The Owners-Strata Plan 64282 v Patelis [2011] NSWSC 222

Supreme Court New South Wales

Medium Neutral Citation: The Owners-Strata Plan 64282 v Patelis [2011] NSWSC 222 Hearing dates: 22 March 2011 Decision date: 22 March 2011 Before: Rein J Decision: The plaintiff is entitled to an injunction precluding the defendant from taking any further steps to complete the sale of the unit pending further order of the Court Catchwords: INTERIM RELIEF - injunction - where the defendant has undertaken significant building works to a unit in a strata plan without the consent of the Owners Corporation - where the Owners Corporation has issued a notice of breach of by-laws - where the defendant has sold the unit to a third party purchaser - where the transfer has been lodged at the Land Titles Office but not yet registered - whether the Owners Corporation is entitled to an interim injunction to preclude the defendant from taking further steps to complete the sale of the unit pending further order of the Court - discretion to exercise the Court's jurisdiction, laches, utility and the adequacy of damages considered in the context of an interlocutory injunction Category: Interlocutory applications Parties: The Owners - Strata Plan 64282 (plaintiff) Panos Patelis (defendant) Representation: Counsel: M R Pesman (plaintiff) F C Corsaro SC (defendant) Solicitors: Turnbull Bowles Lawyers Pty Ltd (plaintiff) Koffels Pty Ltd (defendant) File Number(s): SC 2011/86368

EX TEMPORE Judgment 1These proceedings concern a block of units in Alexandria, Sydney. The Owners Corporation for the block, the Owners Corporation for Strata Plan No. 64282 ( "the Owners Corporation" ), discovered in November last year that Unit C1 in Strata Plan No. 64282 ( "the Unit" ), which is owned by the defendant, has been turned by the defendant from being a three bedroom unit with two bathrooms into a five bedroom unit with four bathrooms and a laundry. 2The Executive Committee of the Owners Corporation ( "the Executive Committee" ), on learning of these changes, raised the matter with the defendant. The defendant claimed that the works were "BCA approved" and certified by a building consultant, and he undertook to provide the Executive Committee with the documents but he has not done so (see paragraphs 12-13 of the affidavit of Ms Emily Doherty sworn 16 March 2011). I infer that he did not do so because he had no such documentation. It is conceded by Mr F C Corsaro SC of counsel, who appears today for the defendant, that the work was done without the consent of the Owners Corporation or the council or any other authority. 3In November last year, the Owners Corporation or the Executive Committee also became aware that the defendant was marketing the Unit. 4The Owners Corporation issued a notice to the defendant and there were notices issued by the Community Association for Deposited Plan 270238 ("the Community Association" ) to a similar effect in relation to the works (see Exhibit B). The first document in Exhibit B is the notice issued by the Owners Corporation and it notes that the Owners Corporation believes that the defendant has broken By-Law 2.5 by: "carrying out an extensive amount of renovations/alterations to lot 1 without the approval of the Owners Corporation or the Community Association. These renovations/alterations include, but are not limited to damage/alterations to common property walls and flooring and tiling, installation of 3 additional bathrooms, installation of 2 additional bedrooms, and extensive electrical and plumbing works within and on common property ceilings and floors." This notice went on to say: "The Owners Corporation requires you to stop breaking this by-law and to obey this by-law in the future. If you fail to comply with this notice the Owners Corporation may apply to the Consumer Trader and Tenancy Tribunal for a fine of up to $550 to be imposed on you." 5That notice was issued on 15 December 2010. There was an issue ventilated as to whether the notice is sufficiently clear in that it does not expressly state that the defendant is to remove the works that he had previously installed, but the Owners Corporation contends that it is obvious that the offending works had to be removed. 6Following the issue of the notice to which I have referred in [4], because the Unit had been removed from a particular website on which it had previously been advertised, the Executive Committee thought that the defendant had withdrawn the Unit from sale following his receipt of the notice from the Owners Corporation. However, on or around 7 March 2011, the Executive Committee became aware that the Unit was still being marketed as there was an enquiry from a potential purchaser. 7On 17 March 2011, the Owners Corporation sought an order for short service of the summons and affidavits and this matter was made returnable today. On the return of the summons today, Mr M R Pesman of counsel appeared for the plaintiff, as he did last week. As mentioned, Mr Corsaro appeared today for the defendant. 8It appears that the defendant entered into a contract for sale of the Unit on 17 March 2011, unbeknown to the Owners Corporation, and that settlement of that sale took place yesterday, on 21 March 2011 (see the affidavit of Mr Brett Crowley sworn 22 March 2011). A transfer in relation to the Unit has been lodged with the Land Titles Office. 9Given the events of the last few days of which the plaintiff has now become aware, the plaintiff has sought interim relief of a different kind today from that which it originally contemplated seeking. It seeks an order that the defendant be precluded from taking any further steps to complete the sale of the Unit pending further order of the Court. 10The Court was informed that the plaintiff's solicitor had undertaken a search this morning and that as at around 11am this morning the transfer had not yet been registered in the Land Titles Office. 11The defendant resists the granting of interim relief on a number of bases, which were the subject of helpful submissions from Mr Corsaro in writing and also developed orally. In essence, the points are these: (1)It is too late for the plaintiff to obtain any relief against the defendant as the Unit has been sold. The relief which the Owners Corporation seeks in the summons and interim relief, it is said, is all related to obtaining what can be no longer effective as against the defendant since he no longer owns the Unit. Thus the interim relief is not tied to any relief that the plaintiff could obtain against the defendant. (2)The Owners Corporation has been guilty of delay and/or acquiescence in relation to what can be called inaccurately the "renovations". (3)This Court, although it has jurisdiction to deal with breaches of by-laws, ought not do so as a matter of discretion since the question of breaches and orders are appropriate for determination in the Consumer, Trader and Tenancy Tribunal ( "the Tribunal" ) which is where this matter, it was submitted, ought to have been lodged by the Owners Corporation. (4)It would be difficult for this case to succeed on the basis of trespass, which is part of the way in which the summons frames the matter. (5)The Owners Corporation, having known about the breaches in November 2010 and that the defendant was marketing the Unit, has taken no action in this Court until last week. 12Mr Corsaro accepted that there was a serious question to be tried concerning the breach of the by-laws and accepted that the use of cavity space below the floor of the defendant's unit and above the ceiling in the defendant's unit involved use of common property, although he sought to describe this as minimal. 13I am not satisfied on the evidence that the Owners Corporation has been guilty of laches or delay or acquiescence which would deny entitlement to relief. The Executive Committee spoke to the defendant soon after discovery of the works and issued notice and then believed that the defendant had ceased to market the Unit. 14On the question of it being too late for the plaintiff to obtain relief against the defendant, Mr Pesman conceded that it may turn out to be too late but as things presently stand it is not clear that it is too late and that his client's position will worsen or potentially may worsen if the purchaser becomes the registered proprietor at the Land Titles Office. Therefore it is not a case where it has been shown, he submitted, that the relief sought would be of no utility. I accept Mr Pesman's submission. 15I think that it is at least arguable that the Owners Corporation's position as against the defendant can be maintained whilst he remains the registered proprietor and I think that this makes the matter one of urgency. 16Whether the defendant's conduct is properly characterised as a trespass is not likely to be a significant matter, having regard to the seemingly clear breach of the by-laws and use of common property. 17There is another aspect to this which is that at the moment there is simply no information available as to whether the purchaser was informed of the notices issued by the Owners Corporation and the Community Association. It is a distinct possibility, it seems to me, that the purchaser may not wish to proceed with the purchase if he or she was not informed about these matters and now becomes aware of them. I think that the purchaser should be joined in these proceedings or at least given notice and I will hear submissions from the parties on what is the appropriate course in that regard. 18As I have indicated, Mr Corsaro did accept that this Court has jurisdiction. He drew my attention to several cases in which the jurisdiction has not been exercised by the Court but I think that it is certainly arguable that the Court ought to deal with this matter and at the moment it is not appropriate to determine whether that should or should not be so. I think that once the purchaser is joined or he or she does not wish to be involved in the proceedings and the position is known, it may be possible to revisit the question of whether or not the matter should be remitted, if that is possible, to the Tribunal. However, at this stage, I think it is appropriate that it is in this Court. The breaches of the by-laws are at least potentially significant and because of the urgent relief sought today it is a matter of which at the moment it is appropriate for this Court to be seized. 19Mr Corsaro also argued that this is a case in which damages would be an adequate remedy in relation to what the plaintiff seeks, leaving aside the issue of whether or not the defendant is the appropriate defendant to the proceedings. In my view, this is a case in which it not only is arguable that a mandatory injunction requiring removal of the works carried out by the defendant is appropriate, but it seems to be a strong case for such relief rather than one in which the breaches of the by-laws can be salved by an award of damages. 20For these reasons, I gave the interlocutory relief sought by the plaintiff and with the consent of the parties I deferred the giving of these reasons to allow for the morning tea adjournment. I should note, however, that when I granted the relief, I did not formally note what had been said by Mr Pesman and which I took into account, namely, that the usual undertaking as to damages was proffered by the plaintiff through its counsel. That undertaking will now be noted on the record. 21I direct that by 4pm this afternoon, the defendant's solicitor is to advise the plaintiff's solicitor of the name and address of the solicitors who have acted for the purchaser on the sale of the Unit. 22The plaintiff is to serve notice of the proceedings, the orders made and the fact the matter will be listed next week on the purchaser by service on the purchaser at his or her address and also by service on the purchaser's solicitor whose name will be given to the plaintiff's solicitor this afternoon. 23I will list the matter before the Registrar next Tuesday 29 March.