ANTOFF and THE OWNERS OF STRATA PLAN 8883, NO 33 ANGELO STREET, SOUTH PERTH
[2011] WASAT 125
•16 AUGUST 2011
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: COMMERCIAL & CIVIL
ACT: STRATA TITLES ACT 1985 (WA)
CITATION: ANTOFF and THE OWNERS OF STRATA PLAN 8883, NO 33 ANGELO STREET, SOUTH PERTH [2011] WASAT 125
MEMBER: MR S ELLIS (SENIOR SESSIONAL MEMBER)
HEARD: 14 JUNE 2011
DELIVERED : 16 AUGUST 2011
FILE NO/S: CC 333 of 2011
BETWEEN: VAL ANTOFF
PAULA ANTOFF
ApplicantAND
THE OWNERS OF STRATA PLAN 8883, NO 33 ANGELO STREET, SOUTH PERTH
Respondent
Catchwords:
Consent for approval of development unreasonably withheld - Failure to disclose reasons at meeting
Legislation:
Residential Design Codes of Western Australia (2010), cl 6.4
Strata Titles Act 1985 (WA), s 3, s 7, s 7A, s 7A(3), s 7B, s 7B(1), s 7B(5), s 14, s 15, s 16, s 73A, s 73C, 103F, s 103F(3), s 103H
Strata Titles General Regulations 1996 (WA)
Result:
Application successful
Approval deemed to have been given
Category: B
Representation:
Counsel:
Applicant: Selfrepresented
Respondent: Selfrepresented
Solicitors:
Applicant: Self-represented
Respondent: Self-represented
Case(s) referred to in decision(s):
Burns and The Owners of Observation Rise Strata Plan 24414 [2006] WASAT 17
IW v City of Perth (1997) 191 CLR 1; [1997] HCA 30
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 153 ALR 490
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
This was a dispute about whether the applicants, Mr and Mrs Antoff, could construct extensions to their property, which is Unit 6, No 33 Angelo Street, South Perth. The respondent is the strata company of the development in which the applicants live. Under s 7 of the Strata Titles Act 1985 (WA), the strata company must approve extensions to a building on a strata lot before extensions can proceed. The respondent declined to approve the applicants’ extensions.
The applicants sought an order that the approval required under the Strata Titles Act 1985 be deemed to have been given, pursuant to s 103F of the Strata Titles Act 1985. They contended that the respondent's failure to approve their extensions was 'unreasonable'. Under s 7(4) of that Act, approval may only be refused by a strata company on limited grounds, including the ground that carrying out the extensions will result in a breach of the applicable open space requirements.
One proprietor in the development voted against the application. His vote was sufficient for approval of the extension to be refused. He voted 'no' because he considered that the unit entitlements shown on the strata plan should be amended or corrected and that the extensions would breach the applicable open space requirements, once the unit entitlements had been changed.
The Tribunal held that this reason did not fall within the grounds permitted by s 7(5) of the Strata Titles Act 1985. A decision about compliance with open space requirements must be based on the unit entitlements prevailing at the time the application for approval is considered, rather than on what the unit entitlements might be at some time in the future.
There was uncontested evidence that carrying out the construction would not contravene the open space requirements based on the existing unit entitlements.
Because the ground did not fall within s 7(5) of the Strata Titles Act 1985, approval should have been given but was unreasonably withheld. The Tribunal made an order under s 103F of the Strata Titles Act 1985 deeming that approval had been given.
Introduction
Mr and Mrs Antoff are the owners of Unit 6, No 33 Angelo Street, South Perth. It is part of Strata Plan 8883. They want to build an extension to their unit but to do so, they need the approval of the respondent. The respondent is the strata company under the Strata Titles Act 1985 (WA) (ST Act) for the development of which their property is a part.
At a meeting of the respondent on 18 November 2010 (meeting), the respondent refused to give its approval. The applicants challenge the respondent's refusal under s 103F of the ST Act. They say the refusal was unreasonable and seek orders that the approval of the respondent be deemed to have been given.
At the hearing before the Tribunal, Mr Antoff represented himself and his wife. Ms Bellamy, who owns Unit 1, and Mr Hepburn, who owns Unit 7, both appeared for the respondent. They are councillors of the respondent. Mr Szabo also attended. He is a director of the company which manages the development.
The issues
The primary issue which arises is whether the consent of the respondent was unreasonably withheld for the purposes of s 103F of the ST Act. This issue will be considered first.
The following issues also arose:
a)Did the proprietor who voted against approving the extensions at the meeting disclose as a ground for his vote one or more of the grounds identified in s 7(5) of the ST Act?
b)Did the respondent give the applicants notice of its decision within 77 days after they applied to the respondent in accordance with s 7B(5) of the ST Act?
These issues will be considered after the primary issue.
Legislative background
No 33 Angelo Street, South Perth is a strata plan scheme to which s 7 of the ST Act applies. The effect of s 7(1) and s 7(2) in the present circumstances is that the proprietor of a lot in a strata development must not cause or permit any alteration of a structural kind or an extension to a structure on their lot without the prior approval of the strata company, expressed by way of a resolution without dissent (see s 7(1) and s 7(2) and s 3, s 73A and s 73C).
A proprietor of a lot may apply to the strata company for approval of an extension. The ST Act and the Strata Title General Regulations 1996 (WA) set out the way in which an application for approval must be made. It was not alleged that the applicants had failed to comply with those requirements.
The strata company is required to convene a meeting of proprietors within 35 days after it receives an application for approval of an extension (s 7B(1)). Sections 7(4) and (5) deal with the conduct of the meeting:
(4) Where an application is made to a strata company in accordance with section 7B -
(a)notice of the general meeting to which the application is to be submitted shall contain or be accompanied by a statement, in the prescribed form, of the effect of paragraphs (c) and (d);
(b)the chairman of the general meeting shall before a vote is taken on the application read out the statement referred to in paragraph (a);
(c)a proprietor may vote -
(i)against a resolution to approve the application; or
(ii)in support of a resolution to refuse approval of the application,
on any ground that is permitted by subsection (5), but not otherwise; and
(d)a vote referred to in paragraph (c) is of no effect unless the person casting the vote discloses as a ground for his vote one or more of the grounds permitted by subsection (5);
(5)The grounds on which approval may be refused are -
(a)that the carrying out of the proposal will breach the plot ratio restrictions or open space requirements for the lot ascertained in accordance with section 7A(3);
(b)in the case of a lot that is not a vacant lot, that the carrying out of the proposal -
(i)will result in a structure that is visible from outside the lot and that is not in keeping with the rest of the development;
(ii)may affect the structural soundness of a building; or
(iii)may interfere with any easement created by section 11 or 12; or
(c)any other ground that is prescribed.
Section 7A(3) of the ST Act provides:
(3)For the purposes of subsection (2) the plot ratio restrictions or open space requirements for a lot are -
(a) those provided for by the by-laws of the strata company; or
(b) in the absence of any such provision, those that represent the pro rata entitlements of or requirements for the lot calculated on the proportion that the area of the lot bears to the area of the parcel.
It was common ground that the open space requirement applicable to the extensions came from the Residential Design Codes of Western Australia (2010) (Codes). Under the column 'minimum open space (% of site)' the figure 50% is shown. The Tribunal was provided with a copy of an extract from cl 6.4 of the Codes, which provides:
Open space provided in accordance with table 1 and design elements 6.2 and 6.2. The site of the grouped dwelling, for the purposes of calculating the open space requirement, shall include the area allocated for the exclusive use of the dwelling and the proportionate share of any associated common property.
The result is that the open space requirements permit a dwelling on a lot to occupy up to 50% of the total of the area allocated for the exclusive use of the dwelling and the proportionate share of the common property attributable to the lot. The proportionate share of the common property is calculated by finding the ratio that the unit entitlement of the lot bears to the total number of units in the development and then multiplying the common area by that ratio.
Section 7B(5) of the ST Act requires the strata company to give notice of the outcome of an application for approval within 77 days.
Section 103F of the ST Act provides that a person who has applied for but not obtained an approval under s 7B may apply to this Tribunal for an order. The order which may be made under s 103F is an order declaring that the 'approval required under section 7 or 7A, as the case may be, is to be deemed to have been given by the … strata company'. Section 103F(3) provides that this Tribunal may make an order if satisfied that the approval should have been given under s 7 or s 7A, as the case may be, but has been unreasonably withheld.
Factual background
The application to the Tribunal attached a Landgate search of Strata Plan 8883. It shows the present unit entitlements as follows:
| Lot No | 1 | 2 | 3 | 4 | 5 | 6 | 7 | Total |
| Unit Entitlement | 91 | 84 | 109 | 103 | 106 | 103 | 74 | 670 |
It was not disputed that:
a)the area of the applicants' lot is 156 square metres in total, of which 77 square metres have been already developed;
b)the area of the extensions which the applicants want to build is 31 square metres; and
c)the common area is 413.6 square metres.
On 19 January 2010, the applicants sought planning approval from the City of South Perth (City) to construct their extensions. The City granted approval on 29 June 2010. The approval ceases to be valid if construction has not started within two years after approval.
On 27 September 2010, the applicants applied to the respondent for approval to construct extensions to their unit in Strata Plan 8883 (application). The application was considered at the meeting. The vote was 4 to 1 in favour of the proposal, which was not sufficient for the resolution to pass under s 7(2) of the ST Act. The minutes of the meeting (minutes) show that Mr Hepburn's vote was cast against the application.
Mr Hepburn did not attend the meeting personally. He voted by proxy. He gave his proxy to Mr Szabo.
During the hearing, the issue arose as to what information was disclosed at the meeting about Mr Hepburn's reasons for voting against the application. Mr Hepburn could not assist because he did not attend the meeting. Mr Antoff attended the meeting. He asserted that nothing was said at the meeting about the reasons for Mr Hepburn's vote. Ms Bellamy, who also attended the meeting, indicated that Mr Hepburn's reasons 'would have been' the matters addressed by Mr Semmens. Mr Semmens was an employee of a firm of surveyors which had provided advice to the respondent. He attended the meeting. The minutes record that he expressed the view at the meeting that the existing unit entitlement was incorrect. Ms Bellamy's statement appeared directed to what Mr Hepburn's reasons were, rather than what was disclosed about them at the meeting itself. Mr Szabo, who was the recipient of Mr Hepburn's proxy, initially indicated that Mr Hepburn's reasons where disclosed in a letter dated 1 December 2010 to him from Mr Hepburn, the relevant parts of which are set out below. However, this letter could not have disclosed Mr Hepburn's reasons to the meeting because the meeting took place before the date of the letter. Mr Szabo also indicated at the hearing that information was circulated before the meeting which might have stated Mr Hepburn's reasons. Accordingly, Mr Szabo was given the opportunity to provide to the Tribunal a copy of the materials that had been circulated prior to the meeting. On 14 June 2011, Mr Szabo provided a copy of the notice of the meeting together with a copy of Mr Hepburn's proxy form. Mr Hepburn's proxy was clear. It stated, 'Vote is no'. However, neither the notice of meeting nor the proxy stated why Mr Hepburn's vote was 'no'.
The Tribunal accepts that the letter of 1 December 2010 sets out Mr Hepburn's reasons for his vote. However, the Tribunal also accepts the statement of Mr Antoff and finds that Mr Szabo did not disclose at or before the meeting the reason Mr Hepburn voted against the application. The disclosure occurred afterwards.
Mr Hepburn's letter to Mr Szabo of 1 December 2010 states reasons for voting against the application. The relevant part reads:
My objection to the proposed extensions for unit 6 falls within - in my view - section 30 of the Strata Titles General Regulation 1996, sub section 1, ie the carrying out of the proposal will breach the plot ratio restrictions or open space requirements for the lot, ascertained in accordance with section 7A(3) of the Strata Titles Act 1985.
Having read the advice by Greg Rowe and Associates, I understand that the open space unit entitlements used by Unit 6 to base their extensions upon, are possibly incorrect.
Greg Rowe and Associates questioned the validity of the unit's entitlements being used and have prepared a more accurate proportional share calculation in their table provided.
In essence this means that Unit 6 can only develop 24.45 as additional development potential rather than 33.34 sqm.
Rowe and Associates recommend further research in clarifying each Strata owner's proportionate share of the property. This is due to the changing of the Strata plan legislation from Build Strata to Survey Strata.
The reference to advice by Greg Rowe and Associates is a reference to the letter dated 17 November 2010 to Ms Bellamy, prepared by a Mr Semmens, a copy of which was provided to the Tribunal by the respondent. Mr Semmens attended the meeting and expressed similar views there. The Tribunal was provided with a letter from Rowe and Associates of 17 November 2010, which was the advice referred to. That letter noted that it had been prepared without a site visit to confirm the exact areas of open space within each strata allotment. In his letter, Mr Semmens contends 'there is a question mark over the validity of the "unit entitlement" being used'. In the letter he provides two tables, one based on the existing unit entitlements and the other based upon Mr Semmens' calculation of the 'correct' entitlements. The tables deal with all units in the development. The entries showing the present situation for Lot 6 are as follows.
Table 1
| Developed Area- existing buildings (m2) | Open Space (m2) | Total Strata Lot (m2) | Unit Entitlement | Share of common property (m2) | Total Site area (m2) | Developable area - half site area (m2) | Additional G/F Development Potential (m2) |
| 77 | 79 | 156 | 15.40% | 64.68 | 220.68 | 110.34 | 33.34 |
The letter also contains a similar table showing the situation applying what Mr Semmens appears to consider the correct approach, which he refers to as 'Proportional Share'. Again, the tables deal with all units. The entries for Lot 6 are set out in Table 2.
Table 2
| Developed Area- existing buildings (m2) | Open Space (m2) | Total Strata Lot(m2) | Proportional Share | Share of common property (m2) | Total Site area (m2) | Developable area - half site area (m2) | Additional G/F Development Potential (m2) |
| 77 | 79 | 156 | 11% | 46.90 | 202.90 | 101.45 | 24.45 |
The applicants' proposed extensions involve an additional 31 square metres, which is less than the additional ground floor development potential in Table 1, but more than the additional ground floor development in Table 2. It may be concluded that the applicants' development would breach the open space requirements if the 'proportionate share' identified by Mr Semmens was used in calculating the share of the common area. Conversely, the applicants' development would not breach the open space requirements if the current unit entitlement of Unit 6 is used.
The minutes record that Mr Semmens said at the meeting that he considered the unit entitlements specified on the title are incorrect and that it would be necessary to resurvey the units to correct the error. He did not expand on the reasons for this conclusion in his letter of 17 November 2010.
Was the decision unreasonable?
Section 103F of the ST Act refers to the consent of the strata company being 'unreasonably' withheld. It appears from the interrelation of s 7(5) and s 103F of the ST Act that the application of s 103F is a two stage process. It is first necessary for there to exist one of the grounds upon which s 7(5) of the ST Act permits an objection to be made. If none of the grounds of objection identified in s 7(5) exist, then there is no reason for the application to have been refused and the decision is 'unreasonable' for the purposes of section 103F of the ST Act. This is a matter for objective determination by the Tribunal. If a ground of objection exists, then the Tribunal must determine whether the refusal of the application was 'reasonable' which may involve assessing the factors which favour and militate against the refusal (Burns and The Owners of Observation Rise Strata Plan 24414 [2006] WASAT 17). The Tribunal must bear in mind that the question at this stage is whether the refusal was 'reasonable', not whether the Tribunal would have itself made the same decision.
The respondent is a legal entity distinct from the proprietors entitled to vote at its meetings. The reasons of the strata company may be taken to be the reasons of a minority of voters where the outcome of a vote would have been different but for the views of the minority (IW v City of Perth (1997) 191 CLR 1; [1997] HCA 30, per Toohey and Kirby JJ). In the present case, the views of Mr Hepburn for voting against the application may be treated as the reasons of the respondent for rejecting the application. His was the crucial vote.
Only s 7(5)(a) of the ST Act is possibly relevant to the refusal of the application. Section 7(5)(a) of the ST Act justifies a refusal where 'carrying out […] the proposal will breach the plot ratio restrictions or open space requirements for the lot ascertained in accordance with section 7A(3)'.
This provision requires consideration of the situation which 'will' apply at some time in the future. The use of 'will' is necessary because the redevelopment proposal has not been put into effect at the time the proposal is being considered. However, this does not entitle a strata corporation to consider applications by reference to open space requirements which are not yet applicable. Section 7(5) of the ST Act refers to 'the plot ratio restrictions or open space requirements'. This may best be understood as a reference to the restrictions and requirements which apply at the time an application is considered. A similar approach should be taken to other elements involved in determining the application of plot ratio restrictions and open space requirements. Specifically, the unit entitlement of units within a strata plan will affect the proportionate share of the common property to be taken into account in applying the open space requirements. Although mechanisms exist under the ST Act for unit entitlements to be amended, these mechanisms generally require a unanimous resolution or approval by this Tribunal based on a substantial discrepancy between the unit entitlement and the 'true' unit entitlement (see s 14, s 15, s 16 and s 103H of the ST Act). Predicting the outcome of meetings and applications under the ST Act for approval of changes to unit entitlement involves an element of speculation. Applications under s 7 of the ST Act must be considered by the strata corporation within 35 days. The efficient and fair consideration of applications for approval under s 7(5) of the ST Act would not be furthered by allowing a strata corporation to judge applications using unit entitlements which might, or might not, come into operation at some more or less distant time in the future. Consequently, applications under s 7 should be considered having regard to the unit entitlements prevailing at the time of the meeting called in accordance with that section.
The prevailing unit entitlements of the various proprietors in the development are established by the Landgate records. In the present case, Mr Semmens' letter established that the application for approval did not breach the open space restrictions, based on the prevailing unit entitlements. There was no ground or reason upon which there could be a vote against the Application on that basis. Accordingly, the Tribunal finds that the consent of the respondent was withheld and that it was withheld 'unreasonably' within the meaning of that expression in the ST Act. The applicant is entitled to an order under s 103H of the ST Act.
Ancillary issues
An ancillary issue which arose in the course of the hearing was whether the ground for the single vote against the Application had been disclosed as required by s 7(4)(c) of the ST Act.
Section 7(4)(d) ST Act requires disclosure of the reason at or before the time of the vote. Section 7(4)(d) has this effect because it occurs in the context of a paragraph dealing with the conduct of the meeting. The requirement for disclosure enables debate at the meeting to be directed to objective criteria and assists the proprietors to ascertain whether a vote is cast for reasons which fall within s 7(5), rather than unarticulated reasons which do not fall within s 7(5) of the ST Act. It is noted that s 3A of the ST Act contemplates that a proprietor may cast a vote in writing up to 28 days after a meeting has taken place. This general ability does not override the specific requirement in s 7(4)(a) of the ST Act to disclose the reason at the meeting.
The letter of 1 December 2010 to Mr Szabo was not effective to disclose Mr Hepburn's reasons to the meeting. Mr Hepburn's reasons for voting against the application were not disclosed prior to the vote. This was a failure to comply with s 7(4)(d) of the ST Act.
Section 7(4) of the ST Act provides that a vote which does not comply with s 7(4)(d) is of no effect. Hence, the vote against the resolution was of no effect, making the vote unanimously in favour. The failure to give a reason for voting against the application during the meeting also has the effect that the vote was not 'reasonable' within s 7(5) of the ST Act. This provides a further basis for an order under s 103F of the ST Act.
Failure to inform the applicants of the outcome
Section 7B(5) of the ST Act requires the strata company to inform an applicant for approval of the result of an application within 77 days after the application for approval was made to it. The application was made to the respondent on 27 September 2010. Seventy seven days after 27 September 2010 is 13 December 2010.
The applicants contend that they did not receive any notice of the result by 13 December 2010. The applicants were, of course, aware of the result because they attended the meeting. It was apparent during the course of the hearing that none of the representatives of the respondent were aware of the provisions of s 7B of the ST Act. In these circumstances, the Tribunal finds that notice was not given.
Section 7B of the ST Act does not state the consequences which follow from noncompliance with its provisions, unlike s 7(4)(d) of the ST Act. In such circumstances, the effect of failure to comply with a statutory requirement is to be ascertained by determining, from a consideration of the terms of the legislation, whether Parliament would have intended that an act done in contravention of s 7B would be invalid (Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 153 ALR 490). The answer to that inquiry, in the present case, is that Parliament would not have intended the decision of the strata company to be invalidated. A failure to give notice under s 7B may occur through inadvertence or deliberate action. The failure to give notice may occur whether the application for approval was successful or unsuccessful. Parliament would not countenance invalidation of a successful application by a subsequent failure to give notice, whether deliberate or inadvertent. The Tribunal concludes therefore that the failure to comply with s 7B does not invalidate the resolution.
Conclusion
The Tribunal finds that the respondent's withholding of its consent to the application was unreasonable because, objectively, there was no reasonable basis for withholding that consent within s 7(5) of the ST Act and no reason was given for withholding consent at or before the time of the meeting, as required by s 7(4)(d) of the ST Act. An order should be made deeming consent to have been given.
Orders
The Tribunal orders that:
1.The approval of the Owners of Strata Plan 8883 of No 33 Angelo Street, South Perth is deemed to have been given.
I certify that this and the preceding [46] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR S ELLIS, SENIOR SESSIONAL MEMBER
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