The Owners - Strata Plan No. 4983 v Canny

1. [1]

   McCOLL JA: I agree with Payne JA’s reasons and the orders his Honour proposes. I also agree with Emmett AJA’s reasons.

2. [2]

   PAYNE JA: This appeal concerns a 15-storey apartment building in Elizabeth Bay known as Elizabeth Bay Gardens. More particularly, it concerns the rights of non-resident owners (non-residents) to use parking lots on the lower ground, ground, and upper ground floors of the building. The issue arises because on 2 December 2014, the appellant/cross respondent, the lot owners of Strata Plan No. 4983 (Owners Corporation), purported to pass “Special By-Law No. 7 – Use of Car Spaces” (SBL7) at its annual general meeting intending to restrict the use of the parking lots at Elizabeth Bay Gardens to resident owners.

3. [3]

   Non-resident lot owners commenced proceedings in the Equity Division seeking declaratory relief, in particular, a declaration that SBL7 was invalid and of no legal force and effect. On 2 March 2018, Rein J acceded to that application. His Honour declared that SBL7 was invalid and of no legal force and effect and made additional declarations and orders, that Sydney City Council, by granting its approval of the registration of Strata Plan No. 4983 showing 87 car parking lots each as separate lots in the strata plan, thereby approved the grant to each registered proprietor for the time being of the car parking lots of a separate right of occupation and thus of use as a parking space in respect of each of the parking lots contained in Strata Plan No. 4983: Julian Edward Canny v The Owners-Strata Plan No 4983 [2018] NSWSC 80.

4. [4]

   By notice of appeal filed on 3 April 2018, the Owners Corporation appeals pursuant to s 101 of the Supreme Court Act 1970 (NSW) against the whole of Rein J’s orders. The Owners Corporation contends that the Strata Approval was not and could not be construed as a consent under either s 76A of the Environmental Planning and Assessment Act 1979 (NSW) or cl 29 of the County of Cumberland Planning Scheme Ordinance.

5. [5]

   The non-residents cross appeal against the primary judge’s finding that the Development Consent issued by the Council contained a condition restricting the use to which non-visitor parking lots in Elizabeth Bay Gardens could be put to the parking of cars owned by residents of the residential lots in the development.

Background

1. [6]

   Elizabeth Bay Gardens was the subject of a Development Application to Sydney City Council (the “Council”) on 29 March 1968. On 10 February 1969, the Council issued a Development Consent under the now-repealed Local Government Act 1919 (NSW) and the County of Cumberland Planning Scheme Ordinance, a scheme introduced by the Local Government (Amendment) Act 1951 (NSW). The building was completed in 1970. On 6 October 1970, strata subdivision approval was granted by the Council.

2. [7]

   The Development Consent contained a description of the Development Application, which itself included the following information about parking at the property:

3. [8]

   On 29 October 1970, Strata Plan No. 4983 was registered by the Registrar-General as a strata plan comprised of 165 lots, 87 of which were “parking lots” (fewer than the originally planned 104 “free parking” spaces), and 78 were “residential lots”.

4. [9]

   From 1970 until 2014, parking lots were bought, sold and used by parking lot owners, some of whom were residents of Elizabeth Bay Gardens and some were not. The appellant, the Owners Corporation of Strata Plan No. 4983, was aware throughout that period that some of the parking lots had been purchased by non-residents. The Owners Corporation levied non-resident parking lot owners for strata levies and those levies were paid. The respondents originally relied upon a pleaded estoppel but for reasons which are unclear this claim was abandoned before the case was heard by the primary judge.

5. [10]

   In 1970, the price of a parking lot in Elizabeth Bay Gardens was $1,500. The value of a parking lot substantially increased over time. For example, in 2006, two lots were purchased by Mr Canny for $130,000. In 2014, a parking lot sold for between $200,000 and $220,000.

6. [11]

   In December 2014, the Owners Corporation passed a resolution creating a new by-law, SBL7. It repealed the existing Special By-Law 7, passed on 22 November 2007. The new by-law SBL7 was in the following terms:

7. [12]

   The letter from the Council dated 12 September 2012 referred to in SBL7 is a letter from Mr Zabell, a planner with the Council, to the solicitors for the appellant, about a proposal to subdivide and sell a car space belonging to a person who was not a resident of Elizabeth Bay Gardens. Mr Zabell said “[t]he parking spaces within the building should only be used by occupants of that building and not by someone who resides elsewhere”. Mr Zabell concluded by opining that “Council is unlikely to support any application to strata subdivide the car space.” It was accepted by the appellant that this letter had no legal effect.

8. [13]

   Prior to SBL7, the only by-law relating to parking was the original, 2007 Special By-Law 7 which required parking lot owners to offer parking lots to “occupiers of the lots in the strata scheme” before leasing or licensing to anyone else. This was purportedly repealed at the time that SBL7 was introduced.

9. [14]

   After the passage of SBL7, the Owners Corporation took steps designed to enforce SBL7, including installing a security access point and issuing new security swipe cards to residential lot owners, and attempting to preclude non-residential owners of parking lots from using the swimming pool and accessing some common areas.

10. [15]

    At no time prior to 2014 did the Owners Corporation tell any non-resident parking lot owners that there was any impediment to them using the parking lots to park their cars.

Primary judgment

1. [16]

   The parties agreed that the County of Cumberland Planning Scheme Ordinance, attached to the Local Government (Amendment) Act, was the relevant source of legislative requirements and restrictions at the time that Elizabeth Bay Gardens was developed.

2. [17]

   It was also common ground that any use permitted by the Development Consent in 1969 was continued by later planning schemes pursuant to ss 76A and 76B of the Environmental Planning and Assessment Act 1979 (NSW) (now renumbered as ss 4.2 and 4.3).

3. [18]

   The relevant sections of the County of Cumberland Planning Scheme Ordinance were in the following terms:

4. [19]

   The Table to clause 26 of the Ordinance provides that “residential buildings” can be erected or used “only with the consent of the responsible authority”. “Residential building” means a building other than a dwelling house (i.e. a single house) designed for human habitation together with such outbuildings as are ordinarily used therewith.

5. [20]

   The primary judge found that, to build Elizabeth Bay Gardens and use it as a residential building, the developers were required to obtain consent and the use which was permitted was that of a “residential building”.

6. [21]

   The primary judge framed the case as raising three issues. The first issue was whether the Development Consent, by its terms, permitted use of the allocated parking spaces by non-residents. The crucial phrase in the Development Consent was “with provision for the free parking of one hundred and four (104) cars by the occupants of the proposed building on the lower ground, ground and upper ground floors and fifteen (15) cars by visitors at the rear of the site”. The primary judge held that this phrase should be construed as a “requirement” that the developer make available 104 parking spaces for residents of Elizabeth Bay Gardens who were the “occupants” referred to in the Development Consent, although his Honour accepted that this was not a condition of the Development Consent. It followed that non-resident owners of parking lots were not permitted to use the lots for parking by the Development Consent. The appellant thus succeeded on this issue.

7. [22]

   The second issue addressed by the primary judge was whether the approval by the Council of the plan of subdivision for Elizabeth Bay Gardens, which contained both residential lots and parking lots, thereby permitted the use of the parking lots by owners of those lots, whether or not they also were residents of Elizabeth Bay Gardens. The Conveyancing (Strata Titles) Act 1961 (NSW) permitted the subdivision of land into lots by registration of a strata plan (s 3) with accompanying certificates (s 4). A Certificate of Compliance under s 317A of the Local Government Act was issued on 20 August 1970, and the Strata Plan of Subdivision application was approved by resolution of the Council on 6 October 1970.

8. [23]

   The primary judge held that, by approving a subdivision of a building which created 87 strata lots for the parking of cars, Council must be taken to have approved, thereby, the occupation of those lots for parking. By virtue of the Certificate under s 4 of the Conveyancing (Strata Titles) Act and by force of s 3 of the Conveyancing (Strata Titles) Act, Council’s approval entailed separate occupation of those lots by their owners. His Honour held that Council “must have necessarily intended to resile from, or revoke, the requirement [in the Development Consent] that car spaces created could only be used by residents of Elizabeth Bay Gardens …”. The respondents succeeded on this issue, however, in oral submissions in this Court Mr Coles QC, who appeared with Mr Evans for the respondents, made clear that the respondents did not seek to support the decision of the primary judge on this basis.

9. [24]

   Finally, the primary judge found that SBL7 was “clearly introduced to preclude non-resident owners from parking their cars in their parking lots”. The primary judge also found that SBL7 was deficient in form in that it did not make clear what the parking lot owners could or could not do or make clear that the Council had indicated that it did not propose to take any action in respect of any asserted breach of the Development Consent relating to parking by non-residents. His Honour held that SBL7 should be set aside, regardless of the outcome of the other issues before him.

Notice of appeal

1. [25]

   The notice of appeal contained 11 grounds:

Notice of contention

1. [26]

   Three grounds were raised in the notice of contention dated 17 April 2018:

Notice of cross-appeal

1. [27]

   The respondents cross-appealed on 25 June 2018 on five grounds:

Appellant’s submissions

1. [28]

   The appellant submitted that unless there is lawful entitlement to use the car parking spaces, their use is illegal. Under the Development Consent, only occupants of residential units within Elizabeth Bay Gardens can lawfully use the car spaces. The respondents are not occupants of the residential units within Elizabeth Bay Gardens. Therefore, the current use of the car spaces by the respondents is unlawful.

2. [29]

   The appellant focussed its appeal on the “consent ground” (ground 1) and the “discretion ground” (ground 11). The appellant submitted that the Strata Approval was not and could not be construed as a “consent” under either the Environmental Planning and Assessment Act or the Ordinance, as the Strata Approval was concerned with subdivision, not use. The appellant submitted that grounds 2-6 lead to the same conclusion.

3. [30]

   The appellant submitted that ground 10 is made out once the Court finds that the consent grounds are made out, and ground 11 provides a necessary degree of latitude for the respondents to accommodate an orderly return to the lawful state of affairs.

4. [31]

   With regards to the consent ground, the appellant submitted that the primary judge failed to pose the correct question in the judgment and should have examined whether or not the Strata Approval was a “consent”. The appellant submitted that the Strata Approval could never be considered as a “consent” for use. The appellant further submitted that, once the conclusion that the Strata Approval is not a “consent” is reached, SBL7 is “plainly valid and unexceptional”.

5. [32]

   With regards to the discretion ground, the appellant submitted that the Court should exercise its discretion to enforce the prohibition upon an unauthorised use: North Sydney Municipal Council v Sydney Serviced Apartments Pty Ltd (1988) 66 LGRA 373 per Bignold J. The appellant further submitted that SBL7 was a legitimate means by which the appellant has drawn the Development Consent to the attention of all lot owners. The appellant, however, submitted that if an injunction were granted it should be stayed for 5 years properly to balance the requirements of the respondents with the requirement that the appellant uphold the law.

Respondents’ submissions

1. [33]

   With regards to the Development Consent, the respondents submitted that there is a clear textual distinction between the “use” of the building as residential apartments on the 1st to 15th floors and the “provision for” parking by “the occupants of the proposed building”. The respondents submitted that the Development Consent does not create a “necessary condition” that parking lots must be owned or used by occupants of the building. The Council must ensure “consents are framed in clear terms and conditions are specified with certainty”, and the consequences of any lack of certainty must be borne by the Council: Ryde Municipal Council v Royal Ryde Homes (1970) 19 LGRA 321; [1970] 1 NSWR 277 per Else-Mitchell J at [29].

2. [34]

   With regards to SBL7, the respondents submitted that the primary judge correctly concluded that SBL7 is deficient in form and invalid.

3. [35]

   In their written submissions, the respondents submitted that the Strata Approval “displaced” the provisions of the Development Consent by separately authorising the strata plan. The Strata Approval made no reference to parking spaces, nor imposed any condition(s) in relation to parking. They argued that the primary judge was correct to reject the appellant’s contention that s 4.2 of the Environmental Planning and Assessment Act (formerly s 76A) applied, because there was no basis to say that the construction of Elizabeth Bay Gardens had not been carried out in accordance with the Development Consent and any applicable environmental instrument.

4. [36]

   The respondents also submitted that, under s 42(1) of the Real Property Act 1900 (NSW), a registered proprietor’s interest in land recorded in the folio is “absolutely free from all other estates and interests that are not so recorded”. The respondents submitted that s 42(3) of the Real Property Act provides that the section prevails over any inconsistent provision of any other Act or law. The respondents concluded that, if the Development Consent created a right in rem that restricted their use and enjoyment of their own parcels of land (the parking lots), such a right is not recorded and could be disregarded by the registered proprietor: Hillpalm Pty Ltd v Heaven’s Door Pty Ltd (2004) 220 CLR 472; [2004] HCA 59 per McHugh A-CJ, Hayne and Heydon JJ at [53].

Consideration

1. [37]

   No point was raised by either party about the jurisdiction of the Supreme Court to determine this case, although the respondents were plainly alive to the possibility of jurisdictional limits. It will be recalled that ground 5 of the notice of cross appeal provided:

2. [38]

   The legislative requirements governing this dispute were agreed by the parties to be the County of Cumberland Planning Scheme Ordinance introduced into the now-repealed Local Government Act by the Local Government (Amendment) Act and two sections of the Environmental Planning and Assessment Act. Any use permitted as at 1969/1970 was preserved by later planning schemes and ss 76A and 76B of the Environmental Planning and Assessment Act.

3. [39]

   The Environmental Planning and Assessment Act was renumbered by the Environmental Planning and Assessment Amendment Act 2017 (NSW). Sections 76A and 76B are now numbered ss 4.2 and 4.3, respectively but are substantively identical, save for the maximum penalty for breach. Section 4.2 provides, relevantly:

4. [40]

   Section 9.45 (which is identical to former s 123, the relevant section at the time these proceedings were commenced in the Supreme Court) governs contraventions, or threatened contraventions, of the Environmental Planning and Assessment Act. That section provides:

5. [41]

   “Court” is defined in the Environmental Planning and Assessment Act as the Land and Environment Court: s 4. The particulars of the amended cross-claim and defence clarify that this matter concerns, in substantial part, an alleged contravention of former ss 76A and 76B of the Environmental Planning and Assessment Act (current ss 4.2 and 4.3). By operation of that Act, these proceedings fall under s 9.45. The primary judge referred to s 123 when considering the issue of injunctive relief, which appears to be the only reference by the parties below to that part of the Environmental Planning and Assessment Act.

6. [42]

   The primary judge found that there was no breach of former ss 76A or 76B of the Environmental Planning and Assessment Act, as “breach” in s 9.45 refers to, per s 9.44 (identical to former s 122):

7. [43]

   Section 71 of the Land and Environment Court Act 1979 (NSW) provides that:

8. [44]

   Section 58 involves appeals from determinations of the Land and Environment Court, and is thus not relevant for present purposes.

9. [45]

   Section 20(1)(e) refers to proceedings in s 20(2) of the Land and Environment Court Act. The section provides:

10. [46]

    This section only deals with Class 4 jurisdiction of the Land and Environment Court. In its original cross-claim, an injunction was sought by the appellant before the primary judge and in this Court to remedy or restrain a breach of the Environmental Planning and Assessment Act.

11. [47]

    That relief, together with other substantial parts of the present proceeding, as framed, would appear to fall within the Land and Environment Court's Class 4 jurisdiction as Class 4 includes jurisdiction to hear proceedings under (former) s 123 of the Environmental Planning and Assessment Act, now s 9.45. In Minister for Local Government v Blue Mountains City Council [2018] NSWCA 133; (2018) 229 LGERA 197 Leeming JA (Bathurst CJ and McColl JA agreeing) held:

12. [48]

    With regards to whether the Land and Environment Court’s jurisdiction over Class 4 matters was exclusive, Leeming JA (Bathurst CJ and McColl JA agreeing) held that:

13. [49]

    There is much to be said for the proposition that this case, at its core, should properly have been brought within the exclusive Class 4 jurisdiction of the Land and Environment Court as seeking either an injunction or a declaration of right concerning the proper construction of the Development Consent under s 20(2) of the Land and Environment Court Act.

14. [50]

    I have concluded, however, that the Supreme Court had jurisdiction in this case to make orders and that this Court has jurisdiction to hear an appeal from those orders. This is because the pleadings identified the construction and operation of the Conveyancing (Strata Titles) Act and the Real Property Act as issues to be determined. Those issues were within the jurisdiction of the Supreme Court. There was also the issue of the correct construction and operation of SBL7 (the relevant by-law), although I note that s 150 of the Strata Schemes Management Act 2015 (NSW) identifies the question of the validity of a Strata by-law as a matter for NSW Civil and Administrative Tribunal. The relief sought by the respondents in relation to the giving effect by the appellant to that by-law was a matter within the jurisdiction of the Supreme Court.

15. [51]

    I will return to the central issue of whether this Court has jurisdiction to make orders about the correct meaning of the Development Consent when I come to consider relief.

16. [52]

    In oral submissions the cases of both parties contracted significantly. At the end of those addresses the only real issue between the parties was the correct construction of the Development Consent.

17. [53]

    The respondents succeeded before the primary judge on the basis of his Honour’s finding that by approving a subdivision of a building which created 87 lots for the parking of cars, Council must be taken to have approved, thereby, the occupation of those lots for parking. By virtue of the Certificate under s 4 of the Conveyancing (Strata Titles) Act and by force of s 3 of the Conveyancing (Strata Titles) Act, Council’s approval entailed separate occupation of those lots by owners of those lots and thus Council “must have necessarily intended to resile from, or revoke, the requirement [in the Development Consent] that car spaces created could only be used by residents of Elizabeth Bay Gardens.”

18. [54]

    As I have said, in oral submissions in this Court, Mr Coles QC accepted that the subsequent approval by the Council of the strata scheme under the Conveyancing (Strata Titles) Act could not affect the correct construction of the Development Consent.

19. [55]

    There were lengthy written submissions made by the respondents about indefeasibility of title. It was submitted that the indefeasibility of title to the “parking lots” was inconsistent with there being any restriction on their use provided by the Development Consent. That proposition, that the absence of notification of any restriction on use derived from a Development Consent in the Certificate of Title was inconsistent with indefeasibility of title, was rejected by the majority in Hillpalm. As McHugh A-CJ, Hayne and Heydon JJ said:

20. [56]

    Again, Mr Coles QC did not rely on indefeasibility in his oral address and accepted that the references in the cross-appeal to indefeasibility were “an unnecessary distraction”.

21. [57]

    The issues to be determined were further narrowed by counsel for the appellant, Mr Ashhurst SC, who accepted that that the Council had not imposed any conditions about parking in the Development Consent. That is, parking by non-residents at Elizabeth Bay Gardens was not alleged to be a prohibited use. Mr Ashhurst SC also accepted that any prohibition upon use of the parking spaces as a “car park” was no longer a relevant issue in these proceedings.

22. [58]

    The only question thus before the Court on appeal, other than the breadth of the relief, if any, to be granted, was the question of the correct construction of the Development Consent and whether parking by non-residents of Elizabeth Bay Gardens in parking lots owned by them at Elizabeth Bay Gardens was a permitted use.

23. [59]

    No challenge was made to the description of the relevant principles guiding the construction of the Development Consent described by the primary judge, which were essentially derived from Bunderra Holdings Pty Ltd v Pasminco Cockle Creek Smelter Pty Ltd (subject to Deed of Company Arrangement) (2017) 96 NSWLR 434; [2017] NSWCA 263. They should briefly be re-stated.

24. [60]

    First, the nature and extent of the approved development must be determined by construing the document of approval, including any plans or other documents which it incorporates, aided only by that evidence admissible in relation to construction which establishes, or helps to establish, the true meaning of the document as the unilateral act of the relevant authority, not the result of a bilateral transaction between the applicant and the Council. Thus evidence of the nature of the site would always be admissible for this purpose, as would be, in appropriate cases, evidence as to the meaning of the marks on plans, or indeed, the meaning of the absence of particular marks: Parramatta City Council v Shell Co of Australia Ltd [1972] 2 NSWLR 632 at 637 per Hope JA;

25. [61]

    Secondly, a development consent is to be construed according to its terms, having regard to its enduring nature. A development consent has an enduring nature because it is not personal to the applicant but is a public document operating for the benefit of third parties such as subsequent owners, occupiers and security holders, and in some respects is equivalent to a document of title: House of Peace Pty Ltd v Bankstown City Council (2000) 48 NSWLR 498; [2000] NSWCA 44 per Mason P at [23]; Winn v Director-General of National Parks and Wildlife [2001] NSWCA 17; (2001) 130 LGERA 508 per Spigelman CJ at [4].

26. [62]

    Thirdly, the enduring nature of a development consent encourages a fair but liberal reading of the rights it confers upon a landowner who may spend considerable money acting upon it and who is likely to wish to sell the land sooner or later: House of Peace per Mason P at [41].

27. [63]

    Fourthly, a development consent is to be construed not as a document drafted with legal expertise, but to achieve practical results: Westfield Management Limited v Perpetual Trustee Company Limited [2006] NSWCA 245 per Hodgson JA at [36]; Baulkham Hills Shire Council v Ko-veda Holiday Park Estate Ltd (2009) 167 LGERA 395; [2009] NSWCA 160, per Tobias JA at [105].

28. [64]

    Fifthly, as a general rule, a development consent, being a public document operating for the benefit of third parties, should be construed without reference to extrinsic evidence other than to identify a thing or place referred to in it. That extrinsic evidence is not led to vary the consent but to identify a thing or place referred to in it. Evidence as to the nature or physical features of the land may also be admissible for that purpose, at least those features observable by a third party at the time of the consent: Allandale Blue Metal Pty Ltd v Roads and Maritime Services (2013) 195 LGERA 182; [2013] NSWCA 103 per Meagher JA at [44]; Parramatta City Council v Shell Co of Australia at 637.

29. [65]

    As Meagher JA explained in Allandale Blue Metal the relevant principles concerning the construction of a development consent are more easily stated than applied.

30. [66]

    The relevant planning instrument was the County of Cumberland Planning Scheme Ordinance, cll 26, 27, 28 and 29 of which provided:

31. [67]

    The following matters bear emphasis. A building shall not without the consent of the responsible authority be erected or used in any zone for any purpose shown opposite that zone in the fourth column of the Table to clause 26. The relevant building type here is “Residential building” which was defined in clause 24 as, “‘Residential building’ means a building other than a dwelling house, designed for human habitation together with such outbuildings as are ordinarily used therewith, a residential flat building, a hostel, an hotel designed primarily for residential purposes and a residential club, but does not include any building mentioned, whether by inclusion or exclusion in the definitions of ‘places of instruction’ or ‘institution’”.

32. [68]

    The 1969 Development Consent in full provided:

33. [69]

    This was the consent described in cll 27 and 41 of the County of Cumberland Planning Scheme Ordinance:

34. [70]

    An important observation in the present context was made in Ryde Municipal Council v Royal Ryde Homes by Else-Mitchell J, that:

35. [71]

    What must be discerned is the true meaning of the consent as the unilateral act of the Council, not the result of a bilateral transaction between the appellant and the Council. It is for that reason that development consents are required to be framed in clear terms and any relevant conditions specified with certainty. I agree with Else-Mitchell J that any lack of clarity or certainty is the responsibility of the Council and it must take the consequences of any failure to specify accurately or in detail what is consented to.

36. [72]

    In the present case the Council is not a party to the proceedings. I infer from the correspondence in evidence that the Council is aware of the dispute between these parties but so far as the evidence reveals has done nothing to assert any entitlement for relief against the respondents for engaging in a use of the building it considered to be contrary to the Development Consent. The absence of the Council from the proceedings perhaps explains the absence of attention given to jurisdictional issues.

37. [73]

    There is no doubt that this Development Consent fails to specify accurately or in detail what precisely the Council has consented to. The language of the Development Consent poses a difficulty. At first blush, it may be doubted that the Development Consent actually gives consent for any particular use of the building as distinct from giving consent to the erection of the building. This is because of the language to “erect on the abovementioned land a building”. The focus of that language is on the permission to build rather than on any subsequent use.

38. [74]

    I have concluded, however, that this is not the better view of the Development Consent. It will be recalled that it was common ground that parking per se was a permitted use. The relevant requirement for consent, found in the Column IV of Table to the Local Government (Amendment) Act is headed “Purposes for which buildings may be erected or used only with the consent of the responsible authority”. The relevant requirement was for a “Residential building” which means, relevantly, a residential flat building. In the opening sentence of the Development Consent, “the Council, as the Responsible Authority, hereby grants its consent to the undermentioned application”, the Council grants consent to the use described in the proposal. This is a sufficiently broad description of the use of the building by “occupants” for the purposes of parking described in the Development Consent.

39. [75]

    The critical matter where I depart from the primary judge is that I do not regard the Development Consent as involving any “requirement for use”. In 1969 when the Development Consent was granted it was clear that the Council had a “wide power of imposing conditions as to off street parking when granting a development consent”: Baulkham Hills Shire Council v Mekol Pty Ltd (No 2) (1970) 20 LGERA 165; [1970] 3 NSWR 206 per Hardie J (affirmed on jurisdictional grounds but not addressing this point in this Court in [1971] 2 NSWLR 54). It is common ground that no such conditions were imposed here.

40. [76]

    I do not agree that the Development Consent should be construed by asking the question posed by the primary judge whether it was likely that the Council would act in “requiring the developer to provide parking for people who were not residents of the building” as his Honour found at [40]. Plainly enough, there was no such requirement. I regard the Development Consent merely as providing permission for use within its terms.

41. [77]

    The critical question is who the Development Consent contemplates as being the “occupants” the relevant subject of the Development Consent. There is no doubt that Elizabeth Bay Gardens was a “residential flat building” and that I have found that the Development Consent permitted the use of 104 parking spaces by “occupants”. It does not automatically follow that the Development Consent provides use rights to those 104 parking spaces only to residents of the building.

42. [78]

    In a different context, s 313 of the Local Government Act 1919 (NSW), Hardie J held in Mekol (No 2) that when s 313(j) authorised the imposition of a condition requiring provision or space for vehicles “likely to be used by the occupants of such building”, the section referred to vehicles likely to be used by legal occupiers, whether owners or tenants, and also “those persons who work in the subject premises so long as their presence has some element of regularity and continuity and permanence.”

43. [79]

    In Elidock Pty Ltd v N B Stone & Associates Pty Ltd [2008] NSWSC 1278 Young CJ in Eq, after referring to a number of cases drawn from different contexts, concluded that “a person who has the right to occupy and a person who has the right to reside are not necessarily the same.” I respectfully agree.

44. [80]

    The necessary fair but liberal reading of the use rights granted by the Development Consent leads me to conclude that the description of “free parking of one hundred and four (104) cars by the occupants of the proposed building on the lower ground, ground and upper ground floors and fifteen (15) cars by visitors at the rear of the site” should be understood as a permission by the Council for use of the building by “occupants”, being legal occupiers, who are not necessarily “residents”.

45. [81]

    An important textual indication in favour of this construction is that the Development Consent refers to “occupants” of the building, rather than occupants of the residential floors. I do not accept the appellant’s submission that this textual reading involves any circularity. It only does so when the assumption is made that “occupants” within the meaning of the Development Consent means “residents”. The permission to use granted by the Development Consent to “occupants” is wide enough to encompass the respondents as owners of strata lots in the building. I do not think that the respondents’ reference to “occupant” in Division 4 of Part 11 of the Local Government Act takes the matter any further. As Mr Ashhurst pointed out, the reference was contained in a part of the Act dealing with building approvals rather than development consents.

46. [82]

    In my view, the permission to use Elizabeth Bay Gardens extends to any person properly described as an “occupant” of Elizabeth Bay Gardens. An “occupant” of Elizabeth Bay Gardens includes, at least, each of the present respondents as owners of strata parking lots. The respondents are “occupants” of Elizabeth Bay Gardens in that their presence in Elizabeth Bay Gardens as an owner of a parking lot has the element of regularity, continuity and permanence described by Hardie J, albeit in a different context, in Mekol (No 2). The appellant’s concession that the respondents are not using the parking spaces as a “car park” is significant. Obviously, if the respondents were using the parking spaces as a “car park” this would constitute a prohibited use. The lack of clarity in the Development Consent about the identity of “occupants” permitted to use the car spaces should be resolved in favour of the respondents. I have also had the opportunity of reading the decision of Emmett AJA in draft. I agree with his Honour’s additional reasons.

47. [83]

    For the foregoing reasons I have concluded that the correct construction of the Development Consent is that it provides permission for use of the property for car parking by the respondents, who as owners of the strata lots are properly described as “occupants” within the meaning of the Development Consent.

48. [84]

    The basis upon which the respondents succeeded below, however, cannot be supported. On 1 March 2018, the primary judge made separate but relevantly identical orders in respect of the respondents’ claim below and the appellant’s cross-claim. The appeal must succeed, in part, and order 2 made in each of the sets of orders made on 1 March 2018 must be set aside. Order 3 made by the primary judge in each case is plainly linked to order 2 and must also be set aside.

49. [85]

    I am not persuaded that it is necessary to set aside any other orders made by the primary judge on 1 March 2018. Orders 1 and 4 concern SBL7. On one view, all that SBL7 requires is compliance with the law. The evidence accepted by the primary judge, however, makes it plain that SBL7 has been interpreted by the appellant as permitting it to prevent parking lot owners from accessing and using parking lots owned by the respondents. That is based on an incorrect understanding of the Development Consent. SBL7 also suffers from the formal defects identified by the primary judge. It is thus not appropriate to set orders 1 and 4 aside.

50. [86]

    As to orders 6 and 7, which concern costs, although the primary judge erred in making orders 2 and 3, his overall conclusion that the appellant’s case should fail was correct. No sufficient reason has been shown by the appellant to disturb the orders made below in relation to costs.

51. [87]

    There remains a question about whether a declaration of the kind sought by the respondents in the notice of cross-appeal should be made. As is no doubt apparent from the discussion of the jurisdiction of the Supreme Court at [36]-[50] above, I have significant doubts about whether the Supreme Court has jurisdiction to grant declaratory relief about the meaning of the Development Consent. Those jurisdictional doubts are amplified by the absence of the Council as a party to these proceedings. It may be that if an order was made under ss 149A-149E of the Civil Procedure Act (2005) (NSW) that jurisdictional difficulty could be overcome. If I had determined that a declaration should otherwise be made it would be necessary for the parties to be heard further on jurisdiction.

52. [88]

    I have concluded, however, that even if the Supreme Court has jurisdiction to make a declaration about the correct construction of the Development Consent such an order should not in the exercise of discretion be made here. No sufficient basis has been shown to make such a declaration in circumstances where the Court has found that the respondents, as registered proprietors of lots in Strata Plan No. 4983, are properly described as “occupants” within the meaning of the Development Consent and have existing use rights to park their cars at Elizabeth Bay Gardens. No evidence suggests that the appellant will not abide by the construction given to the Development Consent by this Court. It follows that the cross-appeal should be dismissed.

53. [89]

    As to the costs in this Court, whilst the appellant succeeded in having certain orders made by the primary judge set aside, these proceedings have been driven from the beginning by a view taken by the appellant of the meaning of the Development Consent which I have found to be incorrect. In substance, this appeal was only brought because of a view taken by the appellant about the meaning of the Development Consent which was wrong. The cross-appeal was only necessary because of the same incorrect view of the Development Consent taken by the appellant.

54. [90]

    When Senior Counsel for the appellant was asked why these proceedings were being brought in this Court, having regard to the appellant being prepared to allow the non-residents five years to apply to the council to vary the use for which they could use their car parking spaces, the following exchange occurred:

55. [91]

    Following the decision of the primary judge, it was clear that the appellant could not reasonably have continued to harbour either of those concerns. In the light of the orders made by the primary judge it could not be said in the event of injury in the car park that the appellant had allowed any “unlawful use to go ahead”. It could also not be said that the appellant was “allowing any of [the] lots to be used for unlawful purposes”.

56. [92]

    As the appellant has failed on the principal issue which made this appeal and cross-appeal necessary, it is appropriate that the appellant pay the respondent’s costs of the appeal and the cross-appeal. Such costs should, in accordance with s 90 of the Strata Schemes Management Act 2015 (NSW) only be levied on lots owned by resident lot owners of the appellant.

57. [93]

    The orders I propose are:

    1. (1)

       Appeal allowed in part;

    2. (2)

       Set aside orders 2 and 3 made by the primary judge on 1 March 2018, in respect of the respondents’ claim below;

    3. (3)

       Set aside orders 2 and 3 made by the primary judge on 1 March 2018, in respect of the appellant’s cross-claim;

    4. (4)

       Notice of appeal otherwise dismissed;

    5. (5)

       Notice of cross-appeal dismissed;

    6. (6)

       Order that the appellant pay the respondents the costs of the appeal and the cross-appeal as agreed or assessed and that such costs be paid from a levy raised from the owners of lots in Strata Plan No. 4983 other than the respondents or any of them.

58. [94]

    EMMETT AJA: This appeal and cross appeal concern the entitlement of the owners of car parking spaces in an apartment building in Elizabeth Bay (the Building) to use the spaces for the purposes of parking cars. That question turns on the proper construction of development consent given by the Council of the City of Sydney (the Council) for the erection of the Building and the effect of the approval given by the Council for the registration of a strata plan in respect of the Building.

59. [95]

    By application dated 29 March 1968 made to the Council, architects acting on behalf of the owner of land situated in Onslow Avenue, Elizabeth Bay, applied for development permission in relation to a proposed building described as “Block of Home Units with Parking Facilities”. The application stated that off-street parking facilities for 123 cars were proposed and stated that the proposed use of the premises was “RESIDENTIAL”. A minute paper prepared by the City Surveyor on 14 January 1969 described the proposed development, relevantly, as follows:

60. [96]

    On 28 January 1969, the Council resolved to grant its consent to the application, subject to certain conditions.

61. [97]

    By instrument dated 10 February 1969 (the Development Consent), the Council, as the responsible authority under the Local Government Act 1919 (NSW) (the Local Government Act) and for the County of Cumberland Planning Scheme, granted its consent to the application subject to conditions for visitors’ cars that are not presently relevant. A note at the foot of the Development Consent stated that the consent related to the County of Cumberland Planning Scheme Ordinance only and that any other statutory consent necessary under the Local Government Act or any other Act must be obtained from the appropriate authority. In particular, the Development Consent stated that “the plans of any proposed building work, alterations, etc., must be approved by the City Building Surveyor”.

62. [98]

    By application dated 26 February 1969, the owner of the land requested the approval of the Council to the erection of a building described as a “reinforced concrete flat slab construction and cavity walls.” The application described the proposed building as having three storeys of parking and 15 storeys of residential. The proposed use and occupancy was stated as “three floors of parking” for the basement and “home units” for the ground floor and upper floors. On 8 April 1969, the City Building Surveyor wrote to the owner’s architect saying that the plans and specifications submitted in connection with that application had been approved subject to several conditions that are not presently relevant.

63. [99]

    The Building was erected, apparently in accordance with the plans and specifications, and, on 6 October 1970, the Council approved Strata Plan 4983 in respect of the Building. Strata Plan 4983 provided for 165 lots, of which 75 lots related to residential apartments. The remaining lots related to car parking spaces, save for three lots which carried a greater unit entitlement than the car parking lots. Strata Plan 4983 was registered on 29 October 1970.

64. [100]

    Quite a number of persons who purchased residential lots also purchased parking lots. However, not all of the parking lots were acquired by the owners of residential lots. From 1970 until 2014, parking lots were used by parking lot owners, whether residents of the building or not. Parking lots were bought and sold separately from residential lots. For example, in 1970, a parking lot was sold for $1,500. In 2006, two lots were purchased for a price of $130,000 and in 2014, a parking lot was sold for a price between $200,000 and $220,000.

65. [101]

    On 2 December 2014, the appellant, Owners’ Corporation in respect of Strata plan 4983 (the Owners Corporation), voted to adopt Special By-law No 7 (By-law No 7). After reciting that the owner or occupier for the time being of a lot in Strata plan 4983 would be required to comply with all laws applicable to the owner or occupier’s car space, including the Development Consent, By-law No 7 stated that an owner or occupier must ensure:

    1. (1)

       that a relevant car space is not used for any purpose that is prohibited by law,

    2. (2)

       that the owner or occupier complies with the Development Consent as it relates to the use of the car space, and

    3. (3)

       that any person who occupies or rents the car space complies with the Development Consent to the extent that it relates to the use of the car space.

66. [102]

    The owners of parking lots who are not also owners of residential lots in the building (the Parking Lot Owners) commenced proceedings in the Equity Division seeking, relevantly, a declaration that By-Law No 7 is invalid. The Owners’ Corporation filed a cross claim seeking a declaration that the Parking Lot Owners have contravened and are in breach of a condition of the Development Consent and a declaration that they have contravened and are in breach of By-Law No 7. The Owners’ Corporation also sought an order restraining the Parking Lot Owners from using, or allowing to be used, any car space lot or lots in a manner or for a purpose that contravenes By-Law No 7.

67. [103]

    On 1 March 2018, for reasons given on 2 February 2018, a judge of the Equity Division (the primary judge) concluded that the Development Consent did not permit the use of the parking space lots by non-residents but that, by granting its approval to the registration of Strata Plan 4983 showing 87 car parking lots, each as separate lots, the Council approved the grant to each registered proprietor for the time being of a car parking lot of a separate right of occupation and thus of use as a parking space in respect of each of the parking lots contained in Strata Plan 4983. The primary judge declared that the Parking Lot Owners have a right to park motor vehicles in their respective parking lots and to have all necessary rights of access and egress from their respective parking lots both for vehicles and persons.

68. [104]

    By notice of appeal filed on 3 April 2018, the Owners’ Corporation appeal from the orders made by the primary judge. By notice of contention filed on 17 April 2018, the Parking Lot Owners seek to support the conclusion reached by his Honour on the basis that his Honour erred in finding that the Development Consent did not permit the use of the parking space lots by non-residents. The respondents have quite rightly conceded that the subsequent approval by the Council of Strata Plan 4983 under the Conveyancing (Strata Titles) Act 1961 (NSW) (the Conveyancing (Strata Titles) Act) could not constitute approval for the use of the Building. The creation of separate lots in a strata scheme pursuant to the Conveyancing (Strata Titles) Act has nothing to do with the use of such lots once they are created. However, that is not the end of the matter.

69. [105]

    The Development Consent of 10 February 1969 was “to erect … a building … for use as … flats … with provision for the free parking of … cars by the occupants of the proposed building.” That language can reasonably be construed as describing the building for the erection of which consent was being given. It does not, in terms, say anything about the use of the building once constructed. That is to say, the Development Consent is for the erection of the Building, which includes provision for the free parking of cars. It is implicit in the instrument that the consent extends to the use of the Building. There is no express restriction on the use of the “provision” for parking and none should be implied.

70. [106]

    I have had the advantage of reading a draft of the proposed reasons of Payne JA. I agree with Payne JA, for the reasons proposed by his Honour, that the correct construction of the Development Consent is that it provides permission for use of the Building for car parking by the Parking Lot Owners, who as owners of the strata lots are properly described as “occupants” within the meaning of the Development Consent. I agree that the orders proposed by him are appropriate in the circumstances.