pty Ltd v DPC Estates Pty Ltd. It is, in essence, an understandable, objective, default rule designed to prevent a third party setting up his or her own 'moral obtuseness' as the reason for not recognising an impropriety that would have been apparent to an ordinary person. It is the surrogate of actual knowledge. The form of constructive notice used in category (v) derives from the bona fide purchaser for value without notice doctrine.

1. There is no evidence that Memart was aware of any circumstances that would indicate, prior to early 2023, that the Lease had been breached.

114 In my opinion, there is no basis for the plaintiffs' submissions in support of the contention of waiver of the right of Memart to terminate the Lease. All were labouring under the misapprehension that the Lease subsisted until the contrary was discovered, after which time Memart acted reasonably promptly to terminate the Lease. More particularly, I accept Memart's submissions on the basis of the reasons advanced and the authorities relied upon.

115 It is the case that, applying to all leases, there is an implied covenant on a landlord of quiet enjoyment.[206] As the plaintiffs submit, this obligation requires the landlord to ensure that the tenant can occupy and enjoy the premises without disturbance or interference from the lessor or those for whom he or she is responsible.[207]

116 It follows that an act of trespass is a breach of this implied covenant.[208]

117 The plaintiffs' submissions in this respect assume that there was, while the Lease subsisted, or that they had established rights by way of adverse possession, that Memart breached the covenant for quiet enjoyment or trespassed upon the Club Land. As indicated in the preceding reasons, there was no interference with or entry onto the Club Land by Memart during the period all were labouring under the misapprehension that the Lease subsisted and that the Club remained 'alive'. This situation was, however, otherwise in that the plaintiffs' adverse possession claim has been found to have no basis. Consequently, the claimed acts of trespass by Memart - in entering upon the Club Land and installing the Memart Gate in 2023, and again entering into the Club Land in 2024 and installing a chain mesh fence along a common boundary following the discovery that the Club had been deregistered, together with the steps that had been taken to re‑enter and terminate the Lease, which culminated on the service of the notice of default on the Registrar on 30 July 2024 - do not amount to more than Memart asserting its rights as the freehold owner entitled to possession. For these reasons, there is no basis for the plaintiffs' claim for damages for breach of the covenant for quiet enjoyment or for trespass.

118 In support of its contention that a proprietary estoppel arose in its favour, reference is made to the judgment of Forbes J in Gurappaji v Duncan,[209] where her Honour set out the current law on proprietary estoppel in Australia as follows:[210]

A proprietary estoppel is created where the conduct of the promisor encourages the expectation of an interest in property and the promisee acts to their detriment based upon the encouragement that an interest in the property will become theirs. While there is no common intent, it relies on the encouragement of an expectation by one and the detrimental reliance by the other. In those circumstances equity will intervene to bind the promisor to make good the expectation that has been created.

To establish a proprietary estoppel, a plaintiff must prove that:

(a) a promise was made to the plaintiff that an interest in the property would be conferred;

(b) the plaintiff acted in reliance on that promise;

(c) the plaintiff acted reasonably in relying on that promise;

(d) the promisor knew or intended that the plaintiff would rely on the promise; and

(e) the plaintiff has suffered detriment by reason of the failure to abide by the promise made.

The promise that the plaintiff relied on may be a sufficient basis for a proprietary estoppel even if it lacks sufficient certainty or specificity to be enforceable as a contract. The principle applies not only to the expenditure on land owned by another but also to encouragement or assurance that other actions would lead to an interest in property.

The party advancing the estoppel claim bears the onus to show that they relied on the representation or promise. To discharge the onus to establish reliance, they must establish that the promise contributed to or influenced their conduct, so that it is unconscionable for the promisor to resile from the representation.

119 The plaintiffs plead that Hooker and Memart, as its successors in title, 'represented to the OC and the Parkside Proprietors' that:[211]

(a) the OC, the Parkside Proprietors, and their invitees were permitted to occupy the Club Land and use it to play tennis;

(b) the nature of the occupation and use was as if the OC and the Parkside Proprietors were lessees under the Lease; and

(c) the permission to occupy and use the Club Land continued notwithstanding the deregistration of the Club on 25 October 2001

The plaintiffs then plead[212] that the OC and the Parkside Proprietors relied on the representations by Hooker and Memart and acted under a reasonable belief therein, in their actions in occupying and using the Club Land, including after the deregistration of the Club on 25 October 2001. Memart observes with respect to this contention that the reference to representations by Hooker and Memart ignore the other registered proprietors between Hooker and Memart, including Dun and Bradstreet Pty Ltd from whom Memart bought the land. The plaintiffs then allege[213] that Hooker and Memart, as its successor, 'knew' that the OC and the Parkside Proprietors occupied and used the Club Land, including after the deregistration of the Club.

120 The plaintiffs also made reference in their closing submissions to a number of other authorities in support of this claim. Thus, reference is made to Taylors Fashions Ltd v Liverpool Trustees Co Ltd,[214] where a tenant purported to exercise an option to renew, but the option was void as it was not registered as required by statute. The exercise of the option was conditional upon installation of a lift during the initial lease term, which the tenant did at its own cost. Neither the landlord nor the tenant realised that the option was invalid. The landlord was estopped from relying upon the invalidity of the option, and the Court (Oliver J) expressly rejected a submission that proprietary estoppel was akin to estoppel by representation, determining that relief in the nature of proprietary estoppel did not require the landlord to know and take advantage of the tenant's mistake. Reference was also made to the judgment of Nettle J in Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd where his Honour said:[215]

The foundational principle on which equitable estoppel in all its forms is grounded is that equity will not permit an unjust or unconscionable departure by a party from an assumption or expectation of fact or law, present or future, which that party has caused another party to adopt for the purpose of their legal relations. Consequently, the notion that there is or should be some a priori distinction between the degree of objective certainty required to found a promissory estoppel compared to a proprietary estoppel runs counter to principle. The idea of 'one overarching doctrine of estoppel rather than a series of independent rules' may not yet have 'won general acceptance'. But, in as much as the recognised categories of equitable estoppel are instances of the operation of the more general foundational principle, the determination of whether it is unconscionable for the charged party to depart from an assumption or expectation created in the mind of the claimant must always depend on the particular facts and circumstances of the case. The recognised applications of established categories of promissory estoppel are not necessarily exhaustive of the cases in which equity will intervene [citing Taylors] and, even if they were, it would not follow that because it has been found in the context of one relationship that a designated level of certainty was required, the same degree of certainty would be necessary in the context of a different relationship or in different circumstances.

References were made to other authority, but Crown Melbourne makes clear that the foundation of equitable estoppel is that equity will not permit an unjust, unconscionable departure on the assumption or expectation of fact or law.[216]

121 Thus, the plaintiffs submit that the common misapprehension was the mutual assumption, until 22 August 2024, that the Club was still registered and that the consequential mutual belief that the Parkside Proprietors from time to time and their invitees were entitled to use, and did use, the Club Land and played tennis on it pursuant to the Lease.

1. These arguments can be readily disposed of. Before doing so, it is appropriate to first summarise the relevant principles. In Kramer v Stone [2024] HCA 48 (Kramer),[218] the High Court reaffirmed what is required for a party to make out a case in proprietary estoppel. At [37]-[40], Gageler CJ, Gordon, Edelman and Beech‑Jones JJ outlined the general principles thus:

(a) first, as with the requirement for representations in estoppels by representations generally, there must be a 'clear and unequivocal' promise made by the party estopped (the promisor) to the party who relies on the promise (the promisee);

(b) secondly, a reasonable person in the promisor's position must have expected or intended (or the promisor actually did expect or intend) that the promisee would rely upon the promise by some action, omission or course of conduct;

(c) thirdly, the promisee must have relied upon the promise by acting or omitting to act in the general manner that would have been expected. In order to establish reliance, it is ordinarily necessary for the promisee to show not merely that the promise was one factor taken into account in motivating the promisee's action or omission but that the promisee would not have acted or omitted to act in the absence of the promise. In other words, it must usually be shown that the promisee's reliance 'made a difference' to the promisee taking the course of action or inaction;

(d) fourthly, the consequence of the promisee's reliance must be that the promisee will suffer detriment if the promise is not fulfilled, in the sense that the promisee will be left in a worse position, as a consequence of reliance upon the promise, than if the promise had not been made.

1. The plaintiffs have not provided any adequate particulars of how the alleged representations were said to arise. In particular, they have pointed to no clear and unequivocal promise made by Hooker or Memart, whether by positive acts or silence.
2. Relevantly, it is to be noted that the members of the Club were, apparently, the Parkside Proprietors from time to time. That is what recital B of the Lease provided. Accordingly, in the absence of any knowledge by Memart that the Club had been deregistered, the fact Parkside Proprietors might have played tennis on Club Land from time to time would not convey to anyone else that they were playing tennis in their capacity as a private person and not as a member of the Club.
3. Indeed, it seems that even the residents themselves were not aware of what capacity they were playing tennis until the deregistration of the Club was brought to their attention in 2023.
4. More problematic for the plaintiffs' estoppel claim is that, unless the Parkside Proprietors give evidence, the OC cannot prove to whom the representations were made. As previously submitted, problems of proof are not cured by effecting an assignment. The cause of action assigned must still be proved.
5. Similarly, the plaintiffs cannot establish reliance by the Parkside Proprietors if they are not before the Court to give evidence.
6. Nor can the plaintiffs establish detriment.
7. For each of these reasons, the proprietary estoppel claim should be rejected.

In my view, Memart's submissions should be accepted on the bases put forward and on the basis of the application of the general principles articulated in Kramer. Moreover, I am not satisfied that the plaintiffs have established, even if there were a representation as they contend, any 'unjust or unconscionable departure' from any of those representations. In many respects, quite the contrary, as they, the Parkside Proprietors, enjoyed use of the Current Tennis Court as a result of the misapprehension by all concerned that the Club Land was subject to the Lease and that the Club remained registered from the date of its deregistration on 25 October 2001 until 2023, some 22 or so years. On one view, the plaintiffs have enjoyed the Club Land in circumstances where they were not entitled to do so, though it must be said that the OC or the Parkside Proprietors did maintain the Current Tennis Court and the Garden as would have been required were they to be entitled to use of the Club Land. It also follows from this position that the fact that the plaintiffs spent money on maintenance of the Current Tennis Court and Garden does not constitute any unconscionability in their favour. Rather, its expenditure ought reasonably to be regarded as properly flowing from their actual, but not entitled, use of the Club Land.

123 The plaintiffs claim that between 25 October 2001 and 30 July 2024 the OC, Parkside Proprietors and Memart conducted their relationship on the basis of a mutual assumption that the Lease was between Hooker and the OC otherwise continued according to its terms. Particular reference was made to the elements of estoppel by convention as summarised by the NSW Court of Appeal in Ryledar Pty Ltd v Euphoric Pty Ltd, as follows:[219]

(a) the plaintiff has adopted an assumption as to the terms of its legal relationship with the defendant;

(b) the defendant has adopted the same assumption;

(c) both parties have conducted their relationship on the basis of that mutual assumption;

(d) each party knew or intended that the other act on that basis; and

(e) departure from the assumption will occasion detriment to the plaintiff.

124 The plaintiffs claim that each party knew or intended that the other would act on the basis of that convention, and that the OC and the Parkside Proprietors did in fact act to their detriment on the basis of that convention. This is the basis alleged for a conventional estoppel against Memart.

125 More particularly, the plaintiffs confirm that they would rely upon the alleged 'Club Land Admission' and the 'Garden Admission' in support of their plea of conventional estoppel.[220] These admissions are said by the plaintiffs to arise out of the provisions of the notice of default, a claim which I have, in the preceding reasons, rejected.[221]

126 In light of the above and, particularly, in the absence of any detriment to the OC and the Parkside Proprietors for the same reasons as the claim of proprietary estoppel is rejected, I reject this claim that any conventional estoppel arises in their favour.

127 The first defendant, Memart, seeks declarations that:

(a) the lease entered into between Memart and the Club in 1987 and the licence to occupy the Garden were terminated on 15 or 22 August 2024; and

(b) Memart is entitled to exclusive possession of the whole of the land described in Certificate of Title Volume 10617 Folio 519 and located at 479 St Kilda Road, Melbourne.

128 As the plaintiffs' claims will, for the preceding reasons, all be dismissed, it follows that the declarations sought by way of counterclaim will be made in Memart's favour.

129 For the preceding reasons, the plaintiffs' claims will be dismissed and the declarations sought by Memart made as set out above.

130 I reserve the question of costs and will hear the parties on this issue as necessary.

131 The parties are to bring in orders to give effect to these reasons.

Since 24 October 1983, has the first plaintiff (the OC) been, by reason of the plan of strata subdivision SP020966P (strata plan), the registered proprietor of all of the common property described in certificate of title volume 12138 folio 959 and forming part of the land located at 481 St Kilda Road, Melbourne (Parkside Land)?

Since 17 June 2020, have the second and third plaintiffs (Rodgers and Browne) been the joint registered proprietors of lot 18 and accessory lots 67 and 91 on the strata plan?

Does the OC have the power to bring this proceeding:

(b) as assignee of the Parkside Proprietors other than Rodgers and Browne?

Did the OC committee enter into the agreement to lease as agent for the then proposed Parkside Tennis Club Inc (Club)? If so, what is the significance, if any, of this?

Was the Garden entered upon and maintained by the OC and/or others? If so, was this pursuant to a lease or a license?

The plaintiffs' alleged adverse possession of the Club Land or Garden

By issuing the Default Notice on 30 July 2024, has Memart admitted that the OC has been in factual possession of the Club Land and/or Garden since 25 October 2001, to the exclusion of all others, including Memart and its predecessors in title, and the Registrar?

If the answer to question 6 is no, did the OC (either as a matter of fact or by an assignment from the Parkside Proprietors other than Rogers and Browne) and/or the Parkside Proprietors and/or Rogers and Browne between about 1987 and August 2023:

(a) possess the Club Land and/or Garden or any part of them and, if so, which part(s); and/or

(b) intend to possess the Club Land and/or Garden or any part of them to the exclusion of all others including Hooker and its successors in title including Memart?

As a consequence of the answers to questions 6 or 7, has any of the OC, the OC as assignee of the Parkside Proprietors other than Rogers and Browne, or Rogers and Browne (and if so, which), gained title by possession to the Club Land and/or the Garden or any part of them? If so, when was Memart's title extinguished?

Deregistration of the Club and effect on the Lease

Upon the deregistration of the Club on 25 October 2001:

(a) Did the Club assign, demise, part with, share possession of or otherwise deal with the Club Land in breach of clause 6 of the Lease?

(b) Alternatively, did the Registrar part with possession or share possession of the Club Land by allowing or enabling the OC and/or the Parkside Proprietors or their invitees to possess, occupy or use the Club Land for their exclusive use and benefit to the exclusion of all others, in breach of clause 6 of the Lease?

(c) Alternatively, did the OC and/or the Parkside Proprietors and/or Rogers and Browne become 'the Lessee' under the Lease, entitling them to performance of the Lease?

(d) Alternatively, did the tenancy interest under the lease enure for the benefit of each of the Parkside Proprietors?

If the Club and/or the Registrar breached clause 6 of the Lease, was this a repudiation of the Lease in the circumstances entitling Memart to serve the Notice of Default on 30 July 2024 and to terminate the Lease on 15 August 2024?

Has Memart waived any right to allege that the occupation of the Club Land by the OC and/or the Parkside Proprietors and their invitees constitutes a breach of the Lease?

Is Memart barred from obtaining relief in respect of any breach of the Lease arising from occupation of the Club Land by the OC and the Parkside by reason of s 5(1)(a) of the Limitation of Actions Act 1958?

Did Memart or its predecessors in title grant a sublease to the OC by reason of the OC's alleged occupation of the Club Land?

(a) Did the sublease render the Default Notice and termination of the lease invalid?

(b) Is the OC entitled to performance of the sublease?

(c) Does s 139(1) of the Property Law Act 1958 and s 42(2)(e) of the Transfer of Land Act 1958 operate in relation to the sublease?

(d) Alternatively, did the sublease constitute a breach of clause 6 of the Lease?

Has Memart waived any right to allege that the sublease constitutes a breach of the Lease?

Is Memart barred from obtaining relief in respect of any breach of the Lease arising from the sublease by reason of s 5(1)(a) of the Limitation of Actions Act 1958?

Did Hooker and/or Memart represent to the OC and the Parkside Proprietors that they and their invitees had a proprietary interest in the Club Land and Garden (i.e., the representations), which was relied upon by the OC and Parkside Proprietors with Hooker/Memart's knowledge, such that Memart is now estopped from resiling from the representations?

If the answer to question 17 is yes, did the OC and the Parkside Proprietors reasonably rely on the representations?

If the answer to question 18 is yes, did Hooker and/or Memart know that the OC and the Parkside Proprietors acted in reliance upon the representations?

If the answer to question 19 is yes, would the OC and the Parkside Proprietors suffer detriment if Memart were permitted to resile from the representations?

Did Hooker and its successors in title, including Memart, and the OC and the Parkside Proprietors, conduct their relationship between 25 October 2001 and 30 July 2024 pursuant to a mutual assumption that the Lease was between Hooker and the OC, with the intent that each of Hooker, Memart, the OC and the Parkside Proprietors intend the other to would act on the basis of that convention and did in fact so act, such that Memart is now estopped from resiling from the convention?

Has Memart committed an act of trespass against the OC, such that it is entitled to an award of damages? If so, what is the appropriate remedy?

Has Memart breached the right of the OC and the Parkside Proprietors to quiet enjoyment such that they entitled to an award of damages? If so, what is the appropriate remedy?

Is Memart entitled to the relief sought under its counterclaim?

[3] See, for example, the references at CB229, CB260, CB264 and CB278.

[6] See, for example, CB212; CB217; CB223.

[9] Lochlinton Pty Ltd. See CB1382: Joint Chronology at 15 June 1982.

[11] Agreement to lease, recital C, 6 November 1986, (CB 230); Lease, recital C, 1987, (CB 254).

[12] 'Parkside' House Rules, March 1985, (CB 208).

[15] Agreed Statement of Facts, [11].

[16] Agreed Statement of Facts, [10].

[18] See Memart's Written Closing Submissions (15 October 2025), [21]-[34].

[19] Plaintiffs' Written Opening Submissions (6 October 2025), [29]-[33].

[20] Memart's Written Closing Submissions (15 October 2025), [21]-[34].

[24] CB[195]; Although the circular is addressed, 'Dear Member', it is clear in the body of the document that this is a reference to the 'Parkside Body Corporate members' i.e., the residents.

[32] The rules are at CB[178]-[191].

[36] Recorded in circular to Parkside proprietors from Inscor Services Pty Ltd, body corporate manager, on 8 April 1988 - CB[291].

[43] Agreed Statement of Facts, [17].

[44] Agreed Statement of Facts, [18].

[45] Correspondence between the OC, Hooker, Glenvill Homes and the Parkside Proprietors between 22 January 1987 and 16 June 1987, (CB 266-275).

[47] Further Amended Statement of Claim (30 May 2025) (FASOC), [20]; Defence and Counterclaim, [20].

[48] Plaintiffs' Written Opening Submissions (6 October 2025), [34].

[61] T111.5-6. See also T111.14-15; T104.27-105.5.

[63] The Export-Import Bank of China v CSTT Co Holdings Pte Ltd [2025] VSC 475, [92]-[94] (Delany J), and the authorities there cited.

[64] See Memart's Written Closing Submissions (15 October 2025), [40]-[52].

[72] Memart's Written Closing Submissions (15 October 2025), [48]-[52].

[73] Plaintiffs' Written Opening Submissions (6 October 2025), [39]-[42].

[74] The title particulars to the 481 St Kilda Road Land are as more particularly described in Certificate of Title Volume 12138 Folio 959, and the current Parkside Proprietors are recorded in title searches for each of the lots on the Parkside Land.

[76] Deeds of Assignment for each of the current Parkside Proprietors (other than Rogers and Browne), various dates, (CB 519-662).

[79] [2015] VSC 160, [4], [42].

[80] Bateman's Bay (1998) 194 CLR 247, 264 [43] (Gaudron, Gummow and Kirby JJ). Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd [2000] HCA 11; (2000) 200 CLR 591, [88] (Gummow J).

[81] Memart's Written Closing Submissions (15 October 2025), [76]-[81].

[82] See, for example, s 134 Property Law Act 1958 (Vic); Norman v FCT [1963] HCA 21; (1963) 109 CLR 9, 30 per Windeyer J; Yoo v Toppro Pty Ltd [2016] NSWSC 670, [40]-[45].

[83] LL Up Pty Ltd v Kegland Distribution Pty Ltd [2024] VSC 651, [319] per Croft J, referring to an extract from PW Young, CE Croft and ML Smith, On Equity (Law Book Co, 2009), 718 [10.370].

[86] (1967) 119 CLR 469, 478-9 (plaintiffs' emphasis).

[87] [1988] HCA 44; (1988) 165 CLR 107, 143.

[89] Memart's Written Closing Submissions (15 October 2025), [90]-[99].

[90] See, for example, Trident v McNiece, 119-121 per Mason CJ and Wilson J; 138 per Brennan J; 144-‍145 per Deane J.

[91] See also Benson v Rational Entertainment Enterprises Ltd [2018] NSWCA 111; (2018) 97 NSWLR 798, [112]-[115] per Leeming JA, with Beazley P and Emmett AJA agreeing.

[92] The Former Act was replaced by the Current Act with effect from 1 July 2013.

[93] Former Act, s 36F(1)(a); Current Act, s 140(2).

[94] Plaintiffs' Written Opening Submissions (6 October 2025), [49]-[52].

[95] FASOC, [35]-[38G], (CB 68-71).

[96] Ibid, [39]-[41], [46], (CB 71-73).

[97] Ibid, [47]-[49], [54], (CB 73-75).

[98] Ibid, [55]-[56], [61]-[62], (CB 76-77).

[100] Ibid, [69A]-[69H], (CB 80-82).

[103] Ibid, [42]-[46], [50]-[54], [57]-[60], (CB 72-77).

[104] Defence and Counterclaim, [72], (CB 114).

[107] (1873) 29 LT (NS) 592, 595.

[108] [2001] UKPC 25; [2001] 1 WLR 1651, [10].

[109] B Edgeworth, Butt's Land Law (7th Ed., Lawbook Co, 2017) (Butt's Land Law), 1103 [16.110], citing Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464 (Mulcahy), 475 (Bowen CJ in Eq), which was cited with approval in Marin v Gill [2025] NSWSC 385, [35]. See also Re Riley and the Real Property Act (1964) 82 WN (Pt 1) NSW 373, 380 (McLelland CJ in Eq).

[110] See, for example, Gianchino v Gianchino (2023) 73 VR 306, [29] (Beach, Forrest and Osborn JJA).

[112] [2009] VSCA 188; (2009) 259 ALR 56.

[113] [2009] VSCA 188; (2009) 259 ALR 56, [6(a)] (plaintiffs' emphasis).

[114] Plaintiffs' Written of Opening Submissions (6 October 2025), [66].

[115] [2009] VSCA 188, [5(2)] citing Ashley J in Bayport Industries v Watson [2002] VSC 206.

[127] Memart's Written Closing Submissions (15 October 2025), [123]-[124].

[128] Mulcahy, 476; Zhang v Streeter [2024] VSC 816 (Zhang), [88] (Ginnane J).

[129] Allen v Roughley [1955] HCA 62; (1955) 94 CLR 98, 118 (Williams J); Shelmerdine v Ringen Pty Ltd [1993] VicRp 23; (1993) 1 VR 315, 341 (Brooking J); see also Butt's Land Law, 1112 [16.240].

[130] Cooke v Loxley [1792] EngR 3196; (1792) 5 TR 4; Cuthbertson v Irving [1859] EngR 767; (1859) 4 H & N 742; (1860) 6 H & N 135, as explained in Industrial Properties (Barton Hill) Ltd v Associated Electrical Industries Ltd [1977] EWCA Civ 1; [1977] QB 580; see also Mackley v Nutting [1949] 2 KB 55: see also Megarry & Wade Law of Real Property (8th ed), 798, 799 [17‑125] and at 1472 where it is stated (with reference to [17‑125] that 'occupation by a tenant is never adverse to the landlord's title, which the tenant is estopped from denying').

[131] Radaich v Smith (1959) CLR 209; and see Swan v Uecker [2016] VCAT 483; (2016) 50 VR 74.

[132] R v Toohey; Ex parte Meneling Station Pty Ltd [1982] HCA 69; (1982) 158 CLR 327, 352.

[133] Accordingly, the land will be held by the registered proprietor subject to the sublease as an encumbrance on the land: s 42(2)(e) of the Transfer of Land Act 1958.

[134] Memart's Written Closing Submissions (15 October 2025), [114]-[118]; it should be noted that the plaintiffs raise a pleading point against Memart with respect to ss 10 and 14 of the LOAA, namely that these provisions, as bars, should have been pleaded. In my view there is no substance in this point as these provisions are, in the present context, matters which must, intrinsically, be addressed as issues raised by the plaintiffs' case with which it and they must deal: a position which is confirmed, at least in general principle by Dalton J in Eckford v Stanbroke Pastoral Co Pty Ltd (2012) 2 Qd R 323, 323-5, [4]-[9].

[136] Fairweather v St Marylebone Property Co Ltd [1962] UKHL 1; [1963] AC 510, 536.

[137] Chung Ping Kwan v Lam Island Development Co Ltd [1996] UKPC 23; [1997] AC 38, 46.

[138] Memart's Written Closing Submissions (15 October 2025), [128]-[142].

[139] The Rules of the Club are at CB[176]. Pursuant to rule 4(2), each Parkside Proprietor automatically qualifies for membership of the Club. Further, Recital B of the Lease CB[254] provides that the Lessee (i.e., the Club), is comprised of the registered proprietors.

[145] T[86.15]-[87.9]; T[115.15-18].

[146] Plaintiffs' opening submissions at [130]. In Zhang, Ginnane J observed at [83] that the act of erecting and maintaining fences around the land in question is usually strong evidence of occupation with the intent to exclude all others. However, his Honour emphasised that each case is to be decided on its own particular facts.

[147] I.e. the defendant's submissions as to the plaintiffs' problems with Memart's reversionary interest, not having been an interest in possession for the purposes of the limitation period under the LOAA prior to determination of the Club Lease: see Memart's closing submissions (15 October 2025) [114]-[118] and T158-9; and see above, [69].

[148] Plaintiffs' opening submissions at [106]-[116].

[153] Agreed Statement of Facts, [7].

[154] Agreed Statement of Facts, [20].

[155] Agreed Statement of Facts, [19].

[156] Defence and Counterclaim, [25(b)].

[157] Expenditure Reports by Parkside Tennis Club Inc from 2006 to 2024 and expenditure transaction lists and financial statements, 2006 to 2024, (CB 664-1115).

[160] Defence and Counterclaim, [20A]; Memart's response to request for further and better particulars dated 18 March 2025.

[161] Lease, recital D, 1987, (CB 255).

[162] Lease, clause 4(a), 1987, (CB 255).

[163] Lease, recital E, clause 4(a), (CB 255-6).

[164] See Plaintiffs' Written Opening Submissions (6 October 2025), [100]-[102].

[165] FASOC, [38E]; Defence and Counterclaim, [38E].

[166] [2012] QCA 39; [2012] 2 Qd R 448.

[167] [1996] FCA 1502; (1996) 67 FCR 301.

[170] A copy of the Agreement to Lease is at CB229.

[172] See Recital B of the Agreement for Lease.

[173] Wilkie v Gordian Runoff Ltd[2005] HCA 17; (2005) 221 CLR 522, [15].

[174] JA Morrison and HJ Goolden, Norton on Deeds (2nd ed), Sweet & Maxwell, 1928, 195.

[175] JA Morrison and HJ Goolden, Norton on Deeds (2nd ed), Sweet & Maxwell, 1928, 197.

[176] See Nicholas Seddon, Seddon on Deeds (The Federation Press, 2022), [5.3] 220-1; citing Campbell JA in Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407, [379]-[390], regarding the narrative role of recitals to a deed. See also Sir Kim Lewison & David Hughes, The Interpretation of Contracts in Australia (Thomson Reuters, 2nd ed, 2025), [3.16.1] 168-72 regarding recitals as an aid to construction.

[178] [1940] 1 KB 271.

[179] [1965] 1 WLR 1025.

[180] Harvey v Pratt [1965] 1 WLR 1025, 1026-7 (footnotes omitted).

[181] Nurse v Frampton [1864] EngR 855; [1694] 1 Ld Raym 28; 19 ER 915.

[185] See the witness outlines of Ms Zoe Solomon, Ms Evelyn Danos, and Mr Milton Lasnitzki.

[186] Agreed Statement of Facts, [23]-[24].

[190] Agreed Statement of Facts, [27].

[192] See above [50], [97] and [100].

[194] Plaintiffs' Written Closing Submissions (15 October 2025), [10]-[19].

[195] Re Riggs [1901] UKLawRpKQB 62; [1901] 2 KB 16; Solomon v Winkler [1922] SAStRp 53; [1922] SASR 428.

[196] Radaich v Smith [1959] HCA 45; (1959) 101 CLR 209, 217 (Taylor J).

[197] Lam Kee Ying v Lam Shes Tong [1975] AC 247, 265, cited in Ace Property Holdings Pty Ltd v Australian Postal Corporation [2010] QCA 55; [2011] 1 Qd R 504, 531-4.

[198] Plaintiffs' Written Opening Submissions (6 October 2025), [153]-[157].

[199] Letter sent by the James Richardson Group on behalf of Memart Investments Pty Ltd to the Registrar, courtesy of Consumer Affairs Victoria, 11 May 2023 (CB 491). Clause 2 states 'When Memart acquired the Property it was on notice of a lease related to the tennis court between the former owner of the Property (Hooker Corporation Limited) and Parkside Tennis Club Incorporated'; Advice from Allens Arthur Robinson to Memart Investments Pty Ltd, 9 October 2001, (CB 385-386). At clause 4.1, it states that 'Annexure 3 of the Contract of Sale specifically identifies the Lease between Hooker Corporation Limited and [the Club]'. This is presumably a reference to the contract of sale between Memart and its predecessor in title, which has only very recently been discovered in the proceeding, despite previous requests. Memart's immediate predecessor in title, Dun & Bradstreet Pty Ltd, was also aware. See: Letter from Allens Arthur Robinson & Hedderwicks to Mr Brian Wiklson of Richard Ellis Pty Ltd, 3 July 1998, (CB 383-‍384).

[200] As above, the contract of sale between Memart and its predecessor in title has not been discovered in the proceeding.

[201] Historical Search Statement Volume 10617 Folio 591, (CB 1162).

[202] Larking v Great Western (Nepean) Gravel Ltd [1940] HCA 37; (1940) 64 CLR 221.

[203] Memart's Written Closing Submissions (15 October 2025), [182]-[189].

[204] Plaintiffs' opening submissions, [152]-[155].

[205] See the evidence of Ms Danos and Ms Solomon.

[206] Markham v Paget [1908] UKLawRpCh 33; [1908] 1 Ch 697.

[207] Hudson v Cripps [1895] UKLawRpCh 188; [1896] 1 Ch 265.

[208] Lavender v Betts [1942] 2 All ER 72.

[209] [2023] VSC 558.

[210] Gurappaji v Duncan, [178]-[181] (citations omitted). Among other cases, her Honour relied upon Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583; Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505; Donis v Donis [2007] VSCA 89; (2007) 19 VR 577 and Ramsden v Dysin & Anor [1866] UKLawRpHL 7; (1866) LR 1 HL 129. See also Laird v Vallance (as Admin for estate of Laird, (decd)) [2023] VSCA 138, [51] (Beach and Osborn JJA).

[214] [1982] QB 133.

[215] [2016] HCA 26; (2016) 260 CLR 1, [217].

[216] See Memart's Written Closing Submissions (15 October 2025), [28]-[33].

[217] Memart's Written Closing Submissions (15 October 2025), [195]-[202].

[218] In this decision Gageler CJ, Gordon, Edelman and Beech-Jones JJ said at [32] that an estoppel arising from a promise upon which a plaintiff claims an entitlement to new property rights, such as a conveyance of land or 'trust', has been described as promissory estoppel, proprietary estoppel or, more generally, as estoppel by conduct and equitable estoppel but that there was no occasion to consider whether there was any difference between those descriptions or whether there was any 'single overarching doctrine' of estoppel.

[219] [2007] NSWCA 65; (2007) 69 NSWLR 603, [200], citing Moratic Pty Ltd v Gordon [2007] NSWSC 5; (2007) ANZ ConvR 198, [30] (Brereton J).