The Owners - Strata Plan 81837 v Multiplex Hurstville Pty Ltd

Solicitors: Chambers Russell Lawyers (Plaintiff) Ashurst Australia (First Defendant) Baron + Associates (Second Defendant) File Number(s): SC 2016/51484

Judgment

1. In June 2002 Sydney Land Holdings Pty Ltd ("SLH") purchased an industrial site in Hurstville ("the Property").
2. In December 2003 SLH submitted a development application to the local council for redevelopment of the Property as a mixed residential, retail and commercial development comprising seven buildings ("the Project").
3. SLH obtained development consent in June 2004. It became the registered proprietor in July 2004.
4. On 22 June 2005 SLH, and a number of other companies, including SLH 22 Pty Ltd, entered into a "Development Management Agreement" ("the DMA") with Multiplex Hurstville Pty Ltd.
5. The DMA is central to the dispute before me. By the DMA, SLH and the other parties appointed Multiplex as development manager of the Project.
6. By the DMA Multiplex: 1. was authorised to and obliged to select a builder to construct the Project and procure that the builder enter into a building contract with Multiplex to carry out the Project works; and 2. agreed to ensure that the builder was the holder of licence under the Home Building Act 1989 (NSW) ("the HBA") to the extent that the Project works involved residential building work within the meaning of the HBA.
7. The DMA contained detailed provisions concerning the manner in which Multiplex would manage the development. I will return to them.
8. There are 12 parties to the DMA. Apart from SLH and Multiplex, they include eight companies which were together defined as the "Trustees". SLH 22 was one of the Trustees. Each of the Trustees entered the agreement as trustee for a named trust. In the case of SLH 22 it entered the DMA as trustee for the River 2 Trust No 2 (which I will call the "River Trust"). There were two other parties to the DMA whose role is not relevant.
9. In 2007 Multiplex entered into a Design and Construct contract ("the D&C Contract") with Baseline Constructions Pty Ltd to construct the Project. Baseline had a contractor licence under the HBA and was permitted to do the work. Baseline carried out the work.
10. Multiplex was not licensed to carry out residential building work and would have committed an offence had it constructed the Project.
11. Although the DMA contemplated that up to seven buildings might be constructed on the Property, only two buildings were built before the Project was discontinued.
12. One of them is the Vantage building. It comprises 116 residential apartments.
13. On 7 May 2009 Strata Plan 81837 was registered in respect of the land on which the Vantage building is erected.
14. On registration of the strata plan, the plaintiff Owners Corporation came into existence and became the registered proprietor of the common property of the Vantage apartments.
15. The Owners Corporation alleges that the Vantage building has a number of defects.
16. Section 18B of the HBA implies warranties into every contract to do residential building work, including warranties that the "work will be done with due care and skill" and "that all materials supplied by the holder or person will be good and suitable for the purpose for which they are used" ("the Statutory Warranties").
17. The Owners Corporation had the benefit of the Statutory Warranties by reason of ss 18C and 18D of the HBA, against both SLH (as an "owner" and "developer" of the building) and Baseline (as the builder). Those warranties are evidently thought to be of no value. SLH is deregistered and Baseline is subject to a deed of company arrangement.
18. The Owners Corporation now looks to Multiplex and to SLH 22. It contends that those companies were "owners" and thus "developers" of the Property within the meaning of s 3A of the HBA, that it is the "successor in title" to those companies for the purposes of s 18C of the HBA and that it has benefit of the Statutory Warranties against those two companies.
19. Against that background, the Court has ordered pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 28.2 that a number of questions be determined separately and in advance of other questions in the proceedings.
20. There are 20 such questions. However the parties agree that in substance the matters for separate determination are: 1. whether either Multiplex or SLH 22 was an "owner" (and thus a "developer") of the land within the meaning of the HBA; 2. if so, whether the Owners Corporation is a "successor in title" to Multiplex or SLH 22 (as "developer") for the purposes of s 18C of the HBA; and thus entitled to the benefit of the Statutory Warranties against those companies; 3. alternatively, whether the DMA was itself a contract to do residential building work and thus a contract into which the Statutory Warranties were implied; and 4. whether certain representations, made by Multiplex to a principal certifying authority ("PCA") under Pt 4A of the Environmental Planning and Assessment Act 1979 (NSW) ("the EPA Act"), were made "in trade or commerce" for the purposes of ss 52 and 53 of the Trade Practices Act 1974 (Cth) or Pt 5 of the Fair Trading Act 1987 (NSW).

Decision

1. In my opinion, the answer to each of these questions is "no".

The DMA

1. The relevant parties to the DMA are SLH, the eight Trustees and Multiplex.
2. SLH and the Trustees are together defined as the "Contracting Party" as follows: "Contracting Party means SLH in its capacity as agent, nominee and trustee for each of the Trustees and, where the context permits, each of the Trustees".
3. I will return to the significance of this definition when dealing with the Owners Corporation's case against SLH 22.
4. The covenants in the DMA are expressed to be between Multiplex and the "Contracting Party".
5. For simplicity, I will refer to the parties to the DMA as being SLH itself and Multiplex until the context otherwise requires.
6. The DMA is a complicated document. Its terms occupy 57 closely typed pages. The key provisions of the DMA may be summarised as follows.

Management of the Project

1. By cl 1.1 SLH appointed Multiplex "as its development manager" to do all things that Multiplex would be legally entitled to do "if it were the owner of the Property". Those included "to procure the construction of improvements as contemplated by the Project" (cl 1.1(e)) and "to effect the marketing and sale of the subdivided lots created as part of the Project" (cl 1.1(h)). The various steps that Multiplex agreed to do or procure were defined as the "Development Management Services".
2. By cl 2.1 Multiplex agreed to undertake the Project and to provide the Development Management Services. It also agreed to: 1. procure that the Project was carried out as it determined in "its sole and unfettered discretion" (albeit considering SLH's entitlement to part of the "Sale Proceeds": see below) (cl 3.1); 2. pay all "Project Costs" (cl 2.2); 3. select and contract with a builder that held a licence under the HBA to carry out residential building work (as I have mentioned, Multiplex engaged Baseline to do this) (cl 3.2); 4. supervise and monitor the building work (cl 3.4); 5. have conduct and carriage of all issues associated with all relevant development applications (the "Project DA") (cl 5.1); and 6. effect all necessary insurances (cl 17.1).
3. SLH appointed Multiplex as its attorney to sign any document contemplated by cl 1.1 and to do all things Multiplex would be legally entitled to do "if it were the owner" of the Property (cl 1.2).
4. SLH agreed to execute all documents and do all things necessary as reasonably required by Multiplex in connection with the Project (cl 4.1(a)-(b)).

Title and possession

1. SLH remained registered proprietor of the Property.
2. However it agreed to deliver all title documents to Multiplex (cl 1.3) and to grant Multiplex vacant and exclusive possession of the property (cl 14.1).
3. SLH agreed that it would not "assign, sell, lease, mortgage or charge" the property or "sell, lease, charge or otherwise deal with or dispose of any interest in the property" without Multiplex's consent (cll 4.2(c) and 21.1).
4. By cl 7.1 SLH and Multiplex agreed to be parties to all "Sale Contracts", with: 1. SLH as "vendor", at the direction Multiplex, and with its obligations confined to transferring title and procuring the discharge of mortgages and other encumbrances; and 2. Multiplex as the party otherwise assuming "all responsibilities and obligations under those Sale Contracts".

Sale proceeds

1. SLH was "entitled to all Sale Proceeds" (cl 9.1).
2. All of the monies received in respect of the Project were to be paid into a "Sale Proceeds Account", to be opened by Multiplex and over which Multiplex could grant a charge in favour of a financier (cll 11.1, 11.4 and 11.5).
3. SLH authorised Multiplex to apply those monies (defined as the "Project Return") to repay any "senior debt financier" and thereafter to pay itself and SLH their entitlements under the DMA as set out below (cl 12.2).

The financial entitlements of the parties

1. In consideration for the "Development Rights", Multiplex agreed to guarantee to SLH that the "Nominated Sale Proceeds" would be not less than the "Guaranteed Minimum Return" (cl 6.1).
2. For its part, SLH agreed to pay Multiplex a "Development Management Fee" for Multiplex's provision of the Development Management Services (cl 8.1). The Development Management Fee was to be "in an amount equal to": 1. the Sale Proceeds plus "an amount equivalent to" the income derived from the Property, including "any rent, licence fee or other money paid by any person for use or occupation of any part of the property" (cll 8.2 and 9.2); less 2. the total of the "Guaranteed Minimum Return plus a specified share of the Gross Proceeds of sale of the units in the development" (cl 8.2).
3. By cl 8.3 Multiplex was required to pay SLH 50 per cent of the Gross Proceeds of the Sale Contracts once the "Face Value of Completed Contracts" exceeded a nominated amount. Multiplex could then retain the balance on account of its Development Management Fee.

The HBA provisions

1. By cl 17.3, to the extent that the work to be executed in accordance with the DMA (described as "Multiplex's works") was residential building work within the meaning of the HBA, Multiplex gave SLH warranties substantially the same as the Statutory Warranties.
2. By cl 17.3(h) Multiplex acknowledged that the warranties "formed part of this document by virtue of the requirements of the Home Building Act, and cannot be excluded".
3. By cl 17.4 SLH acknowledged that, notwithstanding that Multiplex gave those warranties, Multiplex had "not contracted to do work" in contravention of Div 1 of Pt 2 of the HBA (that is residential building work).
4. Evidently for more abundant caution, the DMA then provided that, if a contravention of the HBA was found to exist, SLH would indemnify Multiplex in relation to any benefit it thereby gained (cl 17.4(b)).

Call option

1. Finally, by cl 20.1 Multiplex was entitled to "call for the Property" or the parts of the Property that had not been by then transferred to purchasers under Sale Contracts.
2. Clause 20.1 made provision for the consideration to be paid by Multiplex if it exercised the call assuming, first, that SLH was in default under the DMA, and second, that it was not in default.
3. If SLH was in default at the relevant time, then the consideration paid by Multiplex was equal to the Guaranteed Minimum Return less any Nominated Sale Proceeds which had been received plus an amount equivalent to the amount that SLH would have been entitled to receive under cl 8.3.
4. If, as was the fact, SLH was not in default at the time Multiplex exercised its call option, Multiplex was obliged to pay a nominated dollar figure "at the time the Property (or any part of it) is transferred" (cl 20.1(c) and in particular cl 20.1(c)(i)).
5. Clause 20.1(d) provided that if Multiplex exercised the call option it could "effect that transfer" by exercising the power of attorney granted to it by SLH under cl 1.2.

Was Multiplex an "owner" of the land for the purposes of the HBA?

1. "Owner" is defined in Sch 1 of the HBA as follows: "[O]wner of land means the only person who, or each person who jointly or severally, at law or in equity: (a) is entitled to the land for an estate of freehold in possession, or (b) is entitled to receive, or receives, or if the land were let to a tenant would be entitled to receive, the rents and profits of the land, whether as beneficial owner, trustee, mortgagee in possession or otherwise."
2. This definition of owner is commonly used in land tax legislation and in local government legislation.
3. That wording has been considered in a large number of authorities.
4. Dr Bell SC, who appeared with Mr Hutton for Multiplex, submitted that these authorities should constitute the Court's "primary guide" as to the meaning of the definition of "owner" in the HBA.
5. On the other hand, Mr Bambagiotti, who appeared for the Owners Corporation, submitted that the use of authorities dealing with "analogous statutes" is of "little weight in the determination of this case".
6. Mr Bambagiotti submitted that the objects of the land tax and other legislation considered in earlier cases are different to the objects of the HBA. He submitted that this warrants a different construction of "owner" in the HBA; notwithstanding the manner in which that the same definition has been construed in other legislation.
7. The approach to statutory interpretation of well established wording is set out in the authorities to which I will now turn. I will then consider the circumstances in which the definition of "owner" was inserted into the HBA.

Like wording

1. In Wik Peoples v The State of Queensland (1996) 187 CLR 1; [1996] HCA 40 Brennan CJ said at 76: "…the ordinary rules of interpretation require that, in the absence of any contrary indication, the use in a statute of a term that has acquired a technical legal meaning is taken prima facie to bear that meaning…". (Citations omitted.)
2. In Re Alcan Australia Ltd; Ex Parte Federation of Industrial, Manufacturing and Engineering Employees (1994) 181 CLR 96; [1994] HCA 34 at 106 the Court (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ) said: "There is abundant authority for the proposition that where the parliament repeats words which have been judicially construed, it is taken to have intended the words to bear the meaning already 'judicially attributed to [them]' although the validity of that proposition has been questioned". (Citations omitted.)
3. In that case, their Honours concluded that the "presumption is considerably strengthened" by the legislative history of the legislation there in question.
4. On the other hand, in Electrolux Home Products Pty Ltd v Australian Workers' Union (2004) 221 CLR 309; [2004] HCA 40, Gleeson CJ said (at [8]): "No doubt there are circumstances in which it is artificial, and unpersuasive, to attribute to Parliament a consciousness of a judicial interpretation which might have been placed upon an expression, perhaps years before, and in some different context."
5. I do not place great weight on the fact that many of the earlier cases deal with land tax. In Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (1981) 147 CLR 297; [1981] HCA 26 Mason and Wilson JJ said, at 323, of the Income Tax Assessment Act 1936 (Cth): "The fact that the Act is a taxing statute does not make it immune to the general principles governing the interpretation of statutes. The courts are as much concerned in the interpretation of revenue statutes as in the case of other statutes to ascertain the legislative intention from the terms of the instrument viewed as a whole."
6. In those circumstances, I accept Dr Bell's submission that an important starting point in the interpretation of the definition of "owner" in the HBA is the manner in which indistinguishable words have been earlier construed and that I should only depart from the body of law so developed for good reason.
7. Here, the circumstances in which the definition of "owner" was introduced into the HBA suggests that Parliament was conscious of the manner in which the definition had been earlier construed.

The amendments to the HBA

1. The definition of "owner" was inserted into the HBA by the Home Building Amendment (Warranties and Insurance) Act 2010 (NSW) ("the 2010 Amending Act").
2. The 2010 Amending Act also inserted into the HBA a definition of "non-contracting owner" as well as ss 18D(1A), 18D(1B) and s 18D(2) which conferred rights on "non-contracting owners" (a matter not relevant to this dispute).
3. In Ace Woollahra Pty Ltd v The Owners - Strata Plan 61424 (2010) 77 NSWLR 613; [2010] NSWCA 101, the Court of Appeal held that where the owner of land did not contract with the builder, the residential building work carried out by the builder was not done "on behalf" of the owner; and that therefore the owner was not a developer (Sackville AJA at [52] and [53], Tobias and McColl JJA agreeing).
4. The object of the amendments was to remedy the difficulty perceived to result from this decision and to extend liability, as a "developer", to an owner of land even if that owner did not contract with the builder.
5. The HBA was further amended in 2011 by the Home Building Amendment Act 2011 ("the 2011 Amending Act"). The 2011 Amending Act amended ss 3A and 18C of the HBA.
6. Prior to the 2011 amendments, s 3A was in this form: "3A Application of provisions to developers (1) For the purposes of this Act, …a corporation on whose behalf residential building work is done in the circumstances set out in subsection (2) is a developer who does the work. (2) The circumstances are: (a) the residential building work is done in connection with [a]… proposed…residential development where 4 or more of the…proposed dwellings…will be owned by the…corporation… (3) A company that owns a building under a company title scheme is not a developer for the purposes of this Act."
7. Prior to the 2011 amendments, s 18C was in the same form as the current s 18C(1), relevantly: "18C Warranties as to work by others A person who is the immediate successor in title to…a developer who has done residential building work on land is entitled to the benefit of the statutory warranties as if the…developer were required to hold a contractor licence and had done the work under a contract with that successor in title to do the work."
8. The 2011 Amending Act inserted s 3A(1A) and an explanatory "Note". Thus, the current form of s 3A that is relevant is: "3A Application of provisions to developers (1) For the purposes of this Act, …a corporation on whose behalf residential building work is done in the circumstances set out in subsection (2) is a developer in relation to that residential building work. (1A) Residential building work done on land in the circumstances set out in subsection (2) is, for the purpose of determining who is a developer in relation to the work, deemed to have been done on behalf of the owner of the land (in addition to any person on whose behalf the work was actually done). Note. This makes the owner of the land a developer even if the work is actually done on behalf of another person (for example, on behalf of a party to a joint venture agreement with the owner for the development of the land). The other person on whose behalf the work is actually done is also a developer in relation to the work. (2) The circumstances are: (a) the residential building work is done in connection with [a]…proposed…residential development where 4 or more of…proposed dwellings…will be owned by the individual, partnership or corporation, or … (3) A company that owns a building under a company title scheme is not a developer for the purposes of this Act."
9. The 2011 Amending Act added s 18C(2). The current form of s 18C is thus (relevantly): "18C Warranties as to work by others (1) A person who is the immediate successor in title to…a developer who has done residential building work on land is entitled to the benefit of the statutory warranties as if the…developer were required to hold a contractor licence and had done the work under a contract with that successor in title to do the work. (2) For the purposes of this section, residential building work done on behalf of a developer is taken to have been done by the developer."
10. The effect of the amendments to s 3A was to deem the "owner" to be a "developer" if the circumstances set out in s 3A(2) obtained.
11. This was explained in the "Note" to s 3A(1A).
12. So far as concerns successors in title to a "developer" (as well as others not relevant here), the addition of subsection (2) to s 18C had the result that residential building work done "on behalf of" a developer is taken to be done "by" the developer.
13. The effect of this is that an immediate successor in title to a developer who is deemed to have done the residential building work by s 18C(2), is entitled to the benefit of the Statutory Warranties against that developer "as if" it held a contractor licence and had done the residential building work with that successor in title.
14. In the Second Reading Speech for the 2011 Amending Act, the Minister said: "One of the most important requirements in the Act for developers is that they assume the same level of responsibility for the statutory warranties as the builder. This gives a homeowner the greatest chance of recovering any losses from defective or incomplete work. … Accordingly, the Government is moving swiftly to rectify this situation for affected homeowners by amending the definition of "developer" in the Act. The revised definition of "developer" will ensure that the owner of the land who also owns, or will own, four or more of the units in the development, is considered to be a developer, regardless of whether they entered into the contract with the builder. As a result, developers will continue to assume the same level of responsibility for the statutory warranties as they did before the Court of Appeal decision [in Ace Woollahra]." (Home Building Amendment Bill 2011 (NSW), Second Reading Speech, 19 October 2011.)
15. The target of both the 2010 and the 2011 Amending Acts was an owner who had not contracted with a builder, and who, prior to the amendments, was not deemed to be a "developer". The amendments were not directed to a development manager who did contract with a builder on behalf of the owner, and who managed the development.
16. Parliament's attention was not directed to some controversy or uncertainty as to what "owner" means.
17. Parliament could have left the word "owner" undefined; in which event it would have its common law meaning.
18. Instead, Parliament adopted a definition that has a lengthy legislative pedigree and has been considered in many cases.
19. I see no reason to assume or infer that Parliament intended the words it chose to have other than their established meaning.
20. Rather Parliament was seeking to ensure that an "owner" would, in the circumstances I have set out, be taken to be a "developer" notwithstanding the fact that it did not contract with the builder.
21. Looking at this case, the effect of these amendments was to make SLH a "developer" notwithstanding the fact that it was not a party to the D&C Contract with Baseline.
22. The definition of "owner" in the HBA has been described as an "extended" definition of "owner" (Gardez Nominees Pty Ltd v NSW Self Insurance Corporation [2016] NSWSC 532 at [3], [63] and [103] (Hammerschlag J).
23. The fact that an "extended" definition of "owner" was introduced into the HBA also suggests to me that it is more likely that Parliament should be taken to have extended the definition of "owner" by using language which had received considerable judicial attention over a long period.
24. Further, as Dr Bell and Mr Hutton submitted, the definition of "owner" invokes technical concepts of property law. This is apparent from the reasoning of the High Court in the cases to which I refer below. For example in Glenn v Federal Commissioner of Land Tax (1915) 20 CLR 490; [1915] HCA 57 at 500/501, Isaacs J observed that "estate in possession", an element of the definition of "owner", is "a well-known technical expression of property law with a certain connotation". I see no room here for any asserted difference in statutory purpose to work a change to such a technical meaning.

The propositions established by the authorities

1. There are two limbs to the definition of "owner" in the HBA. The first limb (sub-par (a)) is directed to entitlement "to the land for an estate of freehold in possession". The second limb (sub-par (b)) is directed to entitlement to receive rents and profits of the land.
2. The authorities make clear that the second of these limbs is to be seen as an aspect of the first.

A person at law or in equity entitled to the land for an estate of freehold in possession

1. The term "owner" "prima facie connotes entire dominion" over the land (per Griffith CJ in Union Trustee Co of Australia Ltd v Federal Commissioner of Land Tax (1915) 20 CLR 526; [1915] HCA 68 at 530).
2. A person entitled to an estate of freehold in possession is one who has a "present right of beneficial enjoyment" (per Griffith CJ in Glenn at 498) or a "right of present enjoyment" (per Isaacs J in Glenn at 501). The party must have "the right to deal with the property as one's own" (Lygon Nominees Pty Ltd v Commissioner of State Revenue (2007) 23 VR 474; [2007] VSCA 140 at [68] (Redlich JA with whom Ashley JA and Bell AJA agreed)).
3. Such a right may involve actual physical possession of the land.
4. It may also involve being "in receipt of the rents and profits in respect of the land"; for example see Trust Company of Australia Ltd v Valuer-General (2008) 101 SASR 110; [2008] SASC 169 in which Bleby J (with whom Duggan and Anderson JJ agreed) cited with approval the following passage from the judgment of the primary judge: "There is substantial authority, therefore, for the proposition that the expression 'an estate in fee simple in possession' refers to an estate in fee simple where the owner of the estate is in physical possession as well as to an estate in fee simple where the owner is not in physical possession but is in receipt of the rents and profits in respect of the land. It is a corollary of that proposition that the receipt of rents and profits is evidence of ownership of the fee simple: Best on Evidence (12th ed, 1922) para 366 cited in Allen v Roughley (1955) 94 CLR 98; [1955] HCA 62 at 108 per Dixon CJ."
5. In order to be a person entitled to an estate of freehold in possession, a party must demonstrate that it has the ability to obtain an order for actual possession of the land or receipt of the rents and profits. In Karingal 2 Holdings Pty Ltd v Commissioner of State Revenue [2002] VSC 431, Nettle J found at [58]: "I take the law on the subject to be as stated by the High Court in Glenn v Federal Commissioner of Taxation, namely, that in order to say of the holder of an equitable estate or interest in land that he or she is to be treated as an owner pursuant to s 51, nothing less than the ability to obtain from a court of equity an order for actual possession of the land, or receipt of the rents and profits, will suffice."
6. Although his Honour was overturned on appeal, the High Court expressly agreed with Nettle J's reasoning in this respect: CPT Custodian Pty Ltd v Commissioner of State Revenue (2005) 224 CLR 98; [2005] HCA 53 at [28].

A person at law or in equity entitled to receive, or receives, or if the land were let to a tenant would be entitled to receive the rents and profits of the land, whether as beneficial owner, trustee, mortgagee in possession or otherwise

1. As I mentioned, the limb (b) requirements are an aspect of limb (a). The definition of a person entitled to land for an estate of freehold in possession includes a person entitled to receive rents and profits (see [89] above).
2. That entitlement must be "directly" to receive "all" of the rents and profits. Thus in Cochrane v Federal Commissioner of Land Tax (1916) 21 CLR 422; [1916] HCA 31 Griffiths CJ (with whom Barton, Gavan Duffy and Rich JJ agreed) said: "In my judgment the words 'entitled to receive the rents and profits' means entitled directly to receive all the rents and profits (not some of the rents and profits), that is, the reditus from the land; if the land is let, to receive payment of the rent; if it is occupied without lease, to receive compensation for such use and occupation. They do not, as contended by the Commissioner, include the case of a person who is merely entitled to receive a sum out of rents and profits received by another person."
3. A contractual or a personal right to receive an amount equal to the rents and profits from the person who is entitled to the rents and profits does not constitute the former an "owner".
4. For a person to be an owner, that person's entitlement to the rents and profits must arise "by virtue of an estate in freehold" (Max Sgammotta Architects v South Sydney City Council (NSW Land and Environment Court, Pearlman J, 30 October 1996, unrep)) and not by virtue of some other more distant contractual entitlement (Mant v Deputy Federal Commissioner of Land Tax for Queensland (1915) 20 CLR 564; [1915] HCA 46 at 569 (Isaacs, Gavan Duffy and Powers JJ)).

Limb (a) of the definition - is Multiplex entitled to the land for an estate of freehold in possession?

1. Mr Bambagiotti submitted that the definition of "owner" in the HBA, should be construed according to the common law meaning of "owner". Mr Bambagiotti referred to Jagot J's discussion (with which Siopis J agreed) of the common law meaning of "owner" in Ellison v Sandini Pty Ltd [2018] FCAFC 44 at [94] to [99].
2. However, Mr Bambagiotti did not explain how her Honour's undoubtedly correct analysis of that question bore on the definition of "owner" as it appears in the HBA. And, ultimately, Mr Bambagiotti submitted that "properly viewed" the Owner's Corporation's "arguments fit within" the "general principles" set out in the authorities to which I have referred at [91]-[100].
3. Finally, Mr Bambagiotti put the Owners Corporation's case as follows: "The Owners' case against [Multiplex] is simply that, by virtue of the DMA, [Multiplex] acquired substantially all of the powers, rights, entitlements, and characteristics so as to fall within the definition in sub-cl (a), so that, in fact, it was the equitable or beneficial owner of the Land. In effect, the DMA synthesised for [Multiplex] an equitable or beneficial estate in the Land. These rights, entitlements, powers, and characteristics are found in [16 clauses of the DMA]."
4. Otherwise than in respect of the call option given to Multiplex by cl 20.1 of the DMA, Mr Bambagiotti barely developed the argument that the "rights, entitlements, powers and characteristics" given to Multiplex by those 16 clauses bespoke Multiplex's "entitlement to the land for an estate of freehold in possession".
5. Having listed the 16 clauses, Mr Bambagiotti submitted, without elaboration, that: "Clearly, concepts such as 'a right to deal with the property as one's own', 'a right to have, to dispose of possession, and enjoyment' of the Land can be given by a contract (such as the DMA), and the rights, entitlements etc given by the DMA fit that description. The same with 'entire dominion', and alienability - all of which are conferred by the DMA."
6. Analysis of the 16 clauses to which Mr Bambagiotti referred to does not, in my opinion, compel any such conclusion.
7. I shall deal with each clause in turn.

Clause 1.1

1. By this clause SLH appointed Multiplex as its development manager and gave it power to do "all things that it would be legally entitled to do if Multiplex were the owner of the Property".
2. The clause is thus premised upon the assumption that Multiplex is not the owner of the Property.
3. The clause gives Multiplex the power to do or procure the doing of matters listed in subclauses 1.1(a) to (k), including "to procure the construction of improvements as contemplated by the Project" (subclause 1.1(e)).
4. However the clause is subject to the proviso in subclause 1.1(k) that although Multiplex could do anything "ancillary or incidental" to these matters it "must not do anything that adversely affects any rights specifically given to SLH" under the DMA, with specific reference being made to SLH's rights to the "Gross Proceeds" under cl 10, and thus under cl 8.3(c) (see [41] above).
5. Further the exercise by Multiplex of its rights under cl 1.1 is subject to Multiplex's obligation to have "regard to the interests of [SLH] in the Property or to any rights relating to the Property or to the sale of any part of the Property".
6. These provisions make clear that the wide powers given to Multiplex were only for the purpose of Multiplex exercising its responsibilities as development manager.

Clause 1.2 - power of attorney

1. By cl 1.2(a) SLH irrevocably appointed Multiplex as its attorney, but only to "sign any document contemplated under cl 1.1".
2. The power to do, or to procure the matters referred to in cl 1.1, and thus execute documents for that purpose, is limited by Multiplex's obligation to "have regard" to the interests of SLH (see [112] above).
3. Under cl 1.2(b) SLH irrevocably appointed Multiplex "to do all things that Multiplex would be legally entitled to do if it were the owner of the Property".
4. Again, the premise of this appointment was that Multiplex was not the owner of the property.
5. Clauses 1.2(b)(i) and (ii) set out the particular matters that Multiplex was authorised to do, namely to execute documents connected with the sale of the property and other documents necessary "to be entered into having regard to the interests of [SLH] in the Property or to any rights relating to the Property".
6. Thus, again, Multiplex's rights were subject to its obligation to "have regard" to those interests of SLH.

Clause 3 - functions and duties of Multiplex

1. By cl 3.1 Multiplex agreed to procure that the Project be carried out.
2. By cl 3.2 Multiplex was authorised and obliged to select and enter into a contract with an appropriately licensed builder.
3. Clauses 3.4 and 3.5 gave Multiplex power to supervise, monitor and to give orders and directions to the builder to procure the builder's work under the building contract and which were "consistent with Multiplex's obligations under this deed" (which included having regard to SLH's interests in the property).
4. While the effect of these clauses was, as Mr Bambagiotti submitted, that Multiplex had "the sole interaction with the builder", I see no suggestion that Multiplex was given rights as if it were the owner.

Clause 4.1 - positive obligations of SLH

1. By this clause SLH was obliged to execute all documents reasonably required by Multiplex in connection with the Project and to do all things reasonably necessary to assist Multiplex obtain necessary approvals and procure the granting of securities over the land.
2. That appears to be a natural corollary of SLH's appointment of Multiplex as its development manager.
3. I do not see how it bespeaks the conclusion that Multiplex was itself the owner.

Clause 4.2 - negative obligations of SLH

1. By this clause SLH agreed that it must not do or permit anything to be done which might derogate from Multiplex's interest "under this deed", or which might interfere with the Property or access to it.
2. Clause 4.2(c) also provided that SLH could not assign or sell the Property or dispose of any interest in it otherwise than with Multiplex's consent.
3. The obvious object of this provision is to preserve Multiplex's entitlement under the DMA to its Development Management Fee.
4. The clause certainly restricted SLH's ability to deal with the land. But I do not see how it supports the conclusion that Multiplex somehow gained an interest in the land as "owner".

Clause 6.1 - minimum return to SLH

1. By this clause Multiplex guaranteed that the Nominated Sale Proceeds Amount would not be less than the Guaranteed Minimum Return as consideration for the exclusive Development Rights.
2. Mr Bambagiotti submitted that this clause gave Multiplex "complete control of the project DA". I do not see the clause having this effect. It acknowledged that Multiplex had the "Development Rights". But that is what SLH was hiring Multiplex to do.
3. The effect of the clause was that Multiplex guaranteed a particular return to SLH.
4. This cannot touch on the question of ownership.

Clause 7.1 - sales contracts

1. By this clause SLH agreed that it would be a party to all "Sale Contracts". These were contracts for the sale of lots in the development entered into by SLH at Multiplex's direction.
2. Multiplex also agreed to be a party to Sale Contracts and to assume all responsibilities other than those relating to delivery of title and discharge of any encumbrances.
3. Clause 7.2 specified conditions that were to be included in the Sale Contracts.
4. Clause 7.2(b)(ii) required a condition in the Sale Contracts that SLH had entered a contract "at the direction of Multiplex".
5. Clause 7.2(b)(vi) provided another condition that the price be paid to Multiplex.
6. There does appear to be a tension between that provision and cl 9.1 of the DMA which, as I mentioned, provided that SLH was "entitled to all Sale Proceeds".
7. These provisions show that SLH gave Multiplex wide powers over the manner in which lots in the development would be sold. But the manner in which the proceeds of sale were to be dealt with was governed by other clauses in the DMA and provided that the fruits of the Project would be divided between Multiplex and SLH as I have set out at [39] to [41] above; and see [143] to [147] below.
8. At one point in his submissions, Mr Bambagiotti referred to the fact that Multiplex assumed an obligation to repair certain defects in the Sale Contracts, entered into many years after the DMA. That provision can cast no light on the question of ownership. There is nothing in the DMA that gave Multiplex any such right. Clause 7.2 did not require that any such provision be included in the Sale Contracts.

Clause 8 - Development Management Fee

1. Mr Bambagiotti did not refer to this clause in his recitation of the provisions of the DMA that he submitted bespoke Multiplex's status as an "owner" of the Property.
2. However, the clause is vital.
3. It sets out the consideration that Multiplex was to receive for providing the Development Management Services. That consideration was, as I have said, the Development Management Fee which was to be "equal to" the sum of all Sale Proceeds and the "other monies" referred to in cl 9.2 (including rents and profits) less the total of the Guaranteed Minimum Return plus 50 per cent of that part of the Gross Proceeds as exceeded a nominated threshold amount (which part of the Sale Proceeds was to be paid to SLH).
4. Thus, fundamentally, Multiplex's ultimate right under the DMA is to an amount equal to a proportion of the fruits of the Project.
5. But it was SLH that was entitled to the actual fruits of the Project because it was entitled to all Sale Proceeds under cl 9.1.

Clause 9.2 - other monies

1. By this clause SLH agreed to pay to Multiplex, as an additional component of its Development Management Fee, "an amount equivalent to all income or monies" received in connection with the Project, including "any rent, licence fee or other money paid by any person for use or occupation of any part of the Property".
2. Mr Bambagiotti submitted that this clause had the effect that Multiplex "receives 'other monies'" and that if SLH "gets any such money, it must account for it to [Multiplex]".
3. But that is not what the clause says.
4. The clause provided that SLH must pay to Multiplex, as part of the agreed Development Management Fee, an amount "equivalent to" the "income or monies" it received from the Property.
5. This did not give Multiplex an entitlement to the rents or profits of the land. It simply included, as an element of Multiplex's Development Management Fee, an amount calculated as being equivalent to those sums.

Clause 11 - Sale Proceeds Account

1. This clause required Multiplex to open a Sale Proceeds Account into which all monies received in respect of the Project were to be paid (cll 11.1 and 11.4).
2. This provision must be read subject to cl 9.1 which provided that SLH is entitled to sale proceeds.
3. Mr Bambagiotti submitted that this clause enabled Multiplex to "deal" with the Sale Proceeds Account.
4. But the only provision within cl 11 which conferred on Multiplex any power over the funds in the Sale Proceeds Account was cl 11.5. That clause entitled Multiplex to grant a charge over the Sale Proceeds Account in favour of any financier and to agree to restrict withdrawals from the Sale Proceeds Account in accordance with any requirements of the financier.
5. The clause did not give Multiplex any entitlement to the funds. Indeed the clause would not be necessary if Multiplex owned the funds.

Clause 13.1 - subdivision

1. This clause gave Multiplex the right to subdivide the Property as it thought fit (cl 13.1). SLH acknowledged in cl 13.3 that Multiplex may be required to carry out "Subdivision Works" described below.
2. The effect of this clause was to authorise Multiplex, as a part of its management of the development of the Property, to subdivide the Property into strata lots.
3. This is not surprising.
4. The whole object of the Project was to develop the Property in that way. This is the very work that SLH engaged Multiplex to do.
5. It does not point to the conclusion that Multiplex was to obtain any ownership in the Property.

Clause 14.1 - possession of the Property

1. SLH was obliged to obtain vacant possession of the Property and to grant Multiplex exclusive possession of it (cl 14.1).
2. By cl 14.3 Multiplex agreed to be "responsible for the care of the Property and the Project works at all times".
3. But Multiplex was only given the right to exclusive possession of the Property for the purpose of carrying out its duties as SLH's development manager.
4. There is no suggestion in the DMA that Multiplex was entitled to possession for any other reason.

Clauses 20.1 and 20.3 - the call option

1. It was this clause on which Mr Bambagiotti placed most reliance.
2. Clause 20.1(a) provided that Multiplex: "…may, at any time call for the Property, or such part of the Property as has not been transferred to purchasers under Sale Contracts…to be transferred to it free of: (i) any Security Interest…; and (ii) any other charge, encumbrance or affectation created after the date of this deed over which [SLH] has control".
3. Mr Bambagiotti submitted that because Multiplex had the call option it could obtain a vesting order in respect of the Property and should be regarded as the owner of the Property even if it had not exercised the call option.
4. In his written submissions in reply, Mr Bambagiotti went as far as to contend that Multiplex "could call for [a] transfer of legal title to itself at any time and without having to pay consideration" and that Multiplex "did not have to pay anything, there was no 'purchase price' for the call option".
5. This is not what the clause says.
6. It is plain from the wording in cl 20.1 that, were Multiplex to exercise the call option, it would have to pay the consideration specified in that clause: see [48] and [49] above.
7. In supplementary written submissions Mr Bambagiotti accepted that consideration was required but contended that "consideration is not a condition, and does not prevent the transfer taking place".
8. Again, that cannot be right.
9. Clause 20.1(c)(i) made clear that if, as was the case, SLH was not in default at the time the option was exercised, the consideration was to be paid "at the time the Property…is transferred".
10. Ultimately, Mr Bambagiotti put the matter this way: "As [Multiplex] has the authority (cl 1.1) and power of attorney (cl 1.2), and the title documents (cl 1.3) it can transfer the Land into its name with the exercise of the Call Option in cl 20.1 … Without the power to aid itself, [Multiplex] would be entitled to a vesting order upon exercise of the Call Option, hence [it] is the beneficial owner of the Property". (Emphasis added.)
11. These passages reveal the difficulty with Mr Bambagiotti's submission.
12. Unless and until Multiplex exercised the call option, its interest in the Property remained contingent. It could not call for a conveyance "or demand to exercise any of those rights to which [it was] contingently entitled" until it exercised the option: see Barba v Gas & Fuel Corporation of Victoria (1976) 136 CLR 120; [1976] HCA 60 at 138 (Gibbs J).
13. Ward JA put the matter this way in Australia Capital Financial Management Pty Ltd v Linfield Developments Pty Ltd; Guan v Linfield Developments Pty Ltd [2017] NSWCA 99 at [102]: "Farrands notes (The Law of Options at 40) that two concurrent equitable interests arise on the grant of an option: 'an immediate equitable interest…measured by the relief a court of equity will grant to the grantee to prevent the grantor from disposing of the property inconsistently with the option or acting inconsistently with conditions attaching to the option'…; and a contingent equitable interest 'measured by the relief a court of equity will decree if the option is exercised'…The reason that the latter is referred to as a contingent (or executory) equitable interest is that until exercise of the option the grantee has no right to call for a conveyance of the property (see Farrands, Law of Options at 46-7, citing Barba at [22]; see also PW Young, ELG Tyler and ML Smith, On Equity (2009, Thomson Reuters) at [11.200])."
14. If Multiplex exercised the option, Multiplex's contingent interest would be converted into an actual interest to which it could give effect by exercising its power under cl 20.1(d).
15. But unless and until Multiplex exercised that option it had no right to call for conveyance of the Property or exercise the rights referred to in cl 20.1(d).
16. Unless and until it exercised the call option Multiplex could not claim to be the beneficial owner of the Property.
17. Contrary to Mr Bambagiotti's submissions, Multiplex could not claim that it "is the beneficial owner of the property" merely because it would be entitled "upon exercise of the call option".
18. Had Multiplex exercised the call option and thereby affected the transfer of the Property to itself, the relationship between the parties would have been transformed. Clause 19.1(c) provided that the exercise of the call option would terminate the DMA.

Clause 21.1 - assignment and other dealings

1. Clause 21.1 was to the same effect as cl 4.2(c) in that it provided that SLH could not sell, charge or otherwise dispose of any interest in the Property, nor assign its interest in the DMA, without Multiplex's consent.
2. The object of that clause was no doubt to preserve Multiplex's entitlement to develop the Property and to earn the Development Management Fee.
3. Mr Bambagiotti contrasted cl 21.1 with cl 21.2 which provided that Multiplex could assign its interest in the DMA to a "Related Entity of Multiplex".
4. I do not see the point of that submission. The fact that Multiplex's rights of assignment of its rights under the DMA were greater than those of SLH does not bespeak ownership.

Clause 25 - compulsory acquisition

1. This clause provided that if the Property was "Compulsorily Acquired by any Authority" then SLH was taken to have assigned its entitlement to any monetary compensation in respect of such compulsory acquisition to Multiplex and that such compensation "should be deemed to be kept as Sale Proceeds for the purposes of this deed".
2. The clause did not give Multiplex any entitlement to itself receiving any such compensation.
3. The effect of the clause was that, were SLH to receive compensation for a compulsory acquisition, the money received would be deemed to be "Sale Proceeds" and thus deemed to be an amount to be taken into account to calculate Multiplex's Development Management Fee.
4. The plain object of the provision is to ensure that Multiplex received its Development Management Fee in the event the Property was compulsorily acquired and SLH received compensation.

Conclusion

1. I do not see any of these clauses, taken individually, or together, as compelling the conclusion that Multiplex was an "owner" within the meaning of the first limb of the definition of "owner" in the HBA.
2. SLH appointed Multiplex as its development manager of the Property. It gave Multiplex extensive powers over the Property so that it could discharge that responsibility. But it did not give Multiplex "entire dominion" over the land, nor a "present right of beneficial enjoyment" over the land. It was entitled to physical possession of the land; but only for the purpose of fulfilling its obligations as development manager.
3. Multiplex could not deal with the Property "as its own". It could have exercised the call option. If that had happened, it would of course have become an "owner". But unless it did so, it was not.
4. I see nothing in the DMA to compel the conclusion that Multiplex was an "owner" for the purposes of this limb of the definition.

Limb (b) of the definition - was Multiplex entitled to receive the rents and profits of the land?

1. The DMA did not give Multiplex any entitlement to the rents and profits of the land; let alone one arising "directly" from its "ownership" of the Property.
2. As I have discussed, the DMA gave Multiplex an entitlement to a Development Management Fee.
3. That fee was to be calculated, in part, by reference to "an amount equivalent to" any "rent, licence fee or other money paid by any person for use or occupation of any part of the property" (see [40] and [145] above).
4. Even if the DMA provided Multiplex with a contractual entitlement to the rents and profits, that would not be sufficient to enliven limb (b) of the definition of "owner".
5. That is because in order for a party to be an "owner" within the meaning of limb (b) that party must be "directly" entitled to receive such rents and profits; that is "by virtue of an estate in freehold" (see [99] and [100] above).
6. Mr Bambagiotti submitted that this reading of the DMA was to elevate form over substance.
7. I do not agree. It is simply what the DMA says.

Was SLH 22 an "owner" of the land within the meaning of the HBA?

1. Mr Bambagiotti submitted that SLH 22 was also an "owner" of the Property. SLH 22 was one of the parties to the DMA. Mr Bambagiotti contended that: 1. SLH held its interest in the Property on trust for each of the Trustees, including SLH 22; 2. each of those entities, as beneficiaries, had an equitable interest in the "trust property" being the Property itself and, later, SLH's interest in the strata scheme; 3. SLH 22 thus had "a beneficial interest in the land" to the extent SLH held its registered interest; and 4. accordingly, SLH 22 (and, no doubt, the other seven Trustees) was an "owner" of the Property for the purposes of the HBA.
2. I do not accept the submission. There was clearly some kind of commercial relationship between SLH and SLH 22 (and the other Trustees) at the time. But the evidence does not warrant the conclusion that that relationship was that of trustee and beneficiary.
3. There is no direct evidence that SLH held the Property on trust for SLH 22 (or anyone else).
4. Indeed, it is agreed that there was no deed of trust or other document at the time of execution of the DMA establishing any trust relationship between SLH and SLH 22.
5. There is no evidence of any oral declaration of trust.
6. It follows that the existence of any trust is to be inferred from the circumstances, and in particular from the terms of documents executed by SLH and SLH 22 at the time.

The mortgages given by SLH over the Property

1. SLH became proprietor of the Property by a transfer executed by Amcor Packaging (Australia) Pty Ltd dated 30 June 2004 for a stated consideration of $25.25 million.
2. On the same date SLH executed a mortgage in favour of Capital Finance Australia Ltd in which it was stated, under the heading "Trust", that there was "none known to the Mortgagee at the date of the Mortgage". The phrases "the mortgagor is trustee of the" and "trust established by deed dated" were struck through.
3. A similar statement was made in a further mortgage executed by SLH and Capital Finance a year later, on 22 June 2005.
4. In a mortgage SLH executed over the property on 21 August 2007, in favour of ANZ Fiduciary Services Pty Ltd, SLH stated at cl 4.1 of the mortgage document that SLH was the "legal and beneficial owner" of the Property. Later, at cl 5.1, SLH warranted it was the "sole legal owner" of the Property "subject to any trust…specified in a Transaction Document". My attention was not drawn to any such "Transaction Document".
5. Those documents point against the existence of a trust.

The DMA

1. Recital A of the DMA stated: "SLH holds the Property on behalf of the Trustees". (Emphasis added.)
2. Recital B the DMA provides: "The Contracting Party has requested Multiplex to provide, and Multiplex has agreed to provide, project management services to develop the Property in accordance with this deed".
3. As I have mentioned, the definition of "Contracting Party" refers to both SLH and the Trustees. The definition reads: "Contracting Party means SLH in its capacity as agent, nominee and trustee for each of Trustees and, where the context permits, each of the Trustees". (Emphasis added.)
4. Clause 22.1(j) of the DMA provides that each party represented and warranted that: "[I]n the case of SLH, it enters this deed as agent and otherwise for and on behalf of the Trustees". (Emphasis added.)
5. The statements in Recital A and cl 22.1(j) that SLH holds the Property "on behalf of" and "for and on behalf of" the Trustees (including SLH 22) are consistent with, but not sufficient to establish that, SLH holds the Property in trust for SLH 22.
6. The definition of "Contracting Party" certainly contemplates the possibility that SLH may be a trustee for the Trustees. But the wording is not sufficient, in my opinion, to compel the conclusion this is in fact so; especially in light of the express statements in Recital A and cl 22.1(j) of a lesser relationship ("on behalf of"). As Mr Neggo, who appeared for SLH 22 put it, the definition does not, itself, prove the correctness of its own premise.
7. I do not see these provisions as compelling the conclusion that a trust relationship existed.

The Heads of Agreement

1. SLH and SLH 22 (and the other Trustees) are parties to two other documents, which to relate to the DMA.
2. The first is a document entitled "Heads of Agreement", dated 29 April 2005, some two months before the DMA.
3. The Heads of Agreement recited that SLH was the registered proprietor of the Property. The recital made no reference to SLH holding the Property on trust for any of the "Trustees"; or at all.
4. Clause 1.4 of the Heads of Agreement referred to SLH's intention to enter into the DMA with Multiplex (which was not incorporated until 12 May 2005) and set out how Multiplex's fee for carrying out development management work would be calculated.
5. Included in that paragraph was a statement that SLH would retain income from property sales "beneficially". That statement, made in a document to which SLH 22 and the other Trustees is a party, points against the conclusion of a trust relationship between SLH and the Trustees.

The "Monument" transfers

1. By cl 1.1 of the Heads of Agreement, Multiplex Developments Aus Pty Ltd (of which Multiplex would become a subsidiary) agreed to procure a company called Oxford Square Investments Pty Ltd (described as registered proprietor of the "Monument Apartments" in Oxford Street, Sydney) would enter into "the Monument (Hurstville) Contracts"; as would "the Trusts".
2. The Heads of Agreement did not define the "Monument (Hurstville) Contracts".
3. However, by three transfers each dated 22 June 2005, Oxford Square Investments Pty Ltd transferred to SLH 22 three lots in Strata Plan 73908 for a total consideration of $2,559,000. Evidently these three lots were the "Monument Apartments". These transfers appear to be reflected by an entry in SLH 22's balance sheet for FY2005 of a non-current asset described as "Land and Buildings at Cost", of some $2,627,000.
4. Thus, in circumstances not otherwise explained in the evidence, SLH 22 acquired an interest in properties other than the Property the subject of the DMA.
5. This becomes relevant in light of the submission made by Mr Bambagiotti concerning the accounts of the River Trust, which I consider below at [239] to [249].

The Deed of Cross Indemnity

1. The second document is a Deed of Cross Indemnity, dated 15 July 2005, several weeks after the date of the DMA.
2. That document recited that: "In recognition that each Trustees [sic] interest in the DMA is of differing proportions, each Trustee has agreed to indemnify the other so that their respective liability from time to time is limited to their respective Share".
3. SLH 22's "Share" was said to be 10 per cent.
4. The total of the eight Trustees' "Shares" was 100 per cent.
5. Clause 2.1 of the Deed provided: "The Trustees acknowledge and agree that in addition to the Trustees [sic] Obligations [under the DMA], SLH has continuing Obligations pursuant to the DMA. The Trustees agree to each contribute to their respective Share for any costs and expenses incurred by SLH in complying with the Obligations or arising from the DMA."
6. That document suggests that there was, to use Mr Bambagiotti's words, "some kind of arrangement" between the parties to the Deed of Cross Indemnity.
7. The question is whether that "arrangement" was one of trustee and beneficiary. I do not see how the terms of the Deed of Cross Indemnity compel that conclusion.

The financial records of the River Trust

1. SLH 22 became trustee of the River Trust in April 2005.
2. Before SLH 22, the trustee of the River Trust was River 2 Pty Ltd. That company is now a 10 per cent shareholder in SLH. That percentage shareholding is the same percentage as SLH 22's "Share" of "Obligations" under the Deed of Cross Indemnity. The significance of those facts, if there is any, was not developed in submissions.
3. There was evidently another trust, known as the River 2 Trust. Any relationship between that trust and the River Trust is unexplained in the evidence.
4. The financial records of the River Trust for the financial years ended 30 June 2004 to 30 June 2012 were in evidence.
5. Those records show that the River Trust: 1. between FY2004 and FY2007 had a current liability (ranging from some $130,000 to some $780,000) described in its balance sheet as "Loans - Sydney Land Holdings Trust Partnership"; 2. in subsequent years had a current liability in much the same amounts (between some $745,000 to $955,000 described as "Loans - Unsecured"; 3. from FY2005 to FY2010, but not thereafter, had a current liability some $1.676 million described in the balance sheet as "Security Bond Deposit"; 4. from FY2005 to FY2012 had a current asset, described in its balance sheet as "receivables" which between FY2005 to FY2007 ranged from some $396,000 to some $595,000 and represented loans to River 2 Trust, the "Evans Discretionary Trust" and Graeme and Paulette Evans; and which thereafter ranged up to some $1.68 million and represented unidentified "Loans - Unsecured"; and 5. from FY2005 to FY2012 received income, described in its profit and loss account as "Profit From Partnership/Trust", of some $133,000 in FY2005, in relatively modest amounts between FY2005 and FY2012; save that in FY2011 it was $1.67 million;
6. Mr Bambagiotti submitted that I should infer that the sudden increase of income in FY2011 (to $1.67 million) demonstrated that SLH 22 had been paid, as trustee of the River Trust, some part of the profits from the Vantage project. Mr Bambagiotti pointed to the fact that the Occupation Certificate was issued in April 2009 and the strata plan registered in May 2009, and submitted it was likely that sales of units in the development would take place during FY2010 and FY2011.
7. There is no direct evidence of these matters. Acceptance of Mr Bambagiotti's submission would involve a good deal of speculation on my part.
8. SLH 22 also owned the three Monument Apartments. They may have been sold during FY2011. The "profit" recorded in the River Trusts' profit and loss account may derive from this source.
9. The accounts describe the income as representing "profit" from "Partnership/Trust". That "Partnership/Trust" might be the "Sydney Land Holdings Trust Partnership" to which the River Trust was evidently indebted during FY2004 to FY2007. But it seems unlikely that the "Sydney Lands Trust Partnership" was involved in the Vantage development, as that development did not commence until after the date of the DMA (22 June 2005) and thus did not commence until sometime during FY2006; up to two years after the River Trust became indebted to that entity (whatever it was).
10. There is no evidence as to the circumstance in which the $1.676 million Security Bond Deposit referred to in the accounts was created, nor as to any connection between its evident discharge in FY2011 and the receipt of "profit" of about the same amount that year. Mr Neggo submitted that it may be that the profit was used to discharge the bond. But the River Trust profit and loss statement for FY2011 shows that the profit was distributed that year to the beneficiaries of the River Trust (Mr and Mrs Evans and other entities).
11. Overall, I cannot reach any conclusion from these accounts as to whether SLH held the Vantage property in trust for SLH 22 and thus for the River Trust.

Conclusion as to existence of a trust

1. It does appear that there was some kind of arrangement between SLH and the various Trustees named in the DMA, including SLH 22.
2. However, based on the material before me, I cannot reach any conclusion as to what that relationship was. In particular, I cannot conclude that the relationship was that of trustee and beneficiary.

Is the Owners Corporation a "successor in title" to Multiplex for the purpose of s 18C of the HBA?

1. I have concluded that Multiplex was not an "owner" of the Property for the purposes of the HBA. It follows that Multiplex is not a "developer" of the Property for the purposes of the HBA.
2. Assuming however, that my conclusion is wrong, and that Multiplex was an "owner", and thus a "developer" of the Property, the question arises as to whether the Owners Corporation is "the immediate successor in title" to Multiplex.
3. In the HBA, the expression "successor in title" is used in both ss 18C and 18D.
4. Relevantly, s 18C refers to a person who is "the immediate successor in title" to a developer.
5. Section 18D refers to a person who is a "successor in title" to a person "entitled to the benefit of a statutory warranty under [the HBA]".
6. In Gardez Hammerschlag J considered the expression "successor in title" by reference to s 18D.
7. His Honour said: "[42] 'Successor in title' is not a term of art: Souglides v Tweedie [2013] Ch 373 at 376. It is protean. Its meaning in any given case will depend on the specific context in which it is used. … [50] In its general meaning, 'successor in title' connotes no more than a person who holds title after another. The Oxford Australian Law Dictionary definition is, unexceptionally: The party that comes later in time than another, as the holder of an estate or interest in property. … [52] The Act does not expressly state what title it has in mind. However, the mechanism for transmission of the benefit of the warranties and insurance, both where the owner contracts with the contractor and where the owner does not contract, is transmission of the owner's title to the successor. [53] Thus, determination of whether party B (Gardez) is the successor in title to party A (Railway) requires identification of the relevant title held by party A at the time of the warranties, and assessment of whether that title passed to party B."
8. If Multiplex was an "owner" of the Property, it was because of the contractual rights conferred upon it by the DMA.
9. I cannot see how the Owners Corporation could be seen as being a "successor in title", let alone an "immediate successor in title", to "ownership" so conferred.
10. Dr Bell and Mr Hutton submitted: "There is no suggestion that the Owners Corporation has taken some form of 'title' referable to the set of rights conferred on Multiplex by the DMA. It was not assigned Multiplex's rights under the DMA. Rather, it became absolute owner of the land (subject to mortgages and other encumbrances) by taking a transfer of title from SLH".
11. I accept that submission. Assuming that Multiplex is somehow within the definition of "owner" in the HBA, it did not pass on that interest to the Owners Corporation so as to make the Owners Corporation a "successor in title" for the purposes of s 18C.

Is the Owners Corporation a "successor in title" to SLH 22 for the purposes of s 18C of the HBA?

1. For the same reasons, my conclusion is that, assuming SLH 22 was somehow within the definition of "owner", the Owners Corporation is not its successor in title for the purposes of s 18C.
2. There is no evidence that SLH 22's beneficial 'ownership' interest passed to the Owners Corporation.

Was the DMA a contract to do residential building work?

1. "Residential building work" is defined in Sch 1, cl 2 of the HBA to mean, relevantly: "…any work involved in, or involved in co-ordinating or supervising any work involved in: (a) the construction of a dwelling…".
2. However the definition expressly excludes: "the supervision only of residential building work: … (iii) by any other person, if all the residential building work is being done or supervised by the holder of a contractor licence authorising its holder to contract to do that work".
3. The work actually carried out by Baseline under the D&C Contract was "residential building work" for the purposes of the HBA. The D&C Contract was a contract to perform residential building work and thus a contract into which the statutory warranties referred to in s 18B of the HBA were implied.
4. The question is whether the DMA should also be seen as a contract whereby Multiplex itself agreed to carry out building work.
5. Multiplex did not hold a licence under the HBA to carry out residential building work, and would have committed an offence had it done so: s 4(1)(a) of the HBA.
6. The effect of the "supervision only" exception to the general definition of residential building work is that, where a party's involvement is limited to supervising the construction work (rather than actually carrying out or coordinating it), that party's work will not constitute "residential building work". As Dr Bell and Mr Hutton submitted, this leaves it open for a party to procure or make arrangements with a licenced contractor to do residential building work.
7. By reference to the definition of residential building work, the question thus is whether the DMA was a contract by which Multiplex agreed to be: 1. "involved in" the construction (that is the "building process itself") of the Vantage building; or 2. "involved in" "coordinating" the construction work; or 3. involved in supervising construction work, other than merely supervising Baseline; Baseline being the holder of a contractor licence and itself a party which, by virtue of the D&C Contract, was doing and supervising the actual building process.
8. The question must be considered as at the date of the DMA (Owners Corporation Strata Plan 72535 v Brookfield [2012] NSWSC 712 at [105] (McDougall J)) and by reference to usual principles governing the construction of commercial contracts and the objective ascertainment of the intention of the parties.
9. Those principles were recently summarised by the High Court in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 as follows: "[46] The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose. [47] In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That enquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract. [48] Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning." (Citations omitted.) (French CJ, Nettle and Gordon JJ.)
10. Before me, debate focused primarily on the text of the DMA.
11. The overarching provision in the DMA is cl 1.1 pursuant to which SLH appointed Multiplex as its development manager and conferred upon it the power to do or procure to do a number of matters including, critically, "to procure the construction of improvements as contemplated by the Project".
12. The Statutory Warranties are implied in every contract "to do" residential building work.
13. But Multiplex was not engaged "to do" this work. It was engaged to procure that the work be done by an appropriately licensed builder (cl 3.2).
14. SLH and Multiplex agreed that Multiplex was not engaged "to do" the building work.
15. Thus cl 17.4 (to which I have referred at [44] above) provided: "Without affecting the warranties contained in cl 17.3 ('Home Building Act Warranties'), SLH and the Trusts acknowledge to Multiplex that this document complies with, and Multiplex has not contracted to do work in contravention of, Division 1 of Part 2 of the Home Building Act". (Emphasis added.)
16. This provision cannot be conclusive on the question; as the parties evidently acknowledged by the indemnity in cl 17.4(b) (see [45] above).
17. However, faced with this statement of the parties' actual intention it would require clear words in the DMA to compel the conclusion that their intention had been thwarted.
18. I see no such clear words in the DMA.
19. Mr Bambagiotti pointed to a number of provisions in the DMA which, taken alone, might point to the conclusion that, notwithstanding the provisions of the DMA to which I have referred, Multiplex was agreeing "to do" work involved in the construction of the Vantage development.
20. For example, by cl 2.1 Multiplex agreed "to undertake the Project and provide the Development Management Services".
21. But in cl 3.1 Multiplex agreed to "procure that the Project is carried out".
22. There is a tension between Multiplex's agreement in cl 2.1 to "undertake" the Project and its agreement in cl 3.1 to "procure" that the Project is carried out.
23. Some ambiguity thereby arises.
24. If a contract is ambiguous, the construction of the contract which results in the parties (or one of them) acting lawfully is to be preferred to a construction which results in the party or parties acting unlawfully: Global Network Services Pty Ltd v Legion Telecall Pty Ltd [2001] ACL Rep 110 NSW 55; [2001] NSWCA 279 at [102]; Mason P citing with approval K Lewison, The Interpretation of Contracts, (2nd ed, 1997, Sweet & Maxwell) at [6.09]; repeated in K Lewison & D Hughes, The Interpretation of Contracts in Australia, (2012, Lawbook Co) at [7.10].
25. Adopting that construction here, I would attribute to the parties the intention that Multiplex's agreement under cl 2.1 was to "undertake the Project" by procuring it be carried out.
26. Mr Bambagiotti also drew attention to cl 13.1 of the DMA which, as I have mentioned, stated that Multiplex "has the right to subdivide the Property as it thinks fit" and to "have carriage of the Subdivision Documents" (which included the relevant strata plan and the strata management statement).
27. Mr Bambagiotti also referred to cl 13.3 in which SLH "recognises that Multiplex may be required to carry out the Subdivision Works", that is the works required to be done before Hurstville Council would consent to registration of the Subdivision Documents, "as a condition of obtaining the Council's approval to the Subdivision Documents".
28. Mr Bambagiotti submitted that "that obviously includes physical work, and hence residential building work".
29. However cl 13 must be read in the light of the overarching provision in cl 1.1(g) which records, amongst other things, that, as development manager, Multiplex would do or procure the preparation and approval and registration "of any plan of strata subdivision, strata management statement or associate documentation relating to the Project".
30. Further cl 13.1 recites the parties' contemplation of the consequences of Multiplex having the "right to subdivide the Property" by providing that Multiplex: "…will have carriage of the Subdivision Documents involving: (a) preparation and development of any subdivision concept and staging plan; (b) engaging a surveyor; (c) arranging for preparation and progression of drafts of the Subdivision Documents to finality; and (d) arranging for the Subdivision Documents to be approved by the council and registered by the [NSW Land Registry Services]".
31. This provision suggests that, when the parties agreed in cl 13.3 that Multiplex might be required to carry out "Subdivision Works" they were not referring to "physical work" but rather to the work that cl 13.1 recites as being involved in Multiplex's "carriage of the Subdivision Documents".
32. To the extent that there is any ambiguity about this, the DMA should, in my opinion, be constructed to bring about a construction which does not result in Multiplex acting unlawfully.
33. Such a construction is, of course, in conformity with the parties' statement of their intention in cl 17.4.
34. Mr Bambagiotti referred to the "Sale Contracts" contemplated by cl 7 of the DMA (see [135] above).
35. Mr Bambagiotti submitted: "The pro-forma sale contract was a part of the DMA, and was, ultimately, at the heart of the profit making element of the Project".
36. Mr Bambagiotti referred to the special conditions which were annexed to sales contracts of the various lots entered into by SLH as "vendor", and Multiplex as "developer". The pro-forma contracts included a condition that Multiplex would repair defects.
37. Mr Bambagiotti submitted that that provision took Multiplex's "obligations under the DMA squarely within the ambit of Residential Building Work".
38. However, as I have mentioned at [142] above, the DMA only required that the terms set out in cl 7.2 be included in sales contracts. An obligation that Multiplex repair defects is not included amongst those terms. It was not an obligation "under the DMA".
39. Evidently for more abundant caution, Multiplex gave SLH the warranties referred to in cl 17.3 of the DMA (which are to the effect of the statutory warranties in Pt 2C of the HBA) (see [42] above).
40. The warranties in cl 17.3 are expressed to be in respect of "the parts of Multiplex's works comprising residential building work".
41. The expression "Multiplex's works" is not defined in the DMA. Mr Bambagiotti submitted that the expression "means the construction of the Building".
42. I do not agree. The expression must mean the "works" that Multiplex agreed to perform under the DMA. So far as concerns the construction of the building, those "works" were to procure the construction of the building by an appropriately licenced builder.

Conclusion

1. I am not persuaded the DMA is a contract to do residential building work.

Were the representations made by Multiplex to the PCA in trade or commerce?

1. On 27 April 2009 Multiplex completed an "Occupation Certificate Application" pursuant to the then s 109C(1)(c) of the EPA Act in which certified "that the works have been completed in accordance with the relevant Development Consent".
2. That representation is said to have been misleading or deceptive. I am not asked to decide whether this is so. I am asked to decide whether any representation was made "in trade or commerce".
3. The application was delivered to an "accredited certifier" within the meaning of the then s 4 of the EPA Act; that is a holder of a certificate of accreditation as an accredited certifier under the Building Professionals Act 2005 (NSW). The accredited certifier was City Plan Services.
4. Section 109D(1)(c) of the EPA Act provided that an occupation certificate may be issued by "a consent authority, the council or an accredited certifier".
5. Thus, as an accredited certifier, City Plan Services was in the same position, and exercised the same functions as the relevant council would have, had the application for an occupation certificate been made to it.
6. On 24 October 2006 City Plan Services sent Multiplex a "fee proposal" in relation to the certification services it offered to perform in relation to the Project.
7. In its fee proposal City Plan Services proposed remuneration as follows: "REMUNERATION Fees have been structured according to the scope of works and would be provided on the following basis; SERVICE A BCA Report $6,000.00

SERVICE B CONSTRUCTION CERTIFICATION Stage 2 Construction Certificate Application Phase $23,000.00 Stage 3 Principal Certifying Authority $27,000.00

GST fee $5,600.00

SUBTOTAL $61,600.00

SERVICE C STRATA CERTIFICATION (PER LOT) $150.00 GST fee $ 10% of service"

1. City Plan Services thus proposed a total remuneration of $61,600 of which $27,000 was for the work to be carried out as "Principal Certifying Authority".
2. On 29 March 2007 Multiplex wrote to City Plan Services accepting its fee proposal.
3. Conduct will only be "in trade or commerce" if it is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character: Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594; [1990] HCA 17 at 604; Houghton v Arms (2006) 225 CLR 553; [2006] HCA 59 at 565 [32]-[33]; Chapman v Luminis Pty Ltd (No 4) (2001) 123 FCR 62; [2001] FCA 1106 at [165] - [166].
4. Generally, representations made to a statutory authority in order to satisfy a statutory condition, or to obtain an exercise of statutory power, are not made in trade or commerce.
5. Thus in GlaxoSmithKline Australia Pty Ltd v Pharmacor Pty Ltd [2014] FCA 1202, Beach J said at [77]: "Generally, representations made to statutory authorities as required by legislation in order to satisfy a statutory condition or to 'procure' an exercise of statutory power are outside the scope of 'in trade or commerce'. They are not of themselves in the course of a trading or commercial relationship or bear a trading or commercial character. The relationship is rather 'a relationship between a regulator and a regulated industry or business' (Village Building Co Ltd v Canberra International Airport Pty Ltd (2004) 139 FCR 330 [[2004] FCAFC 240] at [51] per French, Sackville and Conti JJ; Glueck v Stang (2008) 76 IPR 75; [2008] FCA 148 at [32]-[33] per Lindgren J; Interpharma Pty Ltd v Commissioner of Patents (2008) 107 ALD 342; [2008] FCA 1283 at [14] per Sundberg J and Gold & Copper Resources Pty Ltd v Newcrest Operations Ltd [2013] NSWSC 281 at [109], [116]-[118] per Stevenson J)."
6. Mr Bambagiotti accepted that, ordinarily, dealings with a regulator are not in trade or commerce.
7. However he submitted that the dealings between Multiplex and City Plan Services should be seen as being in trade or commerce for two reasons.
8. First, City Plan Services was engaged by Multiplex on a private basis and was performing a commercial function for which it was being paid a fee.
9. Second, because the obtaining of an occupation certificate was a condition precedent to the sale of the units in the development and development itself was an activity carried out in trade or commerce, the function of issuing an occupation certificate was itself in trade or commerce.
10. I do not accept either of these submissions.

The private engagement point

1. It may be that City Plan Services was engaging in trade or commerce by providing the services for which it charged fees.
2. But it does not follow that Multiplex, in applying to City Plan Services for an occupation certificate, was itself engaging in trade or commerce.
3. As Brereton J (as his Honour then was) said in Street v Luna Park Sydney Pty Ltd (2009) 223 FLR 245; [2009] NSWSC 1 at [218]: "The fact that a fee was payable in respect of the development applications does not make the activity of lodging a DA a commercial one (any more than filing proceedings in a court is made commercial by the exaction of a filing fee)".
4. City Plan Services was fulfilling a statutory function as one of the entities authorised by s 109D(1)(c) of the EPA to issue an occupation certificate.
5. Multiplex's application for an occupation certificate was made to City Plan Services in that capacity.
6. The fact that City Plan Services charged a fee for issuing the certificate did not render Multiplex's conduct to be in "trade or commerce".

The condition precedent point

1. I do not consider that the fact that it was necessary that Multiplex obtain an occupation certificate in order to carry out its commercial activities under the DMA has the effect that the application for the certificate was itself in trade or commerce.
2. As von Doussa J said in Chapman v Luminis (albeit in an admittedly different circumstances) at [176]: "The proposition that because the impugned conduct occurred in the course of carrying out a contract entered into in the course of trade or commerce, it is necessarily conduct 'in trade or commerce' is inconsistent with the decision in Concrete Constructions."
3. The present case is analogous to Street v Luna Park.
4. In that case Metro Edgley sought development approval in relation to various structures at Luna Park. Brereton J said at [218]: "…the present case did not involve the approval of any commercial transaction or dealing: there was no commercial or trading transaction that required approval; what Metro Edgley sought was permission to develop land."
5. The case before me is not one where the application for the occupation certificate can be seen as the obtaining of consent as part of an overall sale transaction. For that reason I do not see this as being a case similar to that before the Full Court of the Federal Court in Dresna Pty Ltd v Misu Nominees Pty Ltd [2004] FCAFC 169. In any event the Full Court held no more than that the proposition was arguable for the purpose of surviving a summary dismissal application (see Street v Luna Park at [216]).
6. It may be, as Mr Bambagiotti submitted, that the obtaining of an occupation certificate was a condition precedent to the completion of the off-the-plan sales.
7. I do not think it follows that the application of the occupation certificate was itself conduct in trade or commerce.

Conclusion

1. For those reasons, my answer to each of the questions I have set out at [20] is "no".
2. I invite the parties to confer and agree on the consequential answers that must be given to the 20 questions the subject of the UCPR r 28.2 order.
3. I will hear the parties as to costs and as to what further orders should now be made in the proceedings.

Amendments 04 October 2018 - Typographical errors corrected to pars [58], [74], [98], [100], [273], [318] and [320] DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 October 2018