White v Betalli & Anor

White v Betalli & Anor - [2007] NSWCA 243 - NSWCA 2007 case summary — Zoe

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Andrews v Wirral Rural District Council [1916] 1 KB 863 Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia [1932] HCA 9; (1932) 47 CLR 1 Bursill Enterprises Pty Ltd v Berger Bros Trading Pty Ltd [1971] HCA 9; (1971) 124 CLR 73 Clissold v Perry [1904] HCA 12; (1904) 1 CLR 363 Clos Farming Estates Pty Ltd (Recs and Mgrs Apptd)(ACN 003 435 256) v Easton and Another [2002] NSWCA 389; (2002) 11 BPR 20,605 Copeland v Greenhalf [1952] Ch 488 Deputy Commissioner of Taxation v Clark [2003] NSWCA 91; (2003) 57 NSWLR 113 Deputy Commissioner of Taxation v Dick [2007] NSWCA 190 Forestview Nominees Pty Limited and Anor v Perpetual Trustees WA Limited [1998] HCA 15; (1998) 193 CLR 154 Grigsby v Melville & Anor [1972] 1 WLR 1355 Hamlena Pty Ltd v Sydney Endoscopy Centre Pty Ltd (1990) 5 BPR 11,436 Harada v Registrar of Titles [1981] VR 743 Humphries v Proprietors Surfers Palms North Group Titles Plan 1955 [1994] HCA 21; (1994) 179 CLR 597 Johnson v Barnes (1873) LR 8 CP 527 Lolakis v Konitsas [2002] NSWSC 889; (2002) 11 BPR 20,499 Marquess of Zetland v Driver [1939] Ch 1 Mercantile General Life Reassurance Co v Permanent Trustee (1988) 4 BPR 9534 Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50; (2006) 81 ALJR 1 CASES CITED: Motteram v Eastern Counties Railway Company (1859) 7 CB (NS) 58; 141 ER 735 Mulwala & District Services Club v Owners Strata Plan 37724 [2000] NSWSC 1040; (2000) 50 NSWLR 458 Pennant Hills Golf Club Ltd v Roads and Traffic Authority of New South Wales [1999] NSWCA 110; (1999) 9 BPR 17,011 Pirie v Registrar-General [1962] HCA 58; (1962) 109 CLR 619 Puflett v Proprietors of Strata Plan No 121 (1987) 17 NSWLR 372 Quazi v Quazi [1980] AC 744 R v Powell (1854) 3 E & B 377; 118 ER 1183 R v Young [1999] NSWCCA 166; (1999) 46 NSWLR 681 Re Ellenborough Park [1956] Ch 131 Reilly v Booth (1890) 44 Ch D 12 Ridis v Strata Plan 10308 [2005] NSWCA 246; (2005) 63 NSWLR 449 Sydney Diagnostic Services Pty Ltd v Hamlena Pty Ltd (1991) 5 BPR 11,432 The Owners of Strata Plan No 3397 v Tate [2007] NSWCA 207 Tittman v Traill (1957) 74 WN (NSW) 284 White v Betalli & 1 Or [2006] NSWSC 537; (2006) 66 NSWLR 690 Wilcox, Judge of the Federal Court, Re; Ex parte Venture Industries Pty Ltd (1996) 66 FCR 511 Wilson & Anor v Meudon Pty Ltd & Anor [2005] NSWCA 448 Woollahra Municipal Council v Local Government Appeals Tribunal & Renwyn Pty Ltd [1975] 2 NSWLR 594 Wright v Macadam [1949] 2 KB 744

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DISPOSITION 16 By-law 20 is in the following terms: "The Registered Proprietors for the time being of Lot 1 shall have the right to store small watercraft within the area denoted (A) on the sketch annexed to this instrument." 17 The instrument in question is designated SP 67662 being the relevant strata plan for the two lots. 18 SP 67662 refers to a "right of footway, itself created pursuant to s88B of the Conveyancing Act 1919 and s7(3) of the Strata Schemes (Freehold Development) Act 1973". That right of footway is in favour of Lot 1 to the rear of Lot 2. As the trial judge made clear at [7], the purpose of the right of footway and of by-law 20 is plain, namely to give the owners of Lot 1 access to the water at Port Hacking and a space on which to store a small boat near the water. 19 The by-law was expressed to be made under s52 of SSMA. It was and remains common ground that that section provided no authority for the by-law. Section 52 provides that an owners' corporation may make by-laws to which Div 4 of Part 5 of Chapter 2 applies if certain conditions are satisfied. That category of by-law relates to the conferment of the right of exclusive use or enjoyment of common property or special privileges in respect of common property, neither being the case here. 20 Nor, as was common ground, was s46 applicable, relating as it does to by-laws made by an owners' corporation in accordance with a special resolution. 21 The question then became under what source of power was by-law 20 capable of being promulgated. This is when, indubitably, by-law 20 purported to create what was in the nature of an easement or restrictive covenant. According to the appellant, the legislature had expressly given that power (to create what was in the nature of an easement or restrictive covenant) by another particular provision, effectively "in the same instrument", namely s88B of the Conveyancing Act. Section 88B prescribed with particularity the mode in which that power should be exercised and the conditions and restrictions which must be observed. It thereby was said to exclude the operation of general expressions in the SSMA, such as s43 to achieve the same object. 22 The appellant thus invoked what I have earlier by way of shorthand called the "Anthony Hordern principle". In Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trade Unions of Australia (supra) an award of the Commonwealth Court of Conciliation and Arbitration granting preference to unionists was struck down. This was on the ground that the provisions of that order did not conform with the conditions which s40 of the Commonwealth Conciliation and Arbitration Act 1904 prescribed as regards as giving preference to members of organisations. The question thus becomes whether that principle applies to the by-law-making power under SSMA. 23 The relevant provisions of s88B of the Conveyancing Act 1919 are set out below: 88B Creation and release of easements, profits à prendre and restrictions on use of land by plans

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(1) ……… . (2) A plan shall not be lodged in the office of the Registrar-General for registration or recording under Division 3 of Part 23 unless it indicates in the manner prescribed in respect of the plan by regulations made under this Act or the Real Property Act 1900: (a) what easements, if any, are intended to be created: (i) burdening land comprised in the plan and appurtenant to any existing roads shown on the plan, and (ii) appurtenant to any roads to be vested upon registration of the plan, (b) what easements, if any, referred to in section 88A are intended to be created burdening land comprised in the plan and in whose favour those easements are intended to be created, (c) what other easements or profits à prendre, if any, are intended to be created appurtenant to or burdening land comprised in the plan, and (c1) what easements or profits à prendre, if any, appurtenant to or burdening land comprised in the plan are intended to be released or partially released, and (d) what restrictions on the use of land or positive covenants, if any, are intended to be created benefiting or burdening land comprised in the plan. (3) On registration or recording under Division 3 of Part 23 of a plan upon which any easement, profit à prendre, restriction or positive covenant is indicated in accordance with paragraph (a), (b), (c) or (d) of subsection (2) then, subject to compliance with the provisions of this Division: (a) any easement so indicated as intended to be created as appurtenant to any existing public roads shown in the plan or any roads to be vested in the council upon registration of the plan shall be created and shall without any further assurance vest in the council by virtue of such registration and of this Act, (b) any easement so indicated as intended to be created pursuant to section 88A shall be created and shall without any further assurance vest in the relevant prescribed authority referred to in that section by virtue of such registration and of this Act, (c) any other easement, profit à prendre or any restriction on the use of land (not being a restriction as to user of the type that may be imposed under section 88D or 88E) so indicated as intended to be created shall: (i) be created, (ii) without any further assurance and by virtue of such registration or recording and of this Act, vest in the owner of the land benefited by the easement or profit à prendre or be annexed to the land benefited by the restriction, as the case may be, notwithstanding that the land benefited and the land burdened may be in the same ownership at the time when the plan is registered or recorded and notwithstanding any rule of law or equity in that behalf, and (iii) not be extinguished by reason of the owner of a parcel of land benefited by such easement, profit à prendre or restriction holding or acquiring a greater interest in a separate parcel of land burdened thereby, and (d) any restriction on the use of land or positive covenant that is of the type that may be imposed under section 88BA, 88D or 88E and is so indicated as intended to be created takes effect as if it had been so imposed. ………" 24 The plan is to be lodged in the office of the Registrar General for registration or recording of, relevantly, easements or other restrictions on the use of land. Such a plan is one lodged pursuant to Div 3 of Part 23 being relevantly s195A of that Division and Part, but also, relevantly to the present case, includes a plan lodged pursuant to s7(3) of the Strata Schemes (Freehold Development) Act 1973. The latter is in the following terms: "(3) The provisions of section 88B of the Conveyancing Act 1919 apply to a strata plan and a strata plan of subdivision in the same way as they apply to a plan referred to in that section relating to land under the provisions of the Real Property Act 1900, except in so far as that section authorises the creation or release of easements, or the creation of restrictions on the use of land or positive covenants burdening or benefiting land not under those provisions." 25 The exception above is not applicable this not being old system land. 26 At the time of registration of a strata plan, s7(3) enables the creation of easements or restrictions on the use of land burdening or benefiting lots or common property in a strata plan. It thereby extends to strata plans the procedure set out in s88B of the Conveyancing Act 1919, so long as the land is held under the provisions of the Real Property Act 1900, as is this land; see "Strata Titles" by Neville Moses and others (Thompson Law Book Company) at 603. 27 The authors of the above work explain that the procedure represented a marked improvement on that adopted under the earlier 1961 Strata Titles Act. This was in overcoming the considerable delays which were frequently encountered when local councils insisted on the creation of easements before approving a strata plan. That usually necessitated the preparation of a further plan and involved delay pending its registration. Because of the terms of s88B(3)(c), notwithstanding the rules of law or equity to the contrary, the result will not differ should the dominant and servient tenements be vested in the same owner, as is the case where a developer wishes to create restrictions in the nature of easements or restrictive covenants at the inception of the strata plan. 28 The appellant then sought to invoke the Registrar General's supervision of the registration process and the essential requirements for the creation of, relevantly, a restriction on use. The appellant did so in order to establish that the regime with its administrative outworking, under s88B was a distinct and particular one. This was to demonstrate that s88B did indeed satisfy the Anthony Hordern principle in its detailed prescription of the mode in which the relevant power to register such a restriction is regulated and supervised. The detailed procedure for such registration is set out in "Baalman & Wells Land Titles Office Practice" edited by Ticehurst (LBC) at 397-400. In particular, the restriction must comply with s88(1) of the Conveyancing Act so as to clearly indicate: (a) the land to which the benefit of the restriction is appurtenant; (b) the land which is subject to the burden of the restriction; (c) the persons (if any) having the right to release, vary or modify the restriction other than the persons having, in the absence of agreement to the contrary, the right by law to release, vary or modify the restrictions; and (d) the persons (if any) whose consent to a release, variation or modification of the restriction is stipulated for. 29 The way in which restrictive covenants under s88B may be varied or released is likewise prescribed in some detail; see Baalman and Wells at 401 and following. 30 The appellant's argument invoking the Anthony Hordern principle seeks to overcome the difficulty that the Conveyancing Act does not constitute the same instrument as the relevant strata titles legislation. She does so by invoking s7(3) of the Strata Schemes (Freehold Development) Act as effectively constituting the one regime in a broad statutory sense. 31 The appellant likewise contends that the power expressed in detailed prescriptive terms in s88B is to be contrasted with a general power to create by-laws lacking any such detailed prescription under the strata titles legislation.

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32 It is however at this point that the argument breaks down. This is because it can be clearly shown that the strata titles legislation creates an alternative mode for creating what is in the nature of an easement or restrictive covenant, with its own detailed prescription distinct from that under the Conveyancing Act. That mode has its own quite distinct legal requirements and consequences such as how one alters a particular restriction. 33 In this analysis it must be remembered that the "Anthony Hordern principle" is in reality no more than a presumption in aid of construction applicable in construing a particular provision conferring a power as opposed to general provisions of the same instrument which might otherwise confer the same power. It has nothing to say to two particular and distinct sets of provisions conferring distinct though overlapping powers more especially when in different albeit connected statutory instruments. 34 I need to turn to the distinct particularities in mode of exercise of the by-law-making power and in particular to the distinct conditions and restrictions which attend the creation of a by-law purporting to create what is in the nature of an easement or restrictive covenant under the strata titles legislation and specifically SSMA. 35 Division 1 of Part 5 of SSMA is headed "What by-laws apply to a strata scheme?". 36 Section 41 then deals with new strata schemes in the following terms: " 41 What by-laws apply to new strata schemes? (1) This section applies to strata schemes that came into existence after the commencement of this section. (2) The by-laws in force for a strata scheme are the by-laws adopted by or lodged with the strata plan registered by the Registrar-General for the strata scheme, as in force at the date of lodgment, subject to any amendment, repeal or addition recorded by the Registrar-General under section 48." 37 Section 41 is accompanied by a note in the following terms: "Note . Section 8 of the Strata Schemes (Freehold Development) Act 1973 and section 7 of the Strata Schemes (Leasehold Development) Act 1986 require that when a strata plan is submitted for registration it must be accompanied by the proposed by-laws for the strata scheme. Those by-laws are registered with the strata plan." 38 Section 43 in the same Division, is in the following terms: "43 What can by-laws provide for? (1) By-laws may be made in relation to any of the following:

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……" 45 The effect of s44 is to bind those specified including the relevant owners. This is as if the by-laws were the subject of mutual covenants to observe and perform their provisions signed and sealed by the owners' corporation and each owner as well as by mortgagees, etc. That again is distinct from the s88B regime which actually requires that there be a covenant restricting the use of the servient land and otherwise satisfying the distinct requirements for a valid restriction to which I have earlier made reference. 46 The appellant sought to rely upon s47 of SSMA which is in the following terms: " 47 Can an owners corporation add to or amend the by-laws? An owners corporation, in accordance with a special resolution, may, for the purpose of the control, management, administration, use or enjoyment of the lots or the lots and common property for the strata scheme, make by-laws adding to, amending or repealing the by-laws for the strata scheme." 47 In particular, the appellant contends that, based on the reasoning of the trial judge quoted below, it would follow that if a by-law could operate as a restriction on use of the land when created at the inception of the strata scheme, it could likewise be introduced by an addition or amendment to existing by-laws. It would thus, it is said, operate oppressively on someone who had acquired a strata lot before such addition or amendment took effect. This is what I call a "floodgates" argument. 48 I should quote the reasoning of the trial judge on this matter: "[44] By-laws frequently interfere with the rights of property of an owner of a lot. In Sydney Diagnostic Services Pty Ltd v Hamlena Pty Ltd (1991) 5 BPR 11,432, the Court of Appeal upheld the validity of a by-law which prohibited a proprietor or occupier of a lot from engaging in any enterprise other than the practice of medicine, but excluding the practice of pathology. It was held that the power in s 58(2) of the Strata Titles Act enabling by-laws to be made for the purpose of, inter alia, the use of lots, extended to regulating what activities could and could not be conducted on each lot. The Court (at 11,443 and 11,434) rejected the argument that s 58(2) of the Strata Titles Act (the predecessor to s 47 of the Strata Schemes Management Act) only permitted the making of "non-discriminating by-laws" which equally affected all lots.

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[46] No question of such an injustice arises in relation to the original by-laws which accompany the registration of the strata plan, as a person who buys a lot in the strata scheme is on notice of the rights and obligations created and imposed. In the present case, the consequence of the by-law being invalid would be a windfall to the plaintiff, who bought her property knowing that her use of it was subject to the rights of the owner from time to time of lot 2 to use the watercraft storage area, and a corresponding detriment upon the defendants who bought their land in the expectation of being able to enforce the rights provided by the by-law." 49 The appellant's argument really amounts to saying that such a by-law could operate oppressively if it could create restrictions on user. The oppression concededly is not from a by-law operating at the inception of a strata plan, since a purchaser would know what he or she was buying. Rather it is said to arise when introduced by later amendment after purchase. The trial judge correctly refuted that contention, pointing to the safeguards available to challenge such an amendment to a by-law. This could be by challenging the amendment as a fraud on the power or as a use of a by-law so amended for other than its proper purpose. Other safeguards include invoking the power of an adjudicator to make orders revoking such an amendment pursuant to s157 of SSMA or obtaining orders declaring such a by-law as amended to be invalid pursuant to s159. 50 Finally, I would adopt what is said by the trial judge at [47]-[48] in regard to s50 of SSMA: "[47] Section 50 of the Strata Schemes Management Act imposes restrictions on by-laws which may be made by an owners corporation during the "initial period". That is the period commencing when the owners corporation was constituted and ending on the day on which there are owners of lots, other than the original owner, whose unit entitlements are at least one-third of the aggregate of the unit entitlement. Subsection 50(1) provides: ' 50 Restrictions on by-laws during initial period (1) An owners corporation must not, during the initial period, make, amend or repeal a by-law in such a manner that a right is conferred or an obligation is imposed on one or more, but not all, owners or in respect of one or more, but not all, lots.'

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[68] Even if the interest created by by-law 20 was not recorded on the folio to lot 2, or was not the subject of an entry on that folio, it would not follow that by-law 20 was ultra vires, that is, made without power. It would not follow from the omission of the Registrar-General to record that interest on the folio to lot 2 that the by-law was inconsistent with s 42 of the Real Property Act, and therefore invalid because of s 43(4) of the Strata Schemes Management Act. Rather, the question would be whether the plaintiff held her land free of the interest created by the by-law which was not recorded on, or the subject of an entry on, the folio to lot 2. The question would then arise whether the statutory contract under s 44 of the Strata Schemes Management Act provides an exception to indefeasibility in the same way as personal rights arising from a contract between the registered proprietor and a person claiming an interest in land under a contract with the registered proprietor are enforceable, notwithstanding s 42. This matter was not argued, and need not be decided, having regard to my conclusion that the interest created by the by-law is recorded in, or is the subject of an entry upon, the folio to lot 2." 56 The respondent on appeal developed an argument which amounted to a contention that the actual by-law had in fact been "recorded in the folio" of the Register within the meaning of s42(1) of the Real Property Act, doing so by reference to an annexures F and H of the affidavit of Mr David Tremain of 11 November 2006, he being a registered surveyor. 57 The respondents contend that by virtue of the relevant provisions including definitions of the Real Property Act read with the Strata Schemes (Freehold Development) Act and in the events that happened, both the strata plan itself and the instrument by which the special by-law 20 was registered were not only required to be registered in the Register but were both so registered, these constituting annexures F and H to the Tremain affidavit. 58 The steps in this reasoning are as follows. The Register is defined in s3(1)(a) of the Real Property Act as "the Register required to be maintained by s31B(1)". 59 The Real Property Act refers to the Register in these terms: "31B The Register (1) The Registrar-General shall cause a Register to be maintained for the purposes of this Act. (2) The Register shall be comprised of:

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……" 61 I agree that this means that the definition of the "the Register" in the Real Property Act will thus apply to folios registered for strata plans, thus linking to s31B of the Real Property Act quoted above which directs the Registrar General to keep a register of folios, dealings and other records. 62 With respect to Torrens Title land generally the Registrar General creates a folio in the Register recording a description of the land to which it relates and certain particulars as to the estate or interest held in the land by the named proprietor or owner, etc; s32(1). 63 By s32(2) of the Real Property Act, it is provided that s32(1) does not apply in respect of the folio of the Register constituted under s22 or s23 of the Strata Schemes (Freehold Development) Act. 64 Section 22 of the Strata Schemes (Freehold Development) Act requires the Registrar General to create a separate folio stating that there is no common property, and containing certain other details relating to the administration of a strata scheme, where there is no common property. Section 23 of that same Act requires the creation of a folio for the common property of strata plans where there is common property. 65 It follows that s32(1) will thus still apply to the folio in the Register for each individual lot in the strata scheme, as there is no exclusion or separate provision in relation to individual lots. 66 I have earlier set out what is comprised in the Register, as distinct from the folio, pursuant to s31B(2) of the Real Property Act. From this it is apparent that it includes both folios and dealings registered under the Real Property Act or any other Act. This encompasses the record required to be kept pursuant to s32(7), being the requirement that the Registrar General "shall maintain a record of all dealings recorded in, or action taken in respect of, a computer folio, and such other information, if any, relating to the folio as the Registrar General thinks fit". 67 "Dealing" is defined in s3 of the Real Property Act as follows: "Any instrument other than a grant or caveat which is registrable or capable of being made registrable under the provisions of this Act, or in respect of which any recording in the Register is by this or any other Act or any Act of the Parliament of the Commonwealth required or permitted to be made". 68 It follows that both the strata plan itself and the instrument by which the special by-law 20 was registered are required to be registered in the Register. These, as I have said, were so registered as evidenced by the Tremain annexures F and H. The latter contains the actual by-law. 69 I should add that a document recording a by-law, or change of by-law, is under s48 SSMA a "dealing": Mulwala & District Services Club v Owners Strata Plan 37724 (2000) 50 NSWLR 458 per Young J. 70 Reverting to s42 of the Real Property Act, exceptions to indefeasibility for a registered property of an estate or interest in land recorded in a folio of the Register include "such other estates and interests and such entries, if any, as are recorded in that folio" [emphasis added]. 71 An interest is sufficiently "recorded in the folio" of the Register of the land if the folio states the registration number of the dealing creating it and identifies the interest (if only in generic terms): Bursill Enterprises Pty Ltd v Berger Bros Trading Pty Ltd (1971) 124 CLR 73 at 77-8, 92-3; see also Butt, "Land Law", 5th edition (2006) para [2079]. 72 I should add that Annexure H itself contains a notification of registration at the foot thereof; see Tremain affidavit pp25-6. 73 It follows from the foregoing that even were it insufficient for a Register to merely incorporate by reference a relevant strata scheme by-law filed with the strata plan, a proposition which I would not accept, the registration here did actually include in a folio the interest or entries in respect of by-law 20. 74 It is thus not necessary to consider the proposition contained in the judgment at [68] quoted above. This is insofar as it relies upon s44 of SSMA as providing an exception to indefeasibility on the supposition that the Registrar General had omitted to record the relevant interest so as to invoke s42(1) by reason of the by-law being inconsistent therewith.

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93 A plan intended to be registered as a strata plan must indicate that specified model by-laws prescribed by the regulations made under the Management Act were proposed to be adopted for the strata scheme and that other specified by-laws are proposed to be adopted for the scheme: s 8(4B), Freehold Development Act. If a strata plan indicates that by-laws other than the model by-laws prescribed by the regulations made under the Management Act are to be adopted for the strata scheme, the plan must be accompanied by the by-laws specified: s 8(4C). The by-laws proposed for a strata scheme have no effect until the strata plan (and any proposed by-laws that are required to accompany it) are registered, however, registration does not give effect to by-laws that were not lawfully made: s 8(4D), Freehold Development Act. 94 At the time Strata Plan 67662 was registered, the model by-laws for different types of strata schemes were set out in Schedule 1 of the Strata Schemes Management Regulation 1997 (see now cl 27, Sch 1-6, Strata Schemes Management Regulation 2005). The model by-laws for residential schemes were adopted on the registration of the strata plan for lots 1 and 2: see SP67662, Sheet 1 of 4. Those by-laws largely dealt with behavioural matters such as noise, parking of vehicles, appearance of lots. Clause 19 provided: " 19 Provision of amenities or services (1) The owners corporation may, by special resolution, determine to enter into arrangements for the provision of the following amenities or services to one or more of the lots, or to the owners or occupiers of one or more of the lots: (a) window cleaning, (b) garbage disposal and recycling services, (c) electricity, water or gas supply, (d) telecommunication services (for example, cable television). (2) If the owners corporation makes a resolution referred to in clause (1) to provide an amenity or service to a lot or to the owner or occupier of a lot, it must indicate in the resolution the amount for which, or the conditions on which, it will provide the amenity or service. Note: Section 111 of the Act provides that an owners corporation may enter into an agreement with an owner or occupier of a lot for the provision of amenities or services by it to the lot or to the owner or occupier." 95 I will return to the significance of this by-law. Statement of the case 96 The facts are not in dispute and can be reproduced from the reasons of the primary judge, White J: White v Betalli & 1 Or [2006] NSWSC 537; (2006) 66 NSWLR 690 (at [2] - [19]): " Background 2 Strata plan SP 67662 was registered on 11 April 2002 by a Mr and Mrs Thompson. The strata plan divided land then known as lot 36 in DP 215533 at Marina Crescent, Gymea Bay, into two strata lots. The plaintiff owns lot 2 in SP 67662. The defendants own lot 1. A house is constructed on each lot. 3 The two lots lie between Marina Crescent to the west and Port Hacking to the east. The northern boundary of both lots abuts a reserve. Lot 1 is the higher lot, with street frontage to Marina Crescent. It lies to the west of lot 2. Lot 2 is the lower lot, with frontage to Crown land at mean high watermark and thence to the water. There is a right of footway in favour of lot 1 to the rear, or eastern end, of lot 2. The rear of lot 2 is steeply sloping ground. From its boundary at mean high watermark there is a strip of Crown land. This was formerly grassed and is now partially landscaped. On this land there is a seawall dividing the land and the water at Port Hacking. 4 The strata plan adopted residential model by-laws 1-19, plus two special by-laws, 20 and 21. These by-laws were said to be made under s 52 of the Strata Schemes Management Act 1996 (NSW). The present dispute concerns by-law 20. It provides: "The registered proprietors for the time being of lot 1 shall have the right to store small watercraft within the area denoted (A) on the sketch annexed to this instrument." 5 The area denoted "A" abuts the Crown land at mean high watermark at its eastern end. This boundary is irregular in shape. The northern boundary of the area marked "A" coincides with the boundary of lot 2 and extends four metres. The western boundary of the area is three metres long. Its southern boundary is over four metres long, reflecting the irregular eastern boundary. A copy of a survey sketch of the area is attached to these reasons. All of the area denoted "A" on the sketch annexed to the by-law is on lot 2. 6 The owner of lot 1 has access to the watercraft storage area via the right of footway. At the eastern end of lot 2, the right of footway extends across the whole of the lot, except for a boatshed which is on the south-eastern corner of the lot. This boatshed belongs to lot 2, save for a portion of it which encroaches onto Crown land below the mean high watermark. That portion of the boatshed is common property. By-law 21 provides that the portion of the boatshed that extends beyond the mean high watermark is for the exclusive use, and is to be maintained by, the registered proprietor of lot 2. 7 The purpose of the right of footway and of by-law 20 is plain. The purpose is to give the owners of lot 1 access to the water at Port Hacking, and a space on which to store a small boat near the water. 8 Lot 2 is known as 2 Marina Crescent, Gymea Bay. The plaintiff bought this property on or about 13 April 2002. Lot 1 is known as 2A Marina Crescent. This land was initially bought in or about August 2002 by a Mr and Mrs Dedda. On or about 31 March 2004, the defendants exchanged contracts to purchase lot 1 from Mr and Mrs Dedda. They moved into the property on 29 June 2004. 9 After they moved in, the first defendant, Mr Betalli, put a 3.5 metre boat and trailer in the watercraft storage area. The trailer was connected to a sapling by a winch. The plaintiff and her husband objected to this, pointing out that there was no right to store a trailer. The plaintiff also complained that the boat and trailer extended outside the storage area and were not stored safely. On 16 July 2004, the solicitors for the plaintiff, Benetatos White, wrote to Mr Betalli. They contended that the boat then stored on lot 2 was not a small watercraft but a medium sized boat. They demanded that the defendant remove the boat, the trailer and the winch. Benetatos White also stated that the plaintiff had no issue with the storage of small watercraft by Mr Betalli in accordance with the terms of by-law 20. 10 After receiving this letter, Mr Betalli asked the plaintiff if she would have any objection to an inflatable boat being put in the watercraft storage area. She said she did not, provided the boat fitted in the designated area, was safe, and did not cause damage. 11 Following this conversation, Mr Betalli purchased an inflatable boat. 12 On 8 August 2004, the boat and trailer then being stored in the watercraft storage area were removed. In about late August 2004, the inflatable boat was put in the watercraft storage area and secured to a tree. The plaintiff's husband helped with this. 13 It might have been hoped that this would be the end of the issue. However, that was not the case. 14 In December 2004, the plaintiff advised Mr Betalli that she had received a letter from the Department of Lands indicating that the by-law for the storage of the boat was invalid, because it was on her property and not common property. She advised him that she proposed to call an annual general meeting of the body corporate so that the by-law could be removed. On 27 January 2005, she convened that meeting. The meeting was held on 12 February 2005. However, the resolution to repeal by-law 20 on the ground of its not being valid was not passed. The defendants voted against that resolution. 15 A mediation was held on 5 May 2005, but it failed to resolve the dispute. 16 On the weekend of 4 and 5 June 2005, without prior notice, the plaintiff caused a retaining wall to be constructed in the watercraft storage area. At or about this time, she also caused steps to be built extending down to the water's edge. These were wooden steps which joined up with existing concrete steps. However, the steps also extended into the watercraft storage area. Associated with these works, the plaintiff carried out landscaping work, involving the construction of an earth bank on which native plants were planted, and which appears then to have been covered with wood chips. This work was done partly on the watercraft storage area and partly on the Crown land. 17 The result of these works is that the area which can physically be used for the storage of watercraft has been substantially reduced. Before the work was carried out, the watercraft storage area was about fifteen square metres. It was a grassed area which extended at its southern edge to the bottom concrete step. At its eastern edge, which was the boundary of lot 2, there was an earth and grass bank which led over the grassed strip of Crown land to the seawall. After the work was carried out, the effective area for storing a boat was effectively the area within the retaining walls. These walls were about 0.6 metres high and were positioned well inside the watercraft storage area. They extended about 0.7 metres into the adjacent reserve so that the practical storage space extended into the reserve and outside the boundary of lot 2. Within the confines of lot 2, the area now physically available for the storage of a boat is limited to an area of about four metres by two metres. 18 The construction of the retaining wall and steps, and the landscaping, has made it more difficult for a boat to be taken down to the water from the watercraft storage area. A boat now has to be lifted over the retaining wall and across the garden which has a steeper incline than existed previously as a result of the earth fill which has been put on the site. The plaintiff said in evidence that there has been no change in the incline, but I do not accept this evidence. The change is apparent from the photographs. 19 Mr Betalli continued to store the inflatable boat in the watercraft storage area until November 2005. After the construction of the retaining wall and the steps in June 2005, it was difficult to drag the boat over the retaining wall and down to the water and back again without assistance. In November 2005, he replaced that boat with a 3.5 metre aluminium boat because the inflatable had a deflated keel and floor."

[95]

(d) that the provision is made for a proper purpose and fairly falls within the concept of a by-law, that is, the regulation of the rights and responsibilities of lot owners, occupiers, or the owners corporation, in respect of the lots, or the lots and common property, for the strata scheme." 101 He held (at [38]) that the subject matter of by-law 20, the provision of a storage area for small watercraft for the benefit of the upper lot, was an appropriate matter to be regulated by a by-law (s 43(1)). In his Honour's opinion (at [38]) whether or not by-law 20 was authorised under s 43(1) of the Management Act being "in relation to ... matters appropriate to the type of strata scheme concerned", it would be valid, provided it was not inconsistent with s 49, or any other Act or law: see s 43(4). 102 His Honour (at [39]) did not consider that s 43(1) should be construed narrowly or at too high a degree of generality. Thus, in his view: "The present strata scheme could be classified as a residential scheme of a type, being a subdivision of land next to water into a small number of residential lots and common property. The storage of boats belonging to the occupier of any lot in such a subdivision is a matter appropriate to that type of scheme." 103 The primary judge then turned to determine whether by-law 20 was inconsistent with any other provision of the Management Act, or any other Act or law. He opined (at [40]) that if by-law 20 was not authorised by s 43(1), that subsection was "not an exhaustive statement of the power of the original owners to make by-laws to accompany the registration of the strata plan and the by-law is otherwise within the scope and object of the Act." His Honour did not identify any other source of power for original owners to make by-laws to accompany the registration of the strata plan. The argument has proceeded in this Court on the basis that ss 41 and 43 were the critical provisions to which regard should be paid in determining the validity of by-law 20. 104 His Honour found confirmation (at [41]) for his view in the Second Reading Speech of the New South Wales Minister for Fair Trading on the introduction of the Bill which became the Management Act (New South Wales Legislative Assembly, Parliamentary Debates, (Hansard) 13 November 1996, 5916 at 5921). In her speech the Minister elaborated on the proposition that: "... one of the major initiatives in this Bill is to allow more flexibility in the use of by-laws, and to encourage the adoption of by-laws more appropriate to the nature of individual strata schemes." 105 The primary judge then considered s 47 of the Management Act, on the premise (at [42]) that there was no reason to think that the power of the original owner to make by-laws which accompany the strata plan on its registration should be any narrower than the power of the owners corporation to make by-laws. He noted (at [44]) by reference to the decision in Sydney Diagnostic Services Pty Ltd v Hamlena Pty Ltd (1991) 5 BPR 11,432 that "by-laws frequently interfere with the rights of property of an owner of a lot", then observed: "45 As by-laws may be made which substantially interfere with the right of an owner of a lot to use the lot, it is hard to see why it should be contrary to the 'scheme' of the Strata Schemes Management Act for a by-law to confer on one lot owner the right to use part of another lot." 106 His Honour also implied (at [48]) from s 50 that after the initial period an owners corporation may make a by-law in such a manner that a right is conferred, or an obligation imposed, on one or more but not all owners, or in respect of one or more but not all lots, if the by-law is otherwise authorised by s 47. He concluded that "[i]t is hard to see why that implication would not extend to authorising an owners corporation making a by-law under s 47 that conferred a right in respect of one lot and imposed a correlative obligation in respect of another lot." 107 Finally the primary judge (at [50]) inferred that, but for the restrictions in s 49(1), a by-law could be made which would have the effect of doing any of the things which that section prohibits, an inference reinforced by Hamlena Pty Ltd v Sydney Endoscopy Centre Pty Ltd (1990) 5 BPR 11,436 where Young J (as his Honour then was) said of the equivalent provision in the Strata Titles Act 1973 (the "1973 Act"): "S 58(6) prevents a by-law being made which would restrict the devolution of a lot. This subsection seems to me to envisage the possibility that were it not for its existence, there would be power within s 58 to pass a by-law limiting the right to assign a lot." 108 The primary judge concluded (at [51]) that: "51 If, but for s 49(1), a by-law could validly restrict the transfer or lease of a lot, there cannot be anything intrinsically wrong in a by-law interfering with the property rights of an owner in fee simple of a lot. " (emphasis added) 109 The primary judge accordingly held that by-law 20 was validly made pursuant to s 43 of the Management Act and, therefore, enforceable. He also held that the construction and landscaping work undertaken by the appellant within the watercraft storage area was done in breach of the by-law. He ordered the appellant to remove the wooden steps and the retaining wall and restore the watercraft storage area to its former condition. He also restrained the appellant from preventing or impeding the cross-claimants from storing small watercraft within the watercraft storage area. 110 The primary judge's conclusions meant it was unnecessary to determine the respondents' alternative claim to be entitled to store their boat on the subject area by reason of the appellant being estopped from departing from her representations that the defendants could use the watercraft storage area to store a boat, provided the boat was a small watercraft which fitted within the storage area and did not cause damage: see primary judgment (at [70] - [73]). The respondents have not sought to agitate the estoppel argument in this Court by way of Notice of Contention. Submissions on appeal 111 Mr B W Rayment of Queens Counsel, who appeared for the appellant on appeal with Mr R Tregenza, but not below, advanced two principal submissions. The first was that by-law 20 was a nullity by virtue of the principle enunciated in Anthony Hordern & Sons v Amalgamated Clothing & Allied Trades Union of Australia [1932] HCA 9; (1932) 47 CLR 1. 112 Mr Rayment submitted that the application of the Anthony Hordern principle had the consequence that the specific power to create easements in s 88B of the Conveyancing Act 1919 precluded the creation of an easement using the general power in s 43 of the Management Act. 113 Mr Rayment acknowledged that there might be doubt about whether the interest created by by-law 20 was an "easement strictly so-called" but contended that even if it was not, it created an interest within s 88B(2)(d) of the Conveyancing Act. He contended that by-law 20 created both a restriction on the use of lot 2 as it prevented the appellant from building structures in the watercraft storage area which interfered with the respondents' right of storage and amounted to a positive covenant to permit the respondents to bring a boat onto the appellant's land and leave it there. 114 Mr P Gray of Senior Counsel who appeared for the respondents with Ms P Koroknay, submitted that it was debateable whether the right by-law 20 created was capable of being created by an easement. He referred to Copeland v Greenhalf [1952] Ch 488. 115 Next he contended that, in any event, the appellant's attempt to invoke the Anthony Hordern principle must fail first, because this was not a case of comparing a general and a specific power, but of comparing 2 specific powers and secondly, because the powers referred to were not in "the same instrument". He accepted, however, that the power to create easements for the purposes of strata schemes was part of the same legislative scheme as the power to create by-laws. 116 Mr Rayment's second argument was that by-law 20 was invalid because the power to make by-laws in the Management Act could not be used to confer a right on the respondents to use and occupy part of the appellant's lot. 117 Mr Gray submitted that this Court had already ruled in Sydney Diagnostic Services Pty Ltd v Hamlena Pty Ltd that an owners' corporation could make by-laws which restricted the occupation a lot owner could carry on from one or more but not all lots in a strata plan. He contended that by-law 20 was another illustration of the valid exercise of that power. He also argued that the appellant's submissions failed to acknowledge the High Court's recognition of the power of a body corporate "to interfere with the rights of proprietors in respect of their lots" by means of by-laws, relying upon Humphries v Proprietors Surfers Palms North Group Titles Plan 1955 [1994] HCA 21; (1994) 179 CLR 597 at 615 per McHugh J. 118 Mr Gray also argued that it could be inferred from the fact that s 50 restricted the making of a by-law during the initial period which conferred a right or imposed an obligation on one or more, but not all, owners or in respect of one or more, but not all, lots, that after the initial period an owners corporation could make such by-laws. A fortiori, he contended, so too could a developer under s 43 at the stage of the original lodgement of the strata plan.

[97]

122 Strata title involves the ownership of individual parcels (lots) of floor and airspace. The concept was pioneered in the Conveyancing (Strata Titles) Act 1961 (the "Strata Titles Act"), the long title to which was, relevantly, "An Act to facilitate the subdivision of land in strata and the disposition of titles thereto". It was intended to "give a satisfactory system of title to a flat or a home unit": Second Reading Speech to the Conveyancing (Strata Titles) Bill, New South Wales Legislative Assembly, Parliamentary Debates, (Hansard) 21 February 1961 at 2524. 123 The Strata Titles Act was passed at a time when "absolute ownership of flats in the sense that one may 'own' a cottage", did not exist: Strata Titles, A F Rath, P J Grimes and J E Moore, The Law Book Company Ltd, 1966, ("Rath et al", at p xi). According to Macfarlan J's Foreword, Mr Rath and Mr Grimes were associated with the drafting of the Strata Titles Act, "practically from the beginning". Rath et al pointed out that before the Strata Titles Act was passed, "a variety of schemes existed calculated to secure to flat-dwellers the nearest practical equivalent to ownership". All had their disadvantages. Home-unit companies systems, for example, the most common scheme associated with flat-ownership, whereby ownership of specified shares carried with it the right to occupy particular parts of a building, fell short of giving the practical equivalent to ownership. Courts would not recognise the shareholder as the owner of his or her flat and, accordingly, the owner could not pursue the normal legal remedies of a land-owner, such as trespass, ejectment etc: Rath et al (at xii); see also Tittman v Traill (1957) 74 WN (NSW) 284; Wilson & Anor v Meudon Pty Ltd & Anor [2005] NSWCA 448 per Bryson JA (at [61] - [65]). 124 The committee which drafted the Strata Titles Act identified two problems it was expected to solve. First, to provide conclusive title for various parts of a building and secondly, and consequentially, to formulate a code for living in close community: Rath et al, at xiii. It was the latter problem which the drafters described as the "harder, by far" and which they sought to regulate by what they described as "house-rules" but, which, in the Strata Titles Act, were called "by-laws": Rath et al, at xiv, 31. 125 The Strata Titles Act enabled certificates of title to issue for individual parcels (lots) of floor and airspace in buildings shown on a registered strata plan: s 3(1). While the central concept of strata schemes is the ownership by individual proprietors of the cubic space within a building forming part of the parcel to which a strata scheme relates, as in the case of the present strata scheme, a lot may also include land: s 7(2), Freehold Development Act; see also Woollahra Municipal Council v Local Government Appeals Tribunal & Renwyn Pty Ltd [1975] 2 NSWLR 594. 126 Land in a strata plan that was not comprised in a lot was common property: s 2. The common property was held by the proprietors as tenants in common in shares proportional to the unit entitlement of their respective lots: s 9(1). 127 The strata title building was regulated by by-laws providing for the control, management, administration, use or enjoyment of the lots and the common property and had to include the by-laws in the First and Second Schedules: ss 13(1) and (2), Strata Titles Act. In their notes to s 13, Rath et al observed (at 31): "The management of the building is achieved by two means, first the setting up of a controlling body [the body corporate, s 14] and secondly the provision of rules, known as by-laws, relating to the structure of the controlling body and the general administration of the building. " (emphasis added). 128 The First Schedule by-laws dealt with duties of the proprietor of a behavioural nature (repairing and maintaining lots, not using the lot in a manner which would cause a nuisance or a hazard to another occupier), duties of the body corporate and procedural matters relating to the body corporate. Clause 3(f) enabled the body corporate to grant a proprietor the right to exclusive use and enjoyment of common property, or special privileges in respect thereof, a power continued in Ch 2, Pt 5, Div 4 of the Management Act. The Second Schedule constrained a proprietor from using his lot for any illegal or injurious purpose, from making undue noise and from keeping pets if forbidden by the body corporate.

[98]

129 Section 13(3) provided, in substantially the same terms as s 49(1) of the Management Act, that a by-law could not prevent a dealing relating to lots. In an article written after the Strata Titles Bill had passed the first reading stage in the Legislative Assembly and while the second reading had been deferred to permit public comment, Rath described s 13(3) as a "fundamental provision" intended to ensure "that no alteration of the by-laws shall be capable of changing the structure of strata titles as virtually equivalent to surface titles": A. F. Rath, "Strata Titles in New South Wales", (1961) 3 Sydney Law Review 316 (at 320). 130 This brief description of the Strata Titles Act and the historical context in which it was enacted identifies the central constructs on which it is based. Lot proprietors were to have title to their lot, whether it be the cubic space within the building to which the strata scheme related or any land which formed part of their lot. By-laws were to be used to regulate the management of the building in the common interest of the proprietors. These core constructs have been continued as strata title legislation has evolved. 131 The Strata Titles Act was repealed by the Strata Titles Act 1973 (the "1973 Act") which was passed, at least in part, to expand strata titles law to provide for day to day management issues arising in strata title schemes: Review of the Strata Titles Act 1973, Issues Paper, Strata Titles Act Review Committee, March 1992, at 3 (the "Issues Paper"). Section 58, the by-law making power, appeared in Part 4 dealing with "Management". Save as provided in s 58, the by-laws in Schedule 1 to the 1973 Act were the by-laws in force in respect of each strata scheme: s 58(1). 132 By-laws 1-11 in Schedule 1 dealt with procedural matters relating to the body corporate. By-laws 12-29 considerably expanded the 1961 by-laws dealing with behavioural issues. They were substantially reproduced in the model by-laws for residential schemes adopted by the Strata Schemes Management Regulation 1997. In Hamlena Pty Ltd v Sydney Endoscopy Centre Pty Ltd (at 11,440) Young J (as his Honour then was) observed that to the extent the by-laws in Schedule 1 did not deal with the administration of the body corporate or the common property, "[they] related to conduct within a lot, that … would have some impact on the owners as a whole, but that is as far as one could take the matter."

[102]

137 The Issues Paper (at 16) identified the question whether the 1973 Act should be separated into two Acts, one dealing with title aspects and the other with management and disputes, for consideration. Although the Final Report did not refer to this issue, it was plainly adopted. The Management Act separated the provisions of the 1973 Act dealing with development and subdivision issues, from the provisions of the 1973 Act dealing with the management and administration of strata schemes. At the time the Management Act was passed the 1973 Act was re-named the Strata Schemes (Freehold Development) Act 1973 on and from 1 July 1997: Strata Schemes Management (Miscellaneous Amendments) Act 1996, Sch 2.30; and see Ridis v Strata Plan 10308 [2005] NSWCA 246; (2005) 63 NSWLR 449. 138 The significance of the amendments effected by the Management Act and its separation from the provisions of the 1973 Act dealing with development and subdivision issues was explained by the responsible Minister in the Second Reading Speech to the Strata Schemes Management Bill (New South Wales Legislative Assembly, Parliamentary Debates, (Hansard) 13 November 1996, at 5916): "A large segment of the New South Wales community is affected in some way by this legislation, either living in, owning or managing a strata title property. The benefits of this revised legislation will be far-reaching. There are now about 45,000 schemes housing perhaps a million people, and it is clear how significant these new laws are going to be. It is expected that a high proportion of all residential buildings constructed over the coming decades will reflect the tendency towards urban consolidation, and strata title is likely to be used in respect of smaller parcels of land … Even the title of this Bill is significant. It is made clear by the use of the title Strata Schemes Management Bill, that this bill deals with the management and administration of strata schemes rather than the development and subdivision issue…. The management and dispute provisions will now stand alone under a separate statute. This will reduce confusion among the public on who administers the laws applying to quite different aspects of strata title schemes. " (emphasis added) 139 It should be noted that while the owners corporation is the occupier of the common property by virtue of its management and control of the use of that area (s 61(1)(a); Puflett v Proprietors of Strata Plan No 121 (1987) 17 NSWLR 372 at 375 per Lee J), the Management Act does not confer any express role on it in relation to a proprietor's use of the lot or lots owned by that person. It is "a statutory corporation, created by Act of Parliament for a particular purpose [and] is limited, as to all its powers, by the purposes of its incorporation as defined in that Act": Humphries v Proprietors Surfers Palms North Group Titles Plan 1955 (at 604) per Brennan and Toohey JJ. 140 As Rath et al observed (at 3) of a body corporate, "[i]t is merely a statutory body comprising all lot proprietors and acting as a convenient agent to administer their common interests". That observation is equally applicable to an owners corporation.

[103]

141 The Management Act created a more comprehensive regime for by-laws in Ch 2, of the Management Act, headed "Management of Strata Schemes". That heading is taken to be part of the Management Act: s 35, Interpretation Act. The Introductory Note to Pt 5, specifies that it "deals with by-laws for a strata scheme governing such things as the behaviour of residents of the scheme and the use of common property" as well as "procedural requirements for the making of certain by-laws and [their] amendment or repeal". Section 43 enumerates the matters for which by-laws may provide. Section 49 specifies matters which cannot be dealt with in by-laws. Section 50 imposes restrictions on the by-laws which can be made during the initial period. Those provisions govern the power to make by-laws whether by a developer before the registration of the strata plan, or following its registration, by an owners corporation. 142 Most of the matters specified in s 43 deal with the behavioural issues which have been part of strata title scheme by-laws since 1961. However there are three new matters. First, the power to make a by-law in relation to the "details of any common property of which the use is restricted". Secondly, the provision permitting by-laws in relation to "matters appropriate to the type of strata scheme concerned" and thirdly, s 43(2) providing that subs 43(1) does not limit the matters for which by-laws may be made. The last two items were clearly inserted to give effect to the Review Committee's recommendation that there should be greater flexibility in by-laws. They are, it must be conceded, expressed in extremely general terms, as, too is the power (s 47) to make by-laws for the purpose of the control, management, administration, use or enjoyment of the lots or the lots and common property for the strata scheme and the inhibition in s 50 on making by-laws conferring a right or imposing an obligation on one or more, but not all, owners or in respect of one or more, but not all, lots.

[104]

143 However even general words should not be construed without limitation, if to give them their "wide prima facie meaning would lead to results that would be contrary to the manifest policy of the Act looked at as a whole or would conflict with the evident purpose for which it was enacted": Quazi v Quazi [1980] AC 744 (at 808) per Lord Diplock, cited with approval by Spigelman CJ in Deputy Commissioner of Taxation v Clark [2003] NSWCA 91; (2003) 57 NSWLR 113 at [129]; see also R v Young [1999] NSWCCA 166; (1999) 46 NSWLR 681 (at [23]-[29]) per Spigelman CJ. 144 There is no express provision in the Management Act authorising a by-law which confers a right on one lot proprietor to use another proprietor's lot. In my opinion the general words in the provisions to which I have referred do not authorise such a by-law. The primary judge's conclusion that the power to make by-laws can be used to confer a right on one proprietor in a strata scheme to use or occupy part of the lot of another proprietor is inconsistent with the Management Act, both with its express terms and with its manifest and evident purpose. 145 The purpose of the Management Act was to permit owners corporations to manage strata schemes as a whole, not to confer rights on one proprietor at the expense of another. That purpose was emphasised in the Second Reading Speech. It can be discerned from the long title to the Act, the heading to Chapter 2 in which the by-law making provisions appear in Pt 5 and in the Introductory Note to Pt 5. It is consistent with the legislative history of strata titles legislation. 146 Returning to s 43, it is notable that the legislature thought it necessary to insert the power in s 43(1) to make a by-law in relation to the "details of any common property of which the use is restricted". In my opinion that indicates that the legislature thought it necessary to specify that head of by-law power to validate such a by-law. The absence of such a head of power to make a by-law relating to one proprietor's use of another's lot is a strong indication that there is no power to make a by-law having that effect.

[107]

149 The fact that the legislature saw it as necessary to spell out in such detail the circumstances in which one lot owner may obtain exclusive enjoyment of the whole or part of the common property is a strong contrary indication to an interpretation of the general words of s 43, s 47 or s 50, as permitting a by-law in terms of by-law 20. If the legislature intended that one or more lot proprietors could use another proprietor's lot, one would at least have expected provisions in similar terms to ss 52 - 55 to accompany that power. 150 The same reasoning applies to the inclusion of cl 19 in the model by-laws for residential schemes. The specification of the circumstances, including the conditions and costs, in which the owners corporation can enter into arrangements to provide amenities or services to the owners or occupiers of one or more lots but not all indicates a legislative intention that the general words in s 43, s 47 and s 50 could not support by-laws affecting individual lot owners. 151 I cannot draw the same comfort from s 49 of the Management Act as the primary judge (at [51]). As Rath explained the restraint on the power to make by-laws preventing dealings relating to lots was intended to secure, rather than detract from, a strata proprietor's right to unfettered title to a lot equivalent to that of a homeowner. A by-law which impinges on one proprietor's title to a lot by giving another proprietor the equivalent of property rights over part of it is inconsistent with that core construct of strata titles legislation. 152 Finally, I note that the primary judge's conclusion rested, at least in part, on the premise that a developer's power to make by-laws was no less than the power available to an owners corporation. The conclusion that an owners corporation could make a by-law like by-law 20 conflicts with the principle that a statutory power will not be interpreted as permitting interference with vested proprietary rights unless that intention is made manifest by express statement or necessary implication: Clissold v Perry [1904] HCA 12; (1904) 1 CLR 363 at 373.

[108]

153 The authorities on which the respondents rely do not, in my opinion, support their case. Humphries v Proprietors Surfers Palms North Group Titles Plan 1955 concerned the validity of a management agreement entered into by the body corporate with the appellants under which, in consideration of a lump sum annual payment, they agreed to ensure that the property was properly maintained and administered and kept in good repair. One of the appellants' specific duties was to conduct a letting agency for the letting of townhouses on the property on behalf of such of the owners as required the service. The individual owners who took advantage of that service were not themselves required to remunerate the appellants, whose recompense was part of the lump sum annual payment. The High Court held that the body corporate had no power to enter into a contract to procure the provision of a letting service for particular lot proprietors or occupiers and that the letting services provision was not severable from the remainder of the agreement which, accordingly, was wholly void. 154 On appeal, the appellants contended the body corporate had power to make the management agreement under the Building Units and Group Titles Act 1980 (Qld) (the "Queensland Act"). They relied, in part, on the by-law making power conferred in s 30 which permitted a body corporate "for the purpose of the control, management, administration, use or enjoyment of the lots and common property the subject of the plan" to amend the pro forma by-laws contained in the Third Schedule to the Queensland Act. The Third Schedule by-laws dealt in substantially the same terms with the behavioural matters the subject of cll 1 -17 of the Strata Schemes Management Regulation 1997. 155 Brennan and Toohey JJ (at 603) rejected that submission. They regarded the Third Schedule as indicating the range of by-laws which might be made, saying: "Whatever the scope of that power may be, it does not avail the appellants in this case. There was no by-law made which might have authorised the body corporate to secure the provision of the services of a letting agency for the proprietors of the individual lots. In general, the Third Schedule does not authorise a body corporate to provide services to individual lots although cl 10 impliedly authorises a body corporate to provide a garbage disposal service for individual lots. If cl 10 is an exception to the general scheme of the Third Schedule, the exception is explicable by the common interest of all proprietors and occupiers in the removal of garbage from any part of the premises ." (emphasis added) 156 It should be inferred from this passage that their Honours were of the view that the by-law making power authorised the body corporate to secure the provision of the services of a letting agency for the proprietors of the individual lots, if such an agreement was in the common interest of all proprietors. 157 Deane and Gaudron JJ referred to s 37(1)(a) and s 27(3) (relevantly in substantially the same terms as s 61(1)(a) and s 12 of the Management Act) and concluded (at 608): "Wide though those powers of control, management and administration may be, they are confined to the common property. They simply do not extend to the making of a contract binding the body corporate to pay 'remuneration' to the proprietor of a particular unit or townhouse as consideration for the conduct by that proprietor 'from his unit' of a letting agency whose services would be available to any proprietors who desired, as individuals, to lease their townhouses. Entry into such a contract is neither an incident of, nor reasonably necessary for, the control, management or administration of the common property. " (emphasis added). 158 Their Honours did not refer to s 30(2) of the Queensland Act which empowered the body corporate to make by-laws, inter alia, for the purpose of the control, management, administration, use or enjoyment of the lots as well as the common property. However, they agreed (at 608 - 609) with Brennan and Toohey JJ and McHugh J's conclusions that there was no other provision of the Act which either expressly or impliedly authorised the body corporate to enter into such a contract or to expend its funds in the payment of such remuneration, nor was there any by-law of the body corporate which conferred such authority. 159 McHugh J concluded (at 612) that nothing in the Queensland Act, expressly or by implication, authorised a body corporate to enter into the management agreement. Further in his Honour's view (at 614) the exclusivity provisions of the management agreement were inconsistent with the right of other proprietors to conduct lawful businesses from their lots. The implication to be drawn from the Queensland Act was that a body corporate had no power to enter into an agreement giving exclusive rights to a particular person in relation to the use of the lots and common property which carried with it the implied power to prevent proprietors from enjoying those rights.

[109]

160 McHugh J (at 615 ff) found comfort for his conclusion that the general powers conferred by ss 27 and 37 did not authorise the making of the agreement in s 30(2) of the Act which provided: "Save where otherwise provided in subsections (7) and (11), a body corporate, pursuant to a special resolution, may, for the purpose of the control, management, administration, use or enjoyment of the lots and common property the subject of the plan, make by-laws amending, adding to or repealing the by-laws set forth in the Third Schedule or any by-laws made under this subsection." 161 His Honour interpreted that provision to mean: "[T]he body corporate can interfere with the rights of proprietors in respect of their lots only by means of by-laws passed in accordance with the Act. " (emphasis added) 162 His Honour observed that the specific by-laws in the Third Schedule to the Queensland Act did not authorise the making of the agreement and that the body corporate had not exercised the power conferred by s 30(2) to make a by-law giving it power to enter into the management agreement. 163 McHugh J's observation concerning the by-law making power was part of his reasoning and appears to have been endorsed by Deane and Gaudron JJ (at 609). Section 30(2) of the Queensland Act was in substantially the same terms as s 47 of the Management Act upon which the primary judge relied. His Honour did not, with respect, explain why s 30(2) authorised a by-law under which the body corporate could enter an agreement which, inter alia, divested individual proprietors of their rights to let their own premises. It might be inferred, however, that, like Brennan and Toohey JJ, he thought such a by-law would be valid if it was in the common interest of all proprietors in the strata scheme. 164 Humphries is important for two reasons. First, it emphasises the necessity to have recourse to contextual considerations to determine the ambit of general words such as "for the purpose of the control, management, administration, use or enjoyment of the lots and common property the subject of the plan". Secondly, it underlines the proposition that to the extent by-laws can affect the rights of individual proprietors, it is because the by-law is presumed to operate for the benefit of the strata scheme as a whole. McHugh J's comment that "the body corporate can interfere with the rights of proprietors in respect of their lots only by means of by-laws passed in accordance with the Act" said no more than the Management Act itself. At the end of the day it is still necessary to determine the ambit of the power in s 47 to make by-laws which entrench on the rights of individual proprietors. 165 The other case on which the respondents rely, Sydney Diagnostic Services Pty Ltd v Hamlena Pty Ltd also illustrates the proposition that by-laws which operate for the benefit of the strata scheme as a whole are authorised. 166 Sydney Diagnostic concerned the by-law power in s 58(2) of the 1973 Act. The building covered by the strata plan was a medical centre. The body corporate purported to pass a by law which confined the conduct of the medical practice of pathology to two lots (5 and 6) in the strata plan. The respondent, which carried on the business of pathology on lot 35 contended the by-law was invalid because s 58(2) of the 1973 Act did not permit a discriminatory by-law. 167 In holding that the by-law was valid, Meagher JA (with whom Mahoney and Priestley JJA agreed) said (at 11, 434): "…[T]he words of the section do bear their prima facie meaning. Since plurals include singulars, Parliament must have intended bodies corporate to have power to pass by laws regulating 'the use' of each lot in a strata plan, and it must have been apparent to Parliament when arming bodies corporate with this power that it extended to regulating what trades, avocations and activities could and could not be conducted on each lot. This is particularly so when it is remembered that the Act was passed at a time when it was not uncommon for business and commercial buildings to be built with a view to different avocations being practised in different lots." 168 Sydney Diagnostic supports the proposition that in a commercial strata scheme, by-laws can be passed which requires one lot to be used by its proprietor in a particular way to ensure a "mix" of uses regarded as appropriate by the necessary majority of members of the owners' corporation. Such a by-law would be expressly authorised now by the power in s 43 to make by-laws appropriate to the type of strata scheme concerned. Meagher JA reached his conclusion by giving the words "for the purpose of …the use of a lot" their literal meaning. However he also had regard to the historical context in which the by-law making power was adopted, a context in which buildings were constructed for special purposes, and by-laws ensuring that the right "mix" was maintained operated for the benefit of the strata scheme as a whole. 169 By-law 20 does not operate for the benefit of the strata scheme as a whole. It operates only for the benefit of the respondents, to the detriment of the appellant. Sydney Diagnostic does not, in my opinion, support the conclusion that by-law 20 is valid. 170 In my opinion by-law 20 is inconsistent with the Management Act and, accordingly, has no force and effect: s 43(4). Anthony Hordern 171 The conclusion that by-law 20 is invalid is sufficient to dispose of the appeal. However while I agree with Santow JA that the Anthony Hordern submission should be rejected, I do so for different reasons. 172 In Anthony Hordern (at 7), Gavan Duffy CJ and Dixon J (as his Honour then was) formulated the core principle that: "When the Legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised and the conditions and restrictions which must be observed, it excludes the operation of general expressions in the same instrument which might otherwise have been relied upon for the same power." 173 That principle, as explained by Gummow and Hayne JJ in Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50; (2006) 81 ALJR 1 (at [54]) is based on the notion: "…that affirmative words appointing or limiting an order or form of things may have also a negative force and forbid the doing of the thing otherwise." 174 The Anthony Hordern principle is a manifestation of the maxim expressum facit cessare tacitum (when there is express mention of certain things, then anything not mentioned is excluded: Nystrom (at [54])). In Wilcox, Judge of the Federal Court, Re; Ex parte Venture Industries Pty Ltd (1996) 66 FCR 511 (at 64) the Full Federal Court (Black CJ, Cooper and Merkel JJ) said the maxim was usually applied to reconcile or read down by implication a general power which was inconsistent with a specific power in the same instrument or enactment and had little, if any, applicability to powers expressly conferred in separate enactments, even, apparently, if they were part of the same legislative scheme. It has been said that there appears to be no reason for this qualification: Pearce & Geddes, Statutory Interpretation in Australia 6th ed at 4.31. 175 As Gummow and Hayne JJ demonstrated in Nystrom (at [56] - [59]) in their analysis of the post-Anthony Hordern cases, the question whether the maxim applies turns on the construction of the provisions in question. After reviewing the authorities their Honours said (footnotes omitted): "[59] Anthony Hordern and the subsequent authorities have employed different terms to identify the relevant general principle of construction. These have included whether the two powers are the 'same power', or are with respect to the same subject-matter, or whether the general power encroaches upon the subject-matter exhaustively governed by the special power. However, what the cases reveal is that it must be possible to say that the statute in question confers only one power to take the relevant action, necessitating the confinement of the generality of another apparently applicable power by reference to the restrictions in the former powe r. In all the cases considered above, the ambit of the restricted power was ostensibly wholly within the ambit of a power which itself was not expressly subject to restrictions." (emphasis added)

[112]

"The exact significance of this fourth and last condition is, at first sight perhaps, not entirely clear. As between the original parties to the 'grant' it is not in doubt that rights of this kind would be capable of taking effect by way of contract or licence. But for the purposes of the present case, as the arguments made clear, the cognate questions involved under this condition are: whether the rights purported to be given are expressed in terms of too wide and vague a character; whether, if and so far as effective, such rights would amount to rights of joint occupation or would substantially deprive the park owners of proprietorship or legal possession ; whether, if and so far as effective, such rights constitute mere rights of recreation, possessing no quality of utility or benefit; and on such grounds cannot qualify as easements." (emphasis added) 179 The requirement that the right conferred by the grant must not amount to exclusive possession of the servient tenement was encapsulated by Lopes LJ in Reilly v Booth (1890) 44 Ch D 12 (at 26) as follows: "The exclusive or unrestricted use of a piece of land, I take it, beyond all question passes the property or ownership in that land, and there is no easement known to the law which gives exclusive and unrestricted use of a piece of land. It is not an easement in such a case; it is property that passes." 180 The same conclusion was reached in Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd [1971] HCA 9; (1971) 124 CLR 73 (at 91) by Windeyer J (with whom Barwick CJ agreed on this point). 181 There is a line of authority holding that the fourth condition is not satisfied where the right claimed is to store goods on another's land. 182 In Copeland v Greenhalf the defendant and his father before him had carried on business as wheelwrights for fifty years or so. Their home and workshop adjoined a road and in part confronted a strip of land on the opposite side of the road, some 150 feet long and of a width varying from fifteen to thirty-five feet, which gave access from the road to an orchard. During the whole of the fifty years the defendant and his father had placed vehicles, wheels, and other articles on the land on the opposite side of the road to await repair or removal after repair. They had also from time to time carried out repairs to vehicles on the land. They had always left a way to permit access to and from the orchard from and to the road. On a claim by the plaintiff, the owner in fee simple of the orchard and the strip of land, for an injunction to restrain the defendant from continuing to place articles on the land, the defendant contended that he was entitled to an easement so to use the land by virtue of the Prescription Act, 1832, s 2. 183 Upjohn J (as his Lordship then was) held (at 812) that the right claimed by the defendant went "wholly outside any normal idea of an easement, that is, a right of the occupier of a dominant tenement over a servient tenement". He continued: " This claim really amounts to a claim to a joint user of the land by the defendant . Practically he is claiming the whole beneficial user of the strip of land on the south-east side of the track so that he can leave there as many or as few lorries as he likes for any time that he likes and enter on it by himself, his servants and agents, to do repair work. In my judgment, that is not a claim which can be established as an easement. It is virtually a claim to possession, if necessary to the exclusion of the owner, or, at any rate, to a joint user , and no authority has been cited to me which would justify me in coming to the conclusion that a right of this wide and undefined nature can be the proper subject-matter of an easement. It seems to me that for this claim to succeed it must really amount to a right of possession by long adverse possession. I say nothing, of course, as to the creation of such rights by grant or by covenant." (emphasis added) 184 Brightman J followed Copeland in Grigsby v Melville and Another [1972] 1 WLR 1355, holding that an easement of unlimited storage within a confined space could not exist in law. It has been said that the major significance of Grigsby is "that it extends the principle of Copeland v Greenhalf beyond prescriptive easements to all easements, however acquired": A J Bradbrook and M A Neave, Easements and Restrictive Covenants in Australia, (Second Edition, Butterworths, 2000, at [1.9]). This comment would appear also to support the authors' observation (ibid) that there is no logical reason why a stricter test should apply to prescriptive easements than those created by express or implied grant: cf Mercantile General Life Reassurance Co v Permanent Trustee (1988) 4 BPR 9534. 185 There are differing views as to whether Copeland is inconsistent with the Court of Appeal's decision in Wright v Macadam [1949] 2 KB 744 in which it was held that a permission given by the landlord of a flat to his tenant to use a coal shed on his property to store such coal as might be required for the domestic purposes of the flat was a right or easement recognised by law. Upjohn J did not refer to Wright. Bradbrook and Neave (at [1.9]) regard the decisions as inconsistent and point out, correctly, that Copeland has been preferred in Australia. Campbell J (as his Honour then was) was not persuaded that there was any inconsistency in Lolakis v Konitsas [2002] NSWSC 889; (2002) 11 BPR 20,499 (at [25]). 186 Bradbrook and Neave's observation that Copeland has been preferred in Australia is based on King J's decision in Harada v Registrar of Titles [1981] VR 743 which concerned the question whether an easement was created by a "notice to treat" in the following terms: "… [to] empower the Commission to enter upon and clear the said land of timber and undergrowth and of any other obstructions and to lay and erect thereon such apparatus and appliances as are required for the purposes of transmitting electricity and will bind the owner not to build on the easement area and not to interfere with the use of the easement or grow trees or erect any structure thereon . The transmission wires will be at the lowest point about 22 feet above the ground." (emphasis added) 187 King J held (at 752) that the fourth condition for the grant of an easement was not present. He said: "… the restriction on the owner not to build on the easement area and not to erect any structure thereon goes much further than a prohibition of interference with the enjoyment by the SEC of its rights. I think that if the rights the subject of the notice to treat were acquired the plaintiff would be left with very few rights over her property and could do little more with it than move over it and park cars on it. I think that the rights sought go far beyond those appropriate to an easement, and that for this reason also the rights sought to be acquired by the SEC do not fall within the category of a common law easement. They would really amount to rights to joint user by the SEC of the plaintiff's land: Copeland v Greenhalf , [1952] 1 Ch 488, at p. 498." (emphasis added) 188 Copeland and Harada were followed in Clos Farming Estates Pty Ltd (Recs and Mgrs Apptd) (ACN 003 435 256) v Easton and Another [2002] NSWCA 389; (2002) 11 BPR 20,605 (at [40], [42], [45] - [46]) (per Santow JA, Mason P and Beazley JA agreeing). Santow JA observed (at [45]) that in order to determine whether the fourth condition has been established, it is necessary to assess the degree to which the rights conferred interfere with the servient owner's exclusive possession of the site. He added (at [46]) that the fact that "the rights conferred only touch part of the lot is insufficient to preclude the finding that the rights so vastly interfere with the servient owners' rights, were they exercised, as to preclude them constituting an easement". 189 The question whether a grant of rights over another's land fails the fourth condition required for an easement is one of fact. In Pennant Hills Golf Club Ltd v Roads and Traffic Authority of New South Wales [1999] NSWCA 110; (1999) 9 BPR 17,011 for example, the respondent was granted the right to use the appellant's land to secure underground rock anchors as part of the construction work for the M2 expressway. The effect of the grant prevented the appellant from making any changes to the design or topography of the golf course which intruded into that part of the land in which the rock anchors were to be embedded. The Court (Stein JA, Handley and Giles JJA agreeing) held (at [20]) that the grant did not "wholly" deprive the appellant of its property rights in the land, nor (at [22]) "purport to vest unlimited or unconstrained rights in the respondent…nor…give it any right of possession beyond that…necessary to house the rock anchors". The Court did not refer to Harada. 190 As I have already said, by-law 20 confers exclusive use and enjoyment of the watercraft storage area on the respondents, leaving the appellant with no right to use that section of lot 2. A by-law which purports to have that effect is not an easement because it purports to confer rights of occupation on the respondents that substantially deprive the appellant of proprietorship. 191 In those circumstances by-law 20 does not satisfy the fourth condition in Re Ellenborough Park.

[116]

In lieu of the orders made by White J: (a) Declare that by-law 20 in strata plan 67662 is made ultra vires and is of no force or effect; (b) Order that the first and second respondents be restrained from storing watercraft on the land comprised in lot 2 of strata plan 67662. (c) Order that the first and second respondents pay the appellant's cost of the proceedings before White J. 195 CAMPBELL JA: The term "by-law" is an ancient expression in English law. Its antiquity can be gauged from the fact that its etymological origin is in the Danish word "by" (sometimes spelt "byr"), meaning a town. Thus, in etymological origin, a by-law is a law applicable only to a local community. 196 Harding, A Social History of English Law (Penguin Books, London, 1966) says that in the 13th century "… the disputes of the peasantry, the bye-laws necessary for fruitful agriculture, the substance of daily life, were still matters for the landlord and were transacted in his manorial court." (p 70) 197 Such by-laws were at one stage customary, and not necessarily written. Stoljar, Groups and Entities (Australian National University Press, Canberra, 1973) records: "Such by-laws (i.e. the laws of a by or tun or township or village) begin to be recorded, though at first only sporadically, when manorial rolls begin in the thirteenth century; and they are recorded often at the express request of the villagers themselves who then declare the by-laws to have been by 'all the tenants', or by 'the community', or 'plebiscitum ville' , thus also indicating their customary independence of the lord, at least as regards their own communal affairs." (p 21) 198 The range of topics covered by by-laws was wide. Stoljar, op cit, page 21, gives as examples: "For example, only those might be allowed to glean who were too young or too old to reap; or neighbours might be forbidden to carry off sheaves as it was difficult to say whether they had come by them "well and truly" or had got them "without leave". Some by-laws even deal with hired labour, specify a maximum wage etc., thus anticipating 'in a remarkable way the Statute of Labourers of 1351' …". 199 Stoljar gives other examples at p 20-21 of a medieval by-law requiring farm produce to be carted only by day and then "openly through the midst of the town and not secretly by back ways", and another by-law that dealt with "a problem posed by an obdurate or unco-operative villager, one who would neither properly work his tenement nor 'do any neighbourliness to his neighbours'." 200 Medieval guilds, when created by royal franchise, made their own by-laws. The by-laws of mediaeval guilds covered, according to Stoljar, op cit, page 26, "… unfair practices such as overcharging, forestalling, including unfair competition among themselves; even to prevent guildsmen from acting as agents for outsiders…". 201 Likewise, when burgesses of towns began to seek royal charters of incorporation in the fifteenth century, the "… right to make by-laws … [was] eagerly sought by those applying for charters …" (Stoljar, op cit, page 33). (See also Harding, op cit, page 249. According to Walker, The Oxford Companion to Law (Oxford University Press, New York, 1980), entry "Bye-law", page 163, "A common-law corporation has implied power to make bye-laws incidental to and within the purposes of its constitution …". 202 Harding, op cit, page 229 sketches how by-laws came to be incorporated into a wider legal fabric: "Statute was neither an independent, nor the earliest, form of legislation. But it came to control the other forms. The powers of rule-making it can now delegate to officials and bodies outside Parliament are the successors to the many independent modes of legislation in medieval England. The bye-laws of the manor, the regulations of the city companies and other corporations, the rules of the Common Law Courts - all these were only slowly brought under the surveillance of Parliament. The judgment of any court made a sort of law, and every considerable medieval baron had a court … This local law-making of medieval England was first brought under the control of the king in his council, as powers to be granted and censored by charter and letters-patent. So, in 1575, for the sake of quiet between the university and city of Oxford, 'places necessary to be ordered always by the order and authority of the Privy Council', the government had certain orders written into 'the common book of the said University and the city'." 203 When statute came to create bodies to carry out particular functions, and delegated powers to them, the pre-existing concept of the by-law was pressed into service. For example, the Companies Clauses Consolidation Act 1845 (Imp) permitted companies regulated by that Act to make by-laws, and made provision in section 127 for the manner of proof of those by-laws. The case law provides examples of by-laws made by railway companies (Motteram v Eastern Counties Railway Company (1859) 7 CB (NS) 58; 141 ER 735), and of by-laws made under the Public Health Act 1875 (Imp) (Andrews v Wirral Rural District Council [1916] 1 KB 863). See also R v Powell (1854) 3 E & B 377; 118 ER 1183; Johnson v Barnes (1873) LR 8 CP 527. 204 It is that ancient notion of a by-law that the New South Wales legislature chose to adopt, without definition or explanation, when first enacting legislation concerning strata titles in 1961: section 13 Conveyancing (Strata Titles) Act 1961. It has appeared in legislation governing strata titles ever since. Such legislation creates a statutory framework within which a type of local community can be created and administered. It is a type of community where co-ownership, and the physical proximity of the spaces that the owners are entitled to occupy, create the opportunity for both cooperation and conflict. It is a type of community that was new in 1961, though it had some analogies with the communities that had previously existed through the creation of home unit companies under the Companies Act, or allowing for individual occupation of apartments in a building through a tenancy in common scheme. 205 There is nothing in the notion of a by-law that, of itself, imposes any kind of limitation on the kind of regulation that might be adopted, beyond that it is for the regulation of the particular community to which it applies. Any limitation on the type of restriction or regulation that can be a by-law must arise from the statute that enables the by-laws to be created, or from the general framework of statute law, common law and equity within which that local community is created and administered. 206 The particular local community that was created under the strata plan in question in the present case involves only two lots of land in separate ownership. However, they are located in a part of Sydney where access to the water is a significant benefit to a lot of land. Nothing in the notion of a by-law prevented there being a by-law entitling the owner of the lot that was located away from the water frontage to store a boat within a defined area immediately adjacent to the waterfront but within the lot located on the water frontage. And, as Santow JA has demonstrated, nothing in the particular legislative framework that governs the strata plan in question detracts from the validity of the by-law that is the subject of this litigation. 207 Subject to one matter, I agree with the reasons of Santow JA, and with the orders he proposes. That one matter concerns whether the rights that by-law 20 conferred upon the respondents' lot could have been validly created as an easement. In my view, it is not necessary to decide that question. Even if those rights could have been validly created as an easement, the reasoning of Santow JA explains why the Anthony Hordern principle would not suffice to make the by-law invalid. And if, as McColl JA has concluded, those rights could not have been created as an easement, no question would arise of inconsistency between section 88B Conveyancing Act 1919 and the provisions governing the creation of by-laws for strata schemes, and that provides a different reason why the Anthony Hordern principle does not have the effect of making the by-law invalid. I would say, however, that the rights conferred by by-law 20 on the owner of lot 1, concerning the watercraft storage area, are extensive, but not as extensive as an exclusive right of possession. The proprietor of lot 2 can still use that area to whatever extent is consistent with the proprietor of lot 1 using it to store a watercraft, at such times as the proprietor of lot 1 might want. 208 There are some additional matters that I should state to explain why I do not, with respect, agree with the reasoning of McColl JA. First, there are some provisions of the Strata Schemes (Freehold Development) Act 1973 that are not set out in either of the other judgments. Section 5 of that Act defines a "strata scheme" as meaning: "(a) the manner of division under this Act, from time to time, of a parcel into lots or into lots and common property and the manner of the allocation under this Act, from time to time, of unit entitlements among the lots, and (b) the rights and obligations, between themselves, of proprietors, other persons having proprietary interests in or occupying the lots and the body corporate, as conferred or imposed by this Act or by anything done under the authority of this Act and as in force from time to time." 209 In spelling out the content of that definition, section 5 defines a "lot" as meaning: "… one or more cubic spaces forming part of the parcel to which a strata scheme relates, the base of each such cubic space being designated as one lot or part of one lot on the floor plan forming part of the strata plan, a strata plan of subdivision or a strata plan of consolidation to which that strata scheme relates, being in each case cubic space the base of whose vertical boundaries is as delineated on a sheet of that floor plan and which has horizontal boundaries as ascertained under subsection (2), but does not include any structural cubic space unless that structural cubic space has boundaries described as prescribed and is described in that floor plan as part of a lot." 210 It defines a "parcel" as meaning: "(a) except as provided in paragraph (b), the land from time to time comprising the lots and common property the subject of a strata scheme, and (b) in relation to a plan lodged for registration as a strata plan, the land comprised in that plan." 211 It defines "common property" as meaning: "… so much of a parcel as from time to time is not comprised in any lot." 212 The effect of these definitions is that, once a strata scheme has been registered, the entirety of the legal rights in the land that has been made subject to the strata scheme are divided into either lots, or common property. 213 The drawings that are part of the strata plan in the present case divide the surface area of the land into two separate areas, lot 1 and lot 2. There is a minuscule amount of common property identified on that plan, comprising a wall that is a party wall between the carport available for use by lot 2, and the house and courtyard erected on lot 1. If one looks just at the drawings on the plan, it looks like the sort of plan that effects a subdivision of land that is not intended to create a strata scheme. The way in which this particular plan is able to create the "cubic spaces" that are essential for the existence of a "lot" in the Strata Schemes (Freehold Development) Act is by a note that provides "Lots 1 & 2 are limited in height and depth to 30m above and below the upper surface of their respective ground floors." The plan makes clear that, at the time of lodgment of the plan, there was already a residence constructed on each of lot 1 and lot 2 - no doubt it would be those residences that fixed the location of the "respective ground floors". In so far as the land that had been made subject to the strata plan conferred rights in the airspace more than 30 m above the upper surface of the ground floors, and in the subterranean space more than 30 m below those floors, those rights would pass, upon registration of the strata plan, into the common property. 214 Thus, from the point of view of the rights likely to be of significance to an ordinary house occupier, this particular subdivision was little different to a subdivision into two freehold parcels on which freestanding houses were constructed. In the way in which it used the strata title legislation to achieve this functional end, it was a distinct oddity, and quite different to the situation with which the strata titles legislation is usually concerned, where the functional objective is to enable separate titles to be created to different parts of the one building. These are, it seems to me, relevant matters in deciding what count as "matters appropriate to the type of strata scheme concerned", within the meaning of section 43 Strata Schemes Management Act 1996. 215 Section 6 Strata Schemes (Freehold Development) provides: "(1) This Act shall be read and construed with the Real Property Act 1900 as if it formed part thereof. (2) The Real Property Act 1900 applies to lots and common property in the same way as it applies to other land except in so far as any provision of that Act is inconsistent with this Act or is incapable of applying to lots or common property." 216 The proprietary right of the registered proprietor in relation to a lot in a strata scheme is, thus, the right set out in section 42 Real Property Act (quoted in the judgment of Santow JA at [**52]). For the reasons given by Santow JA, the limitation that by-law 20 imposes upon what may be done with the appellant's lot operates as either "estates and interests … recorded in that folio" or "entries … recorded in that folio", within the meaning of section 42. Thus, the proprietary right of the appellant in her lot is subject to by-law 20. Further, from the instant of its creation Lot 2 has been subject to by-law 20. To say that by-law 20 permits one lot proprietor to use another proprietor's lot suggests that the by-law infringes proprietary rights - but the proprietary right of the owner of Lot 2 has always been subject to the right created by by-law 20. The by-law is no more an infringement on the proprietary rights of the owner of Lot 2 than is the right of the owner of a dominant tenement to carry out on the land of another rights that have been created by an easement. 217 It is not necessary, in the present case, to decide whether it would be open to an owners corporation to resolve to adopt a by-law like by-law 20 after the creation of the lots in the strata plan. While the trial judge drew some comfort from his view that it would be possible for an owners corporation to pass such a resolution, the rest of his reasoning can stand without that part. 218 I am not prepared to conclude that by-law 20 does not operate for the benefit of the strata scheme as a whole. The strata plan is one that enables two houses and associated facilities to be separately owned on land where formerly only one land title existed. It arranges the land so that both lots can have car parking immediately adjacent to the street, and, through by-law 20, also makes provision for both lots to have boat parking immediately adjacent to the water. In my view, arranging the land use in that way can be seen as being for the benefit of both lots. Including by-law 20 in the strata plan as registered was part of the developer making available to potential purchasers the advantage of both car and boat parking, for a dwelling constructed on a smaller parcel of land. 219 I do not doubt the principle that general words should not be construed in their full generality if there is a context, such as the policy of the Act in which they appear, that is not consistent with giving the words as wide a meaning as they might have outside that context. However, I do not, with respect, find a general policy, in the various pieces of legislation that govern strata titles, that is inconsistent with according to the words "matters appropriate to the type of strata scheme concerned" in section 43(1) a meaning sufficiently wide to permit by-law 20 to be validly enacted. I do not regard the model by-laws as limiting by implication the kinds of topics with which a by-law can validly deal, when section 8(4B) and (4C) Strata Schemes (Freehold Development) Act specifically contemplates that by-laws different or supplementary to the model by-laws might be adopted. In the form they had at the date of registration of this strata plan (11 April 2002) they provided: "(4B) A plan intended to be registered as a strata plan must indicate in the relevant panel of the approved form: (a) that specified model by-laws prescribed by the regulations made under the Strata Schemes Management Act 1996 are proposed to be adopted for the strata scheme and, if those model by-laws contain one or more alternative versions of any by-law, that the specified version of that by-law is proposed to be adopted, or (b) that other specified by-laws are proposed to be adopted for the scheme. (4C) If a strata plan indicates that by-laws other than the model by-laws prescribed by the regulations made under the Strata Schemes Management Act 1996 are proposed to be adopted for the strata scheme, the plan must be accompanied by the by-laws specified. The by-laws must be in the form approved under the Real Property Act 1900 and must be signed by the persons required to sign the strata plan under section 16(1)." 220 As mentioned earlier, I agree with the orders proposed by Santow JA. ********** 1

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