[2021] NSWLEC 129
Ross v Lane Cove Council (2014) 86 NSWLR 34
(2014) 199 LGERA 298
[2014] NSWCA 50
SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362
Source
Original judgment source is linked above.
Catchwords
[2021] NSWLEC 129
Ross v Lane Cove Council (2014) 86 NSWLR 34(2014) 199 LGERA 298[2014] NSWCA 50
SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362
Judgment (20 paragraphs)
[1]
Introduction
By Class 3 application filed on 29 September 2023, the Owners - Strata Plan No. 20548 (the applicant) seeks relief pursuant to s 179 of the Strata Schemes Development Act 2015 (NSW) (SSD Act) that the court make an order giving effect to a strata renewal plan dated 20 April 2023 (the strata renewal plan) for the collective sale of Strata Plan No 20548 known as 8-10 New McLean Street, Edgecliff, NSW (the proceedings). Mount Street 4 Pty Ltd ACN 648 961 479 as trustee for Mount Street 4 Unit Trust ABN 92 854 345 991 is the first respondent (the first respondent), and Mr Keith Anthony Bond is the second respondent (the second respondent) to the proceedings.
Subsections 180(1) and (2) of the SSD Act provide that a dissenting owner may file an objection to the application for an order to give effect to a strata renewal plan within 21 days after notice of the application is served on the person filing the objection. On 25 October 2023, Ms Julie Opie (the owner of lots 27, 45 and 71), and Mr Athol Ritchie and Mrs Joy Richie (the owners of lots 13 and 163) filed an objection to the application for an order to give effect to the strata renewal plan (the 25 October 2023 objection). Ms Opie and Mr and Mrs Ritchie are dissenting owners, but not parties to the proceedings. On 27 October 2023, Mr Bond, the owner of lot 157, the second respondent filed an objection pursuant to s 180(1), and a motion to be joined as a party to the proceedings in accordance with s 181(6) of the SSD Act.
On 19 August 2024, Taunton10 Pty Ltd (Taunton10) filed a notice of motion seeking to be joined as third respondent to the proceedings pursuant to s 181(6)(b) of the SSD Act. It was common ground that Taunton10 had not filed an objection to the application for an order to give effect to the strata renewal plan. On 29 August 2024, at the hearing of the motion seeking to be joined as third respondent to the proceedings, Taunton10 was granted leave to file an amended notice of motion.
The respondents to Taunton10's notice of motion were the applicant and the first respondent to the proceedings (the respondents to Taunton10's joinder motion). In its amended notice of motion, Taunton10 seeks the following orders:
1. Taunton10 Pty Ltd be joined to these proceedings as the Third Respondent pursuant to section 181(6)(b) of the Strata Schemes Development Act 2015 (NSW).
2. Alternatively, Taunton10 Pty Ltd be joined to these proceedings as the Third Respondent pursuant to r 6.24 of the Uniform Civil Procedure Rules 2005.
3. The Applicant is to pay Taunton10 Pty Ltd's costs of this notice of motion.
4. Such further orders as the Court considers appropriate.
At the hearing of Taunton10's notice of motion before me on 29 August 2024, the second respondent's appearance was mentioned by the applicant's counsel who informed the court that the second respondent neither consents to nor opposes the motion. At the conclusion of the hearing on 29 August 2024, I made orders that Taunton10, the applicant and the first respondent (being the respondents to Taunton10's motion) file submissions addressing the hierarchy or relationship between the powers in s 181(6)(b) of the SSD Act and r 6.24 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) in relation to joinder.
By way of background, the applicant had previously filed a notice of motion on 21 December 2023 seeking an order that 15 named parties who are owners of lots in Strata Plan No. 20548 who had not provided a support notice (being a statement that the owner supports the strata renewal plan) be joined, each as a separate party, to the proceedings for the purpose of a conciliation conference to be held on 14 February 2024. In The Owners - Strata Plan No. 20548 v Mount Street 4 Pty Ltd aft Mount Street 4 Unit Trust and Anor [1] (The Owners - Strata Plan No. 20548 v Mount Street 4) Robson J at [32]-[38] dismissed that application, not being satisfied that there was sufficient utility in making the orders sought.
By way of context, the background facts recorded in The Owners - Strata Plan No. 20548 v Mount Street 4 include that there were 165 lots in Strata Plan No 20548 of which 35 lots are owned by 25 "dissenting owners" (defined in s 154 of the SSD Act as "an owner of a lot in relation to which a support notice is not in effect … for the [strata renewal plan]"). Of the 35 lots owned by the 25 dissenting owners, 23 lots owned by 15 owners were identified by the applicant as "active dissenting owners", being those owners who had not filed a "support notice" (and therefore not part of the 75% of owners in support of the collective sale), and those owners who had not indicated their support for the collective sale subsequent to the commencement of the proceedings. It was these 15 active dissenting owners who the applicant sought to have made parties to the proceedings. On 7 November 2023, the court made orders for the joinder of Mr Bond (the owner of lot 157) as the second respondent, and the matter was listed for a conciliation conference on 14 February 2024 (subsequently changed on 16 January 2024 to 11 March 2024 at the request of the second respondent) (the conciliation conference). There was evidence before the court at the hearing of the motion on 1 February 2024 before Robson J that the following five active dissenting owners had indicated their position in relation to the motion for joinder for the purpose of the conciliation conference as follows:
1. Mr Ritchie and Mrs Ritchie, the owners of lots 13 and 163, neither consented to nor opposed the motion;
2. Ms Opie, the owner of lots 27, 45 and 71, neither consented to nor opposed the motion;
3. Eldajo Pty Ltd, the owner of lot 92, consented to the motion;
4. Taunton10, the owner of lots 102 and 124, consented to the motion; and
5. Mr Bani William McSpedden, the owner of lot 158, did not wish to be joined to the proceedings and preferred to be joined with other owners for the purpose of the conciliation conference.
The proceedings are listed for a five-day hearing between 18 and 22 November 2024.
[2]
Issues
The issues which arise on Taunton10's application for joinder to the proceedings filed on 19 August 2024 are as follows:
1. the hierarchy or relationship between the powers in s 181(6)(b) of the SSD Act and in r 6.24 of the UCPR in relation to joinder;
2. whether Taunton10 can or ought be joined to the proceedings pursuant to s 181(6)(b) of the SSD Act; and
3. whether Taunton10 can or ought be joined to the proceedings pursuant to r 6.24 of the UCPR.
[3]
Outcome
For the reasons that follow, I have decided that Taunton10 can and ought be joined as a party to the proceedings pursuant to s 181(6)(b) of the SSD Act, and will make an order to that effect.
[4]
Relevant legislation
Part 10 of the SSD Act makes provision in relation to the strata renewal process for freehold strata schemes. In Part 10, s 154 provides the following definitions of a collective sale and a dissenting owner:
collective sale of a strata scheme means a sale of the whole strata scheme
…
dissenting owner, in relation to a strata renewal plan, means an owner of a lot in relation to which a support notice is not in effect under this Part for the plan.
In Division 6 of Part 10, s 178 of the SSD Act provides as follows in relation to a decision to apply to the court for an order to give effect to a strata renewal plan for a strata scheme:
178 Decision to apply for order
(1) If the required level of support for a strata renewal plan for a strata scheme is obtained -
(a) the secretary of the owners corporation, or a member of the strata renewal committee, must convene a general meeting of the owners corporation for the purpose of deciding whether to apply to the court for an order to give effect to the plan, and
(b) the owners corporation may, by resolution, decide to apply to the court for the order.
(2) To remove doubt, an application for an order may be made by the owners corporation even if an owner of a lot in the strata scheme at the time the application is made is not an owner who gave a support notice for the strata renewal plan.
Note -
Under section 176 (5), a subsequent owner of a lot may be taken to have given a support notice under this Part.
(3) However, the owners corporation must not apply for an order unless it is satisfied that the strata renewal plan complies with section 170.
(4) The secretary of the owners corporation must, within 14 days after a decision is made to apply for an order, give written notice of the decision to each tenant of a lot in the strata scheme whose name has been notified to the owners corporation as a tenant of the lot in accordance with the Strata Schemes Management Act 2015.
Section 179(2) provides as follows in relation to the service of notice of an application to the court to give effect to a strata renewal plan for a strata scheme:
179 Application for order
…
(2) Notice of the application must be served, in accordance with rules of court, on -
(a) each owner of a lot in the strata scheme, and
(b) each registered mortgagee or covenant chargee of a dissenting owner's lot, and
(c) if the strata renewal plan is for a collective sale of a strata scheme - the proposed purchaser (if known), and
(d) if the strata renewal plan is for a redevelopment of a strata scheme - the local council and the proposed developer (if known), and
(e) any other person directed by the court.
Section 180 provides as follows in relation to the persons who may file an objection to the application for an order to give effect to the strata renewal plan:
180 Objection to application
(1) Any of the following persons may file an objection to the application for an order to give effect to the strata renewal plan -
(a) a dissenting owner,
(b) a person on whom notice of the application must be served under section 179 (2) (b)-(e).
(2) The objection must be filed in the court within 21 days after notice of the application is served on the person filing the objection.
(3) A person who files an objection need not be a party in proceedings before the court relating to the strata renewal plan.
Section 181(6) relevantly provides in relation to the joinder of persons to proceedings before the court for an order to give effect to a strata renewal plan:
181 Hearing of application
…
(6) Any of the following persons may be joined as a party to the proceedings -
(a) a person who has filed an objection to the application and applies to be a party to the proceedings,
(b) a person directed by the court to be joined.
Section 182 provides in relation to the decision of the court to make an order giving effect to the strata renewal plan:
182 Decision of court
(1) The court must make an order giving effect to the strata renewal plan if satisfied of the following matters -
(a) the relationship, if any, between the owners of lots and the purchaser or a developer has not prevented the plan being prepared in good faith,
(b) the steps taken in preparing the plan and obtaining the required level of support were carried out in accordance with this Act,
(c) all notices required to be served under sections 179 and 181 have been served,
(d) if the plan is for a collective sale - the proposed distribution of the proceeds of sale apportioned to each lot is not less than the compensation value of the lot and the terms of the settlement under the plan are just and equitable in all the circumstances,
(e) if the plan is for a redevelopment - the amount to be paid to a dissenting owner is not less than whichever of the following is greater -
(i) the compensation value of the owner's lot,
(ii) an amount equal to the total consideration that would accrue to the dissenting owner under the plan in relation to the redevelopment and the owner's lot if that owner had given a support notice for the plan,
(f) if the plan is for a redevelopment - the terms of the settlement under the plan, as those terms apply to any dissenting owner, are just and equitable in all the circumstances,
(g) any other matter prescribed by the regulations.
(2) The court may, on its own initiative, vary the strata renewal plan and make an order giving effect to the varied plan if satisfied of the matters referred to in subsection (1).
(3) However, the court cannot vary a strata renewal plan under subsection (2) unless -
(a) the variation is of a minor nature that does not affect the plan in any substantial way, and
(b) written agreement to the variation has been given by the owner of each lot in relation to which a support notice for the plan has been given.
(4) The court must not make an order giving effect to the strata renewal plan if the court is not satisfied about the matters referred to in subsection (1).
(4A) The court may be satisfied of the matters referred to in subsection (1)(b) and (c) despite a defect or irregularity if the court is satisfied that the defect or irregularity has not caused and is not likely to cause substantial injustice.
(4B) In considering an objection to the application for the order, the court must consider whether the person who filed the objection did not file the objection in good faith, including because of a conflict of interest.
(5) The court must give written reasons for its decision to make, or not to make, an order.
(6) This section applies subject to section 181 (5).
The process for a collective sale of a strata scheme provided for in the SSD Act was helpfully summarised by Pain J in Application by the Owners - Strata Plan No 61299 [2] at [16], and adopted by Robson J in The Owners - Strata Plan No. 20548 v Mount Street 4 at [11], in terms which I generally adopt as follows:
1. Step 1: a strata renewal proposal is prepared and submitted to the committee of an owners' corporation (s 156 of the SSD Act; reg 30 of the Schemes Development Regulation 2016 (NSW) (Strata Regulation)).
2. Step 2: the strata committee must consider the proposal within 30 days (s 157 of the SSD Act).
3. Step 3: if the strata committee is supportive of the proposal, the strata committee must convene a general meeting of the owners within 30 days (s 158 of the SSD Act) complying with subs (4) (14 days' notice of the meeting) and send minutes to lot owners within 14 days after the meeting (s 157(5)) which must include a complete copy of the strata renewal proposal and detailed reasons for the decision (s 157(4)).
4. Step 4: if the general meeting of the owners is supportive of the proposal, a strata renewal committee (SRC) must be formed (s 160 of the SSD Act). Written notice of this decision must be given to all lot owners within 14 days of the establishment of the SRC (s 162 of the SSD Act; reg 31 of the Strata Regulation).
5. Step 5: the SRC prepares a strata renewal plan (s 164(1) of the SSD Act). The requirements for the content of the strata renewal plan are prescriptive and involve the preparation of valuations on two bases - the individual lots within the strata scheme and the whole building and its site (ss 170-171 of the SSD Act; reg 33 of the Strata Regulation).
6. Step 6: the strata renewal plan must be considered by a general meeting of the owners, notice of which must comply with the SSD Act (s 172(2) and Sch 7, cl 3). The owners' corporation can by special resolution decide to give the strata renewal plan to the owners for their consideration (s 172(5)). This must be done within 14 days of the decision being made (s 173).
7. Step 7: at least 75% of non-utility lot owners must support the strata renewal plan (s 154 of the SSD Act and definition of "required level of support"). Notice must be given to all non-utility lot owners and the Registrar-General of the owners' corporation secretary's receipt of the required level of support within 14 days of such receipt (s 176(2)).
8. Step 8: if support notices (s 174(1) of the SSD Act) are received from at least 75% of the owners of non-utility lots (s 154 and definition of "required level of support"), the owners' corporation at a general meeting of the owners may resolve to apply to the court to have the strata renewal plan made (s 178(1)). Section 179 (also reg 35 of the Strata Regulation) outlines the documents that the application to the court for such an order must comprise. The SSD Act prescribes who must be served with a copy of the application to the court, including all owners (ss 178(4), 179(2)).
9. Step 9: the court considers the strata renewal plan and may make orders giving effect to the strata renewal plan if satisfied of certain matters which ultimately leads to the termination of the strata scheme (ss 182-183 of the SSD Act and regs 36-37 of the Strata Regulation). The orders bind the owners, any purchaser of the scheme, and the dissenting owners (s 187).
Section 188 of the SSD Act provides in relation to the costs of proceedings for an application for an order to give effect to a strata renewal plan incurred by a dissenting owner as follows:
188 Costs of proceedings
(1) Unless the court otherwise orders -
(a) the owners corporation must pay the reasonable costs of proceedings for an application for an order to give effect to a strata renewal plan incurred by a dissenting owner, and
(b) the owners corporation must not levy a contribution for a part of the costs of the proceedings on a dissenting owner.
(2) If the court is satisfied a dissenting owner has a conflict of interest that makes it inappropriate, in the court's opinion, for the owners corporation to pay the owner's costs, the court must make an order requiring the owner to pay -
(a) the owner's costs, and
(b) any contribution for a part of the costs of the proceedings levied on the owner.
(3) The court may make a costs order against a dissenting owner if the court considers it appropriate to do so, including if the court considers the owner has not acted in good faith in failing to give, or withdrawing, a support notice.
(4) The court may order that costs be assessed on the ordinary basis or an indemnity basis.
(5) The regulations may prescribe other matters relating to the costs of proceedings for an application for an order to give effect to a strata renewal plan.
Rule 6.24 of the UCPR provides in relation to the joinder of a party whose joinder as a party is necessary to the determination of all matters in dispute in any proceedings:
6.24 Court may join party if joinder proper or necessary
(1) If the court considers that a person ought to have been joined as a party, or is a person whose joinder as a party is necessary to the determination of all matters in dispute in any proceedings, the court may order that the person be joined as a party.
(2) Without limiting subrule (1), in proceedings for the possession of land, the court may order that a person (not being a party to the proceedings) who is in possession of the whole or any part of the land (whether in person or by a tenant) be added as a defendant.
Section 56 of the Civil Procedure Act 2005 (NSW) (CPA) provides relevantly in relation to the overriding purpose of the Act:
56 Overriding purpose
(1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.
(2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule.
(3) A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court.
[5]
Evidence
In support of its motion to be joined as third respondent, Taunton10 read affidavits of Mr Eduard Litver, sole director of Taunton10, dated 19 August 2024, and Mr Neil Gregory Palmer, solicitor in the employ of the solicitor on the record for Taunton10, dated 27 August 2024.
Mr Litver deposed that Taunton10 is the "registered proprietor of Unit 508 and Car Space 102 at 8-10 New McLean Street, Edgecliff, being Lots 102 and 124, respectively in Strata Plan No 20548", and annexed to his affidavit the title searches for those lots.
Mr Litver deposed that on or about 15 November 2023, he received a letter from Dentons (the solicitor for the applicant) asking whether Taunton10 wished to be joined to the proceedings for the purpose of participating in a conciliation conference, and that if there was not a response by 21 November, it would include Taunton10 in the applicant's own joinder application. Mr Litver deposed that on 8 January 2024, Taunton10's solicitor received by way of service the applicant's joinder application for the purpose of participating in a conciliation conference.
Mr Litver says that on 15 January 2024, he caused Taunton10's solicitor to write to the applicant's solicitor advising that Taunton10 consented to be joined as a party "for the purpose of participating in the conciliation conference". On 19 January 2024, Taunton10's solicitor received an email from the applicant's solicitor advising that the applicant's joinder application was listed on 1 February 2024. On 8 February 2024, Taunton10 was notified that on 2 February 2024, Robson J had not made an order that Taunton10 be joined to the proceedings for the purposes of the conciliation conference.
Mr Palmer deposed that if joined to the proceedings, Taunton10:
1. intends to rely on an annexed statement of facts and contentions (which contains two contentions);
2. does not intend to file any expert evidence; and
3. does not propose vacating the hearing dates.
The two contentions in the draft statement of facts and contentions annexed to Mr Palmer's affidavit were that:
1. the "terms of the strata renewal plan provide that the First Respondent may unilaterally rescind the contracts for sale with the lots owners by written notice given prior to 5pm on 6 July 2025". This means that "if the Court makes an order giving effect to the strata renewal plan for the collective sale, the First Respondent may nevertheless rescind and prevent the sale from proceeding"; and
2. in relation to jurisdiction, that "[t]his issue concerning the First Respondent's discretion to rescind the contracts for sale cannot be remedied by the Court in reliance on s 182(3) of the SSD Act because a variation that would carve out this component of the strata renewal plan would not be "of a minor nature"".
The applicant tendered the objection of Ms Opie (the owner of lots 27, 45 and 71), and Mr Ritchie and Mrs Richie (the owners of lots 13 and 163) filed on 25 October 2023 to the strata renewal scheme application. Ms Opie and Mr and Mrs Ritchie are dissenting owners within the meaning of s 154 of the SSD Act (but not parties to the proceedings). The objection filed on 25 October 2023 sets out the following three grounds of objection:
1. the proposed sale is not a "collective sale" within the meaning of the SSD Act, is "not a committed sale", and amounts to "little more than an option";
2. the strata renewal plan fails to state with certainty what the new unit entitlements are; and
3. the terms of settlement under the strata renewal plan are not "just and equitable" within the meaning of s 182(1)(d) of the SSD Act.
[6]
(1) The hierarchy or relationship between s 181(6)(b) of the SSD Act and r 6.24 of the UCPR
At the hearing of the motion before me on 29 August 2024, I raised the question of the hierarchy or relationship between s 181(6)(b) of the SSD Act and r 6.24 of the UCPR.
[7]
Taunton10's submissions
Taunton10 submitted that it is not uncommon for the court to be confronted with more than one power "by which it may avail the same outcome". Section 181(6) of the SSD Act and r 6.24 of the UCPR provide one such example in relation to an application for joinder. Another example is provided by r 6.24 and s 8.15(2) of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act), each of which provides a discretionary power pursuant to which the court may join a party to proceedings brought under Division 8.3 of the EPA Act. Whilst the UCPR is subordinate legislation, there is no legislative instruction that provides for one of power for joinder to prevail.
Taunton10 submitted that the approach of the court varies when it is confronted with an application for joinder under more than one available power. In the context of s 8.15(2) of the EPA Act, in Barr Property and Planning Pty Ltd v Cessnock City Council (Barr Property), [3] Pepper J said at [49]:
It is difficult to conceive of a situation where joinder under s 8.15(2) of the EPAA would not also result in joinder under r 6.24(1) of the UCPR, given the broader reach of the latter provision. Accordingly, it is convenient to deal with joinder under s 8.15(2) of the EPAA first.
Taunton10 submitted that the same approach was adopted by Pain J in Bilotta v Inner West Council [4] at [56], and that in appeals under Div 8.3 of the EPA Act, the test in s 8.15(2) is often addressed first as a "matter of convenience", and not as a matter of necessity or apparent legislative hierarchy. Taunton10 referred to the reasons of Molesworth AJ in The Owners - Strata Plan 6666 v Kahu Holdings Pty Ltd (Kahu Holdings) [5] at [22] in relation to the power of joinder in s 181(6) of the SSD Act to join a party:
The Registrar's advice was perfectly correct and that power to join a party pursuant to the UCPRs remains available, however as the Court considers that s 181(6)(b) of the Development Act provides ample power to join, in the circumstances of this case, it is most probably preferable to make all related orders, with respect to an application in relation to the Strata Renewal Plan, under the same legislative scheme, that is, the Development Act.
Taunton10 submitted that "the linking premise" between the above cases was an acknowledgement that the power to join under the UCPR remains available, but that the court approaches the task by first asking what the more "convenient" or "preferable" approach is in the circumstances.
[8]
Respondents' submissions
The respondents to Taunton10's joinder motion submitted that s 181(6) of the SSD Act is the more specific provision of the two joinder powers, with the "consequent effect" that it would ordinarily prevail to the extent of any inconsistency. Section 181 was made later in time, and "an argument may be made that there is an implied amendment (or even repeal) of r 6.24 of the UCPR in the circumstances where it applies". Further, the "location" of s 181 in the SSD Act would ensure that it prevails over a provision of the UCPR which is subordinate legislation. However, the respondents to the motion submitted, none of these arguments needs to be resolved here as the provisions can be read together harmoniously by reference to s 180(3) which provides that a person who files an objection need not be a party in proceedings before the court relating to the strata renewal plan.
Further, the respondents to the joinder motion submitted that if the court concludes that the power to join persons to proceedings under s 181(6) of the SSD Act is "essentially at large", the discretion to join Taunton10 must be exercised having regard to s 56 of the CPA.
[9]
Conclusion in relation to the hierarchy or relationship between s 181(6) of the SSD Act and r 6.24 of the UCPR
I find, as submitted by the respondents to Taunton10's joinder motion, that s 181(6) of the SSD Act is the more specific of the two joinder powers, with the effect that it would ordinarily prevail to the extent of any inconsistency with r 6.24 of the UCPR. However, I do not find there to be any inconsistency between the two provisions. I also find, in any event, as submitted by the respondents, that the provisions can be read together harmoniously by reference to s 180(3) of the SSD Act which provides that a person who files an objection need not be a party in proceedings before the court relating to the strata renewal plan.
In other words, it arises here first to consider whether the court would make an order pursuant to s 181(6) directing that Taunton10 be joined as a party to proceedings (and secondly, if necessary, whether the court would make such an order pursuant to r 6.24 of the UCPR). However, adopting what Pepper J said in Barr Property at [49] (in relation to a different statutory provision concerning joinder), it is difficult to conceive of a situation where joinder under s 181(6) of the SSD Act would not also result in joinder under r 6.24(1) of the UCPR given the broader reach of the latter provision. Accordingly, it is convenient to deal with joinder under s 181(6) first.
[10]
(2) Whether Taunton10 can (or ought) be joined to the proceedings pursuant to s 181(6)(b) of the SSD Act
Taunton10, the applicant and the first respondent (the respondents to the joinder motion) raised a question in relation to the proper construction of s 181(6) of the SSD Act.
[11]
Taunton10's submissions in relation to the proper construction of s 181(6)
Uncontroversially, Taunton10 submitted that the starting point in statutory interpretation is the text itself. [6] The persons identified in s 181(6)(a) and (b) ((a) a person who has filed an objection to the application and applies to be a party to the proceedings, (b) a person directed by the court to the joined) are alternatives. Such construction was submitted to be consistent with the reasons of Molesworth AJ in Kahu Holdings where his Honour at [14] said in relation to s 179(2) of the SSD Act concerning service of notice of an application for an order to give effect to the strata renewal plan, and the question of joinder:
14. For the purposes of this judgment, I need not consider the position of the local council, identified as being entitled to notice of the Strata Renewal Plan under s 179(2)(d), or the "any other person" that may, by direction of the Court, receive notice pursuant to s 179(2)(e), as potential parties in Strata Renewal Plan application proceedings. Neither category of such persons has an application before me to consider, however I see no reason why the Court would not see fit joining such persons to the proceedings if they were to demonstrate, to the Court's satisfaction, that they have a material interest.
Mr Koikas for Taunton10 submitted that had Parliament's intention been for the conditions in both paragraph (a) and paragraph (b) of s 181(6) to be met before a person could be joined as a party, then a conjunction such as "and" or "both" would have been used. In the absence of any such conjunction, paragraphs (a) and (b) are to be read as two alternative ways for joinder. Further, Mr Koikas submitted, the word "or" would be implied after the word "proceedings" in s 181(6)(a). That is because paragraphs (a) and (b) of subsection (6) are separated by a comma, rather than a conjunction such as "and" or "both". This construction leaves the court with "a wide ambit" to decide who to join to proceedings. Although the starting point in statutory interpretation is the text itself, it is also necessary to have regard to the context of the provision in the instrument as a whole, including the general purpose and policy of the provision. [7]
Taunton10 also referred to s 179(2) of the SSD Act, and submitted that the structure of s 179(2) differs from that of s 181(6). Notably, the individual items in paragraphs (a) to (e) of s 179(2) are separated by the word "and", leaving "no doubt" that notice of the application must be served on each of those persons for the requirement in the chapeau to have been satisfied. The absence of the word "and" separating paragraphs (a) and (b) in s 181(6) means that only one criterion needs to be met to qualify in order to be entitled to be joined "per the chapeau in s 181(6)".
In relation to context, Taunton10 submitted that the consequence of the court giving effect to a strata renewal plan will invariably interfere with a person's proprietary rights. Such significant imposition is met with a "proportionately significant power" in s 181(6)(b) for the court to join any person it so directs so that they may have a say in the outcome on the proceedings. This "wide net cast" by paragraph (b) empowers the court to join a person who should be a party to the proceedings, but who does not fit the class of persons to which paragraph (a) relates (namely, a person who has filed an objection to the application and applies to be a party to the proceedings).
If the court were to adopt a construction of s 181(6) by introducing the word "and" between paragraphs (a) and (b), this would confine joinder to only those dissenting owners who had filed an objection under s 180. It could not have been Parliament's intention to prevent all other dissenting owners from being joined, no matter the significance of their interest in the proceedings. This is particularly so in circumstances where there exists only a 21 day opening for an objection to be filed after notice of the application for an order under s 178 is served on the person filing the objection: s 180(2). The short 21 day period, Taunton10 submitted, weighs against a construction of s 181(6) to the effect that only those who have filed an objection to the application for an order under s 178 are entitled to be joined. It could not be said that acting with expedition is a critical ingredient to an entitlement to be joined "because there is no similar temporal constraint in s 181(6) of the SSD Act". An application for joinder can be made at any time (whether such application will be allowed being a matter of discretion).
In oral submissions, Mr Koikas referred to Ross v Lane Cove Council [8] (Ross v Lane Cove), where Leeming JA (Meagher JA and Tobias AJA agreeing) at [57]-[58] said as follows in relation to the joinder of parties directly affected by an order:
57. Contrary to Council's submission that "the line of authority from the Super League case must be read in the context of the overriding purpose set out in the Civil Procedure Act", nothing in ss 56-59 of the Civil Procedure Act undermines this principle, at least in its application to the present case. The joinder of a party directly affected by an order is not, at least not ordinarily, a matter of discretion: it is a matter of obligation upon the party seeking the order. That is why the High Court referred to the position of the non-party Walker Corporation in John Alexander's Clubs at [153] as depending on "matters of right affecting non-parties which rest on general law principles of natural justice".
58. For that proposition, the High Court cited Victoria v Sutton [1998] HCA 56; 195 CLR 291 at [77], where McHugh J said:
"The rules of natural justice require that, before a court makes an order that may affect the rights or interests of a person, that person should be given an opportunity to contest the making of that order. Because that is so, it is the invariable practice of the courts to require such a person to be joined as a party if there is an arguable possibility that he or she may be affected by the making of the order."
Mr Koikas submitted that there is "more than an arguable possibility that Taunton10 will be affected by the making of orders in this proceeding because its proprietary interests could potentially be extinguished". Mr Koikas submitted that the 25 October 2023 objection "does allege that the terms of the strata renewal plan are not just and equitable in the circumstances", and that "[w]hat we seek to address can very well be different to what is being addressed in [that objection]". Further, the draft statement of facts and contentions upon which Taunton10 wishes to rely goes "beyond just the argument that the provisions in the strata renewal plan are not just and equitable". For example, contention two raises the court's jurisdiction to deal with a variation, and the question as to whether such a variation would be minor in nature. Further, the court would not have a proper contradictor able to make submissions in relation to the matters raised in the 25 October 2023 objection and in the draft statement of facts and contentions upon which Taunton10 seeks to rely. Accordingly, Taunton10 submitted, the court would accept that the power to join a person pursuant to s 181(6)(b) extends to any person, not just a person who fits the description in s 181(6)(a).
[12]
Respondents' submissions in relation to the proper construction of s 181(6)
The respondents to Taunton10's motion for joinder submitted that it appeared to be common ground that if paragraphs (a) and (b) of s 181(6) are read conjunctively, Taunton10's application for joinder under s 181(6) must fail as Taunton10 did not file an objection under s 180 within the prescribed time of 21 days. Accordingly, the respondents submitted, Taunton10 pressed for paragraphs (a) and (b) to be read disjunctively to overcome its non-compliance with s 186(1)(a).
The better view was that paragraphs (a) and (b) of s 181(6) are to be read cumulatively. Parliament clearly considered who the possible interested parties in strata renewal proceedings might be by nominating them in s 179(2), and by prescribing who might then make an objection. This is not all persons otherwise given notice of the commencement of proceedings under s 179(2). An owner of a lot must be given notice of the proceedings pursuant to s 179(2)(a), but only a dissenting owner may object, pursuant to s 180(1)(a). Read in context and grammatically, s 181(6) establishes criteria by which joinder under s 181(6) of the SSD Act is to be carried out: first, by objecting and then applying for joinder, and secondly, by the court ordering joinder. If the effect of s 181(6) were that the court "may simply join any person it wishes, it would be expected to say so clearly and there would not be any need for reference to the objection process at all".
It was no answer to say, the respondents submitted, that it cannot have been Parliament's intention to read the criteria in s 180(1) cumulatively as this would prevent all dissenting owners who do not lodge objections from being joined to proceedings. All lot owners are required to be notified of the various steps taken under Part 10 of the SSD Act, both during the strata renewal plan preparation process and at the commencement of proceedings seeking orders in relation to a plan. This ensures ample notice for lot owners to take advice and be aware of their rights. To the extent that Molesworth AJ made obiter comments in Kahu Holdings that would suggest a contrary conclusion regarding the construction of s 181(6), those comments were clearly wrong.
In oral submissions, Mr Astill for the first respondent submitted that it would not be just, quick or cheap to join Taunton10 to the proceedings because the issues sought to be raised by Taunton10 were already before the court by way of other objections filed in accordance with s 180(1) of the SSD Act, such as the 25 October 2023 objection filed by Ms Opie and Mr and Mrs Ritchie which raises the issue of whether the terms of settlement under the strata renewal plan are just and equitable in the circumstances. Mr Astill submitted that the objections of the second respondent Mr Bond do not go to the 25 October 2023 objection, and instead go to "his particular unit". Mr Astill submitted that the only express reference to objections is in s 182(4B) of the SSD Act which provides that in considering an objection to the application for the order, the court must consider whether the person who filed the objection did not file the objection in good faith, including because of a conflict of interest, and that "it's implicit that the Court will be considering an objection". Further, Mr Astill submitted, it would not be just, quick or cheap to join Taunton10 because there would be an "extra body at the bar table", the "hearing may go longer", and costs would increase.
[13]
Conclusion in relation to the proper construction of s 181(6) of the SSD Act and whether Taunton10 ought be joined to the proceedings pursuant to s 181(6)(b)
In relation to whether Taunton10 can and ought be joined to the proceedings pursuant to s 181(6)(b) of the SSD Act, I find as follows:
1. The better view is that paragraphs (a) and (b) in s 181(6) of the SSD Act are to read disjunctively; that is, as not requiring the conditions in both paragraphs to be met before a person can be joined as a party to proceedings for an order to give effect to a strata renewal plan. So much is clear from the words in the chapeau to s 181(6): "Any of the following persons …" (emphasis added). The indefinite pronoun "any" plainly connotes more than one class of persons who may be joined as a party to the proceedings. Had Parliament intended for the paragraphs to be ready conjunctively or cumulatively, then a conjunction such as "and" or "both" would have been used. As submitted by Mr Koikas, the structure of s 181(b) differs from that of s 179(2), the paragraphs in s 179(2) each being separated by the conjunction "and".
2. Such a construction of s 181(6) is consistent with a purposive and contextual reading of Division 7 of Part 10 of the SSD Act, recognising, as submitted by Mr Koikas, that a decision of the court giving effect to a strata renewal plan will invariably interfere with a person's proprietary rights and potentially result in the extinguishment of proprietary interests.
3. The effect of the submissions of the respondents to Taunton10's joinder motion in relation to the proper construction of s 181(6) would be to leave the court without a proper contradictor in circumstances where, as here, the dissenting owners who filed the 25 October 2023 objection are not parties to the proceedings before the court. As summarised by Pain J in Application by the Owners - Strata Plan No 61299 at [16], the process for a collective sale of a strata scheme provided for in the SSD Act involves numerous steps. There is no discernible legislative purpose to shut out persons from being heard in the court's consideration of a strata renewal plan persons who are lot owners, but who did not file an objection within 21 days of receiving notice of the application (in accordance with s 180(1)).
4. Of course, whether the court would exercise the power in s 181(6) to direct a person to be joined is a matter within the court's discretion.
5. In relation to the court's discretion here, I am not attracted to the first respondent's submission that the issues sought to be raised by Taunton10 are already before the court by way of the 25 October 2023 objection filed by Ms Opie and Mr and Mrs Ritchie. That is because Ms Opie and Mr and Mrs Ritchie are not parties to the proceedings. As I have held in relation to the proper construction of s 181(6), the effect of the respondents' approach would be potentially in every case (and certainly here where some persons who filed an objection to the application are not parties to the proceedings) to leave the court without a proper contradictor.
6. Nor, in relation to the court's discretion, do I accept that it would not be just, quick or cheap to join Taunton10 because there would be "an extra body at the bar table", the hearing "may go longer" and costs would increase. The hearing date will not be disturbed by the joinder, and it would be just to join Taunton10 having regard to the potential impact of the proceedings on its proprietary interests. It would accord with the rules of natural justice that Taunton10 be given the opportunity to be heard before the court makes any orders potentially affecting its rights or interests. As deposed by Taunton10's solicitor, Mr Palmer, if joined to the proceedings, Taunton10 intends to rely on a statement of facts and contentions (which contains two contentions); does not intend to file any expert evidence; and does not propose vacating the hearing set down to commence on 18 November 2024. The statement of facts and contentions annexed to Mr Palmer's affidavit raises only two contentions. None of this is likely to result in significantly more protracted, less efficient or more expensive proceedings.
[14]
(3) Whether Taunton10 can or ought be joined to the proceedings pursuant to r 6.24 of the UCPR
Having decided that the court has power to, and in the exercise of its discretion ought to make an order that Taunton10 be joined as a third respondent to the proceedings pursuant to s 181(6)(b) of the SSD Act, it is strictly unnecessary to consider whether I should, in the alternative, make an order for joinder pursuant to r 6.24 of the UCPR. However, the parties, in particular the respondents to Taunton10's notice of motion, having made submissions in relation to the availability of r 6.24 to order joinder in the circumstances here, I set out and consider the parties' submissions briefly below.
[15]
Taunton10's submissions in relation to r 6.24 of the UCPR
Taunton10 submitted that pursuant to r 6.24 of the UCPR, Taunton10's joinder as a party is necessary to the determination of all matters in dispute because of its proprietary interest in the subject matter of the proceedings.
Again, in relation to discretion, Taunton10 submitted that it would be quick, just and cheap to join Taunton10 because the hearing dates would not be disturbed, it would be just to join it as a party with regard to the potential outcomes of the proceedings, and it would be cheap because it would not unduly add to the costs of the proceedings. The issues raised by Taunton10 in its draft statement of facts and contentions only go to questions of construction and discretion. Mr Koikas acknowledged that he was not in a position to advise whether his client would put on "some confined lay evidence".
[16]
Submissions of the respondents in relation to r 6.24 of the UCPR
The respondents to Taunton10's motion submitted that Taunton10 must show that it is a person whose joinder as a party is necessary to the determination of all matters in dispute. Section 180(3) of the SSD Act expressly provides that a person who files an objection "need not" be a party to proceedings. Further, s 180(3) operates to negate any argument that a person might have under r 6.24 that its joinder as a party is necessary, including in reliance on Ross v Lane Cove. While it might be accepted that in the ordinary course, a dissenting owner will be affected by orders made under Part 10 of the SSD Act, Parliament turned its mind to the issue of who needs to be a party to proceedings and, "presumably to avoid the need for all lot owners within a scheme to be joined to strata renewal proceedings, enacted s 180(3) and established the criteria in s 181(6)".
As s 180(3) "operates to negate the necessity to join any dissenting owner who does file an objection", it would be "perverse" to find it necessary to join a dissenting owner who did not file an objection. Taunton10 could not make out the "jurisdictional requirement" for the operation of r 6.24 of the UCPR. However, this does not mean that r 6.24 has no work to do in proceedings under Part 10 of the SSD Act. Rule 6.24 is available to join other necessary parties, such as the proposed purchaser of a scheme. They are parties clearly affected by orders made under Part 10 and, if supportive of a strata renewal plan, not able to file an objection pursuant to s 180 of the SSD Act.
[17]
Conclusion in relation to whether Taunton10 can or ought be joined in proceedings pursuant to r 6.24 of the UCPR
In relation to whether Taunton10 can and ought be joined to the proceedings pursuant to r 6.24 of the UCPR, in the event that I be wrong in the construction I have adopted of s 181(6) of the SSD Act, I find as follows:
1. I am satisfied that Taunton10 is a person whose joinder is necessary to the determination of all matters in dispute in the proceedings. The rights or interests of Taunton10 are likely to be directly affected by orders made in the proceedings: Ross v Lane Cove at [57]-[58].
2. Insofar as discretion is concerned, I refer to and repeat my findings above at [49(5)]-[49(6)].
[18]
Costs
Pursuant to s 188 of the SSD Act, Taunton10 seeks its costs of its motion filed on 19 August 2024 and amended on 29 August 2024, consistent with the approach of Molesworth AJ in Kahu Holdings at [30]-[33].
I find that the appropriate and preferable approach is that the question of costs of the motion, and the amended motion, be reserved.
[19]
Conclusion and orders
The Court makes the following orders:
1. Taunton10 Pty Ltd be joined to these proceedings as third respondent pursuant to s 181(6)(b) of the Strata Schemes Development Act 2015 (NSW).
2. Costs of Taunton10 Pty Ltd's notice of motion filed on 19 August 2024 and amended on 29 August 2024 are reserved.
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27; [2009] HCA 41 at [47] (Hayne, Heydon, Crennan and Kiefel JJ).
See SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34 at [14] and [25]-[39] (Kiefel CJ, Nettle and Gordon JJ).
(2014) 86 NSWLR 34; (2014) 199 LGERA 298; [2014] NSWCA 50 at [57]-[58] (Leeming JA) (Meagher JA and Tobias AJA).
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: 11 October 2024
Parties
Applicant/Plaintiff:
The Owners - Strata Plan No. 20548
Respondent/Defendant:
Mount Street 4 Pty Ltd aft Mount Street 4 Unit Trust