Deves & Deves v Dickson & Ors [1994] QCA 217

IN THE COURT OF APPEAL [1994] QCA 217 SUPREME COURT OF QUEENSLAND Appeal No. 243 of 1993 Before Fitzgerald P. Pincus JA. Demack J. [Deves v. Dickson] BETWEEN: SEDERICK GEORGE DEVES and LYNLEY EVELYN DEVES Appellants AND: GRANT DICKSON, SCOTT PHILP HARRIS, DAVID WEBSTER WHISTLER, VIOLET ANNIE GEE, BACTMET PTY. LTD., PETER EDWARD MALLINSON, WAYNE KEVIN RORDAN, SARAH JANE RORDAN, KATHLEEN CHENERY, MR & MRS EARMELL, JOHN EDWARD STEVENSON, PETA ANNE STEVENSON, GAIL PATRICIA LITTLE, GARY WILLIAM BAILEY, DIAN RUTH McGOVERN, BRIAN PETER MOORE, DORIS LORNA MOORE, CAROL HUSON, DENISE HURCUM, B. METCALFE, SHERYL LEGETT, DEREK SAMUEL BECKER, JOHN LAWRENCE McFADDEN, RONALD FIDLER, ELLEN FIDLER, SAMUAL HENDRY, JANET MONTGOMERY HENDRY, DEBORAH COMPTON, GRAHAM GRIFFITHS, STEPHEN RICHARD BELLAMY, PATRICIA M. COUNTY, SANDRA JOY SIMMONS, JAMES McSAVANEY, MARGARET McSAVANEY, INGA BOERNER, BEATRICE ALICE TALBOT, SHEILA ANNE BARKER, ISABEL JOHNSON, BRENDA F. RUFFELL. Respondents REASONS FOR JUDGMENT - THE PRESIDENT Judgment delivered 17/06/94 I have had the advantage of reading the respective judgments of Pincus JA. and Demack J.. There is no purpose in my reciting the circumstances which give rise to this appeal or the rival contentions and submissions of the parties. There is a single, narrow point for decision, about which there is ample scope for divergent views. It is necessary for me to choose between the available alternatives, which I do without any particular conviction one way or the other. -- 1 of 18 -- In my opinion, the wider construction favoured by Demack J. is to be preferred. I am influenced by the structure of the critical clause in the easement, especially the implication to be drawn from the words "without limiting the generality of the foregoing" followed by the reference to "outgoings". To my mind, this suggests that the "cost of the upkeep and maintenance of the Servient Tenement" is not limited to the appellants' "outgoings" but extends also to any other cost to the appellants. In context, this can only mean the cost to them of the time and labour which they have themselves expended. The appeal should therefore be allowed with costs to be taxed. In these circumstances, the respondent did not submit that the orders sought in the notice of appeal should not be made and I would accordingly make those orders. -- 2 of 18 -- IN THE COURT OF APPEAL SUPREME COURT OF QUEENSLAND Appeal No. 243 of 1993. Brisbane [Deves v. Dickson] Before Fitzgerald P. Pincus J.A. Demack J. BETWEEN: SEDERICK GEORGE DEVES and LYNLEY EVELYN DEVES (Appellants) AND: GRANT DICKSON & ORS. (Respondents) REASONS FOR JUDGMENT - PINCUS J.A. Judgment delivered 17/06/1994 I have had the advantage of reading the reasons for judgment of Demack J which contain a full explanation of the facts of the case and the issue to be determined. The question is whether the obligation placed on each of the respondents to contribute 1/52 of the cost of the upkeep and maintenance of the servient tenement, contained in cl. 1 of each of the easements in question, obliges each of them to pay 1/52 of the value of the labour expended by the appellants in that activity. It is true that the word "cost" can include the value of labour for which no payment has been made; there are even wider senses of the word, in such expressions as "His success in his profession cost him his health". -- 3 of 18 -- But in the present context, it appears to me likely that the parties intended, by the word "cost", to refer to the expenditure of money, not that of labour. I think that the fair value of work which has been done is not ordinarily described as the "cost" of the work, nor does the language used suggest, in my respectful opinion, that the parties contemplated that the amount to be paid was to be measured by reference to the effort and trouble expended in the upkeep and maintenance of the relevant property. That effort and trouble might be considerable, but the result negligible. Further, the notion of contributing to the cost of upkeep and maintenance does not, in my view, bring to mind a process under which (by some unspecified means) a commercial value will be attributed to work done for which no payment has been made. It is true that even if "cost" is read as excluding the value of labour which has not been paid for, the obligation to contribute is limited by a criterion of reasonableness; so there may be disputes about the extent of the obligation to contribute to cost, where the appellants ask only for reimbursement of money paid. But such disputes would have a different nature and scope from those likely to arise where the parties have to try to agree on a fair price for labour expended by the proprietors. Counsel for the appellants conceded in effect that, on the appellants' interpretation, even if all the physical work was done by paid gardeners, the appellants would be entitled to be paid for the "cost" of arranging the gardeners' employment and telling them what to do; that appears to me -- 4 of 18 -- to be an odd result. It is my view that the clause in question bears the appearance of creating a simple obligation to reimburse the proprietor of the servient tenement for expenses incurred in upkeep and maintenance; I think different language would have been chosen had the parties intended the broader, more complex, obligation argued for by the appellants. I would, therefore, dismiss the appeal with costs. -- 5 of 18 -- IN THE COURT OF APPEAL SUPREME COURT OF QUEENSLAND C.A. No. 243 of 1993 Brisbane [Deves & Anor v. Dickson & Ors] BETWEEN: SEDERICK GEORGE DEVES and LYNLEY EVELYN DEVES (Appellants) AND: GRANT DICKSON, SCOTT PHILIP HARRIS, DAVID WEBSTER WHISTLER, VIOLET ANNIE GEE, BACTMET PTY LTD, PETER EDWARD and SUSAN MALLINSON, WAYNE KEVIN and SARAH JANE RORDON, KATHLEEN CHENERY, MR AND MRS EARNELL, JOHN EDWARD and PETA ANNE STEVENSON, GAIL PATRICIA LITTLE, GARY WILLIAM BAILEY, DAIN RUTH McGOVERN, BRIAN PETER and DORIS LORNA MOORE, CAROL HUSON, DENISE HURCUM, B METCALFE, SHERYL LEGGETT, DEREK SAMUEL BECKER, JOHN LAWRENCE McFADDEN, RONALD and ELLEN FIDLER, SAMUAL and JANET-MONTGOMERY HENDRY, DEBORAH COMPTON, GRAHAM GRIFFITHS, STEPHEN RICHARD BELLAMY, PATRICIA M COUNTY, SANDRA JOY SIMMONS, JAMES and MARGARET McSAVANEY, INGA BOERNER, BEATRICE ALICE TALBOT, SHELIA ANNE BARKER, ISABEL JOHNSON, BRENDA F RUFFELL (Respondents) The President Mr Justice Pincus Mr Justice Demack -- 6 of 18 -- Judgment delivered 17/06/1994 Separate reasons for judgment of the President, Pincus J.A. and Demack J. The President and Demack J. concurring as to the orders made, Pincus J.A. dissenting. APPEAL ALLOWED. DECLARATIONS MADE BY THE CHAMBER JUDGE SET ASIDE. DECLARE THAT UPON THE TRUE CONSTRUCTION OF CERTAIN REGISTERED EASEMENTS OVER LAND DESCRIBED AS LOT 4 ON RP 181802, COUNTY OF WARD, PARISH OF GILSTON, THE EXPRESSION "THE COST OF THE UPKEEP AND MAINTENANCE OF THE SERVIENT TENEMENT" IN CL. 1 OF EACH OF THE SAID EASEMENTS, MEANS THE REASONABLE COST OF THE UPKEEP AND MAINTENANCE OF THE SERVIENT TENEMENT WITH SUCH REASONABLENESS BEING DETERMINED BY REFERENCE TO THE PREVAILING OPEN MARKET COST OF UPKEEPING AND MAINTAINING THE SERVIENT TENEMENT FROM TIME TO TIME WHEN SUCH COST FALLS TO BE DETERMINED, AND INCLUDING THE COST OF THE TIME EXPENDED, AND THE WORK AND LABOUR PERFORMED BY THE REGISTERED PROPRIETORS OF THE SERVIENT TENEMENT THEMSELVES. ORDER THAT THE RESPONDENTS PAY THE APPELLANTS COSTS OF THE APPLICATION BEFORE THE CHAMBER JUDGE AND THE COSTS OF THIS APPEAL. CATCHWORDS: HOME AND COMMERCIAL UNITS - common property owned in fee simple by unit manager - right to use common property given by registered easement - obligation on unit owners to contribute to cost of upkeep and maintenance - whether "cost" includes time and effort of managers Counsel: D Boughen for the Appellant A Morris QC and R Derrington for the Respondents Solicitors: Kinneally Teys for the Appellant Michael J Smith for the Respondents Hearing date: 30 May 1994 -- 7 of 18 -- IN THE COURT OF APPEAL SUPREME COURT OF QUEENSLAND Appeal No. 243 of 1993 Before the Court of Appeal The President Mr Justice Pincus Mr Justice Demack [Deves & Anor v. Dickson & Ors] BETWEEN: SEDERICK GEORGE DEVES and LYNLEY EVELYN DEVES (Appellants) AND: GRANT DICKSON, SCOTT PHILIP HARRIS, DAVID WEBSTER WHISTLER, VIOLET ANNIE GEE, BACTMET PTY LTD, PETER EDWARD and SUSAN MALLINSON, WAYNE KEVIN and SARAH JANE RORDON, KATHLEEN CHENERY, MR AND MRS EARNELL, JOHN EDWARD and PETA ANNE STEVENSON, GAIL PATRICIA LITTLE, GARY WILLIAM BAILEY, DAIN RUTH McGOVERN, BRIAN PETER and DORIS LORNA MOORE, CAROL HUSON, DENISE HURCUM, B METCALFE, SHERYL LEGGETT, DEREK SAMUEL BECKER, JOHN LAWRENCE McFADDEN, RONALD and ELLEN FIDLER, SAMUAL and JANET-MONTGOMERY HENDRY, DEBORAH COMPTON, GRAHAM GRIFFITHS, STEPHEN RICHARD BELLAMY, PATRICIA M COUNTY, SANDRA JOY SIMMONS, JAMES and MARGARET McSAVANEY, INGA BOERNER, BEATRICE ALICE TALBOT, SHELIA ANNE BARKER, ISABEL JOHNSON, BRENDA F RUFFELL (Respondents) -- 8 of 18 -- 2 JUDGMENT - DEMACK J Judgment delivered 17/06/1994 This appeal concerns the meaning of the word "cost" in registered easements granted to the registered proprietors of units ("unit owners") in Palm Grove Village. Although the unit owners are registered proprietors of parcels of land described in a Registered Building Units Plan, the land which could be regarded as common property is owned in fee simple by Mr and Mrs Deves. It is described as Lot 4. The easements give the unit owners access to public roads, and to the "recreational facilities" on Lot 4. This unusual arrangement has led to considerable litigation. Until 28 March 1988, mr and Mrs Deves had been employed by the Body Corporate of Palm Grove Village as managers of the village. On 15 December 1988, Carter J held that the management agreement had been terminated by the Body Corporate on 28 March 1988. Subsequently Mr and Mrs Deves claimed that the unit owners were required to pay for the work done by them in respect of the upkeep and maintenance of the facilities on Lot 4. A number of plaints were filed in the Magistrates Court at Southport. Forty individuals and one corporation then joined in an application to the Supreme Court seeking declarations about the true construction of the registered easement. Each of these applicants was a unit owner. The declarations sought were: -- 9 of 18 -- 3 "1. A declaration that, on the true construction of certain registered easements over land described as Lot 4 on RP 181802, County of Ward, Parish of Gilston which are described in the schedule hereto, in clause 1 of each of the said easements, which provides 'The Grantee shall in any event contribute 1/52 of the cost of the upkeep and maintenance of the Servient Tenement and, without limiting the generality of the foregoing, 1/52 of all rates and taxes (including land tax) and other outgoings with respect to the Servient Tenement. Land Tax shall be calculated on the basis that the registered proprietor for the time being of the Servient Tenement owned no land other than his interest in the Servient Tenement. Such contributions shall be made to the registered proprietor for the time being of the Servient Tenement upon demand.' (a) The expression 'the cost of the upkeep and maintenance of the Servient Tenement' means the reasonable cost of the upkeep and maintenance of the Servient Tenement actually incurred with such reasonableness being determined by reference to the prevailing open market cost of upkeeping and maintaining the Servient Tenement from time to time when such cost falls to be determined; (b) The expression 'the cost of the upkeep and maintenance of the Servient Tenement' does not include the cost of the time expended nor the work and labour performed by the registered proprietors of the Servient Tenement by themselves. 2. The declaration that on the true construction of the certain registered easements over land described as Lot 4 on RP 181802, County of Ward, Parish of Gilston, which are described in the schedule thereto the registered proprietors of the Servient Tenements from time to time under the respective easements: (a) Are not obliged to pay in respect of 'the cost of upkeep and maintenance of the Servient Tenement' any more than the stated portion of the reasonable cost of the upkeep and maintenance of the Servient Tenement actually incurred with -- 10 of 18 -- 4 such reasonableness being determined by reference to the prevailing open market cost of upkeeping and maintaining the Servient Tenement from time to time when such cost falls to be determined. (b) Are not obliged to pay in respect of the 'cost of upkeep and maintenance of the Servient Tenement' the cost of the time expended nor the work and labour performed by the registered proprietors of the Servient Tenement by themselves. 3. A declaration that on the true construction of the certain registered easements over land described as Lot 4 on RP 181802, County of Ward, Parish of Gilston, which are described in the schedule hereto, the 'cost of the upkeep and maintenance of the Servient Tenement' is presently between the sums of approximately ELEVEN THOUSAND FIVE HUNDRED DOLLARS ($11,500.00) per annum AND TWELVE THOUSAND FIVE HUNDRED DOLLARS ($12,500.00) per annum." The learned Chamber Judge ruled that, in the expression, "the cost of the upkeep and maintenance of the Servient Tenement" used in cl. 1 of the registered easements, the word "cost" referred to expenditure by, or perhaps, liability incurred by Mr and Mrs Deves. Mr and Mrs Deves have appealed, and submit that the word "cost" includes the cost of the time expended and the work and labour performed by them. At the hearing before the Chamber Judge there was no dispute that the applicants were entitled to declarations in terms of paras. 1(a) and 2 (a) of the summons. In other words, Mr and Mrs Deves did not claim that they could sustain unreasonable charges for the work they performed themselves. In the affidavit sworn in support of the applicants' contentions on the construction summons, Mr Dickson said: -- 11 of 18 -- 5 "The Applicants are quite prepared to contribute to the cost of the upkeep and maintenance of the servient tenement, Lot 4, in accordance with their registered agreement, however it is our submission that the Respondents should not be entitled to charge the amounts that they are presently charging in respect of labour having regard to the quotations obtained by the Applicants and further that many of the extra outlays which are incurred by the Respondents in providing the maintenance and upkeep are outlays which are included in the cost of having a commercial businessman provide those services as deposed to in the other Affidavit material file don behalf of the Applicants. They include the hiring of trailer,s chainsaws, and the taking off the site of garden rubbish." It might be thought that this amounted to a statement that the applicants, who are the respondents to this appeal, were prepared to pay reasonable charges for the labour of Mr and Mrs Deves. However, on the hearing of this appeal, the respondents agreed to uphold the decision of the Chamber Judge. As the troublesome phrase appears in a registered instrument its meaning should be found within the instrument itself. The learned Chamber Judge said that he was fortified in his conclusion by bearing in mind that originally the easement fell for construction in terms of the contemporaneous management agreement. Under that agreement Mr and Mrs Deves were to supervise specified maintenance activities or personally to carry out the activities. There are two reasons why the management agreement should not be considered, even to fortify an opinion about the proper construction of the disputed phrase. Fir, the management agreement was entered into after -- 12 of 18 -- 6 some of the easements had been granted. It would produce an anomalous result if the management agreement could be regarded as a collateral agreement used to explain ambiguous terms in some easements, but not in respect of the same terms in similar easements in respect of the same servient tenement. Secondly, the management agreement was made with the Body Corporate, whereas the easements are granted personally to the individual registered proprietors of the units. There has bee sufficient confusion in respect of the rights and duties of the various registered proprietors, without compounding the situation by treating the unregistered and terminated management agreement and the registered easements as a kind of package of rights. Naturally enough, counsel sought to find guidance in the cases, but could not find any decision that assisted either contention. There is a sentence in the judgment of Harman J in Literland Urban District Council v. Liverpool Corporation (1958) 2 All E.R. 489 at p. 492: "There is a formal sense of the word 'cost' which involves no expenditure: it is the cost of something done." upon which Mr Boughen, for the appellants, relied. However, Mr Morris QC, for the respondents, correctly stated that this was no more than an observation in the course of the reasons for judgment. Counsel referred to the definition of "cost" in the Shorter Oxford English Dictionary: "1. that which must be given in order to acquire, produce or effect something -- 13 of 18 -- 7 2. the price paid for a thing 3. (in transferred or figurative use) expenditure of time labour etc." Mr Morris QC attached significance to the fact that the meaning contended for by the appellants was not the primary one given. The Oxford Dictionary adds some further bases for dispute by giving two sub-definitions to the primary definition, each of which is said to be obsolete: "(b) outlays, expenditure, expense, (c) (plural) expenses, charges." The examples given in the Oxford Dictionary from the writings of two economists show that the value of labour expended may be included in the cost of a commodity - Adam Smith (1776) and Rogers (1886). What is clearly established is that the word "cost" is used to cover a great number of circumstances and activities which, for a particular purpose, must be expressed in money terms. Clearly, the meaning in any particular case must depend upon the context in which the word is used. The Transfer of Easement in question is said to be for "access and recreational purposes". These purposes are more fully defined in the recitals which include: "... to go, return, pass and repass over and through the servient tenement for the purpose of: (i) Obtaining access to and from any public roads contiguous to the Servient Tenement. (ii) For recreational purposes and for all purposes connected with the use and enjoyment of the Dominant Tenement (iii) Using such recreational facilities as may be constructed on the Servient Tenement -- 14 of 18 -- 8 from time to time PROVIDED HOWEVER that it shall be a condition precedent to such used by the Grantee that the Grantee shall contribute 1/52 of the cost of erection installation maintenance and repair of such recreational facilities. Such contributions shall be made to the registered proprietor for the time being of the Servient Tenement upon demand. In this easement 'recreational facilities' shall mean any capital improvements effected upon the Servient Tenement from time to time by the registered proprietor thereof which are constructed for the purpose of primarily for the purpose of recreation and, without limiting the generality of the foregoing, shall include any swimming pools and tennis courts erected upon the Servient Tenement." (Words precisely quoted) Clause (iii) makes it clear that the right to use the recreational facilities is conditional upon the individual unit owner making the required payments in respect of capital improvements on land owned by Mr and Mrs Deves. Apparently, there are 52 units in Palm Grove Village, so the assumption is that each unit owner shall contribute to the capital cost. However, cl. 2 provides that the grantor is not under any obligation to erect recreational facilities. It is not stated specifically that the individual unit owners are under no obligation to use the recreational facilities, and so there is no machinery to require the individual unit owners to act on the assumption made in cl. (iii). This uncertainty in the provision and use of recreational facilities may well explain why cl. 1 contains the words "in any event". These words cover the possibility both that the grantor will not build recreational facilities -- 15 of 18 -- 9 and that an individual unit owner will not contribute to the cost of the recreational facilities. Clause 3 is in the nature of mutual covenants of peaceable use of the servient tenement. Clause 4 is a covenant by the grantees to indemnify the grantor against all actions, proceedings, demands, claims costs and damages by reason of the grantees under the easement. In the context of that clause "costs" means costs associated with litigation. It does not assist in this determination the meaning of "cost in cl. 1. Clause 5 permits the grantor to make regulations about the use of the servient tenement. Clause 6 provides that the covenants in the document run with the land. Turning then to cl. 1, the primary obligation cast on the unit owner is to contribute to the "cost of the upkeep and maintenance of the servient tenement". It is then made clear that, without limiting the generality of this obligation, the proportion of "all rates and taxes (including land tax) and other outgoings" is to be paid. It is clear that "all qualifies rates and taxes, but not "other outgoings". It is not clear that this is significant. "All" is a word of general inclusion which often adds nothing but a sense of satisfaction to the person drawing the document. It is understandable that rates and taxes might not be thought to be included in the "cost of the upkeep and maintenance of the servient tenement" so that "all rates and taxes (including land tax)" are specifically included. However, the "cost of upkeep and maintenance" of -- 16 of 18 -- 10 the servient tenement would include "other outgoings" in the sense of outgoings other than rates and taxes, so that the addition of the word "all" would not make the words more certain. Mr Morris QC laid stress on the fact that the contributions are payable "on demand". He submitted that this deemed the unit owners the opportunity of examining any claim by Mr and Mrs Deves in respect of payment for work they had performed. Any weight in this submission is considerably reduced by the declaration that only reasonable charges are recoverable. In any case "upon demand" only fixes the time of payment. It does not remove from the unit owner the right to know that the claim is in respect of the cost of the upkeep and maintenance of the servient tenement. In other words, Mr and Mrs Deves have to show their claim is reasonable. The recitals to the easement make it clear that the one reason for the granting of the easement was to enhance the enjoyment by the unit owners of their own units ("enjoyment of the Dominant Tenement"). In a commercial document, it would be unusual that such a benefit would be provided gratuitously. So the question is what must be "given to acquire, produce or effect" that enjoyment? The easement specifies certain things - rates and taxes must be paid, and recreational facilities may be provided. But also there will be upkeep and maintenance of Lot 4. Labour is required to "effect" that. What must be given for that labour? Are the unit owners to pay Mr and Mrs Deves their outgoings if a -- 17 of 18 -- 11 gardener is employed, but not if they do the gardening themselves? That would be a surprising result in a commercial document. In my view, the definitions in the Oxford Dictionary do not support the decision of the Chamber Judge. He adopted a definition which equated "cost with "outlays, expenditure, expense", which the Dictionary describes as obsolete. The broader primary definition would include the time expended, and work and labour performed by Mr and Mrs Deves to effect one of the purposes of the easement. Such a construction would also accord with the usual concepts of a commercial document. In my opinion the declarations of the Chamber Judge should be set aside and that in lieu there should be declarations in accordance with these reasons. -- 18 of 18 --