BARRETT and Your House Our Community Pty Ltd and ORS
[2005] WASAT 252
•21 SEPTEMBER 2005
BARRETT and YOUR HOUSE OUR COMMUNITY PTY LTD & ORS [2005] WASAT 252
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2005] WASAT 252 | |
| STRATA TITLES ACT 1985 (WA) | |||
| Case No: | CC:2399/2005 | DETERMINED ON THE PAPERS | |
| Coram: | MR T CAREY (MEMBER) | 21/09/05 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Application successful Order for removal of portions of signage made | ||
| B | |||
| PDF Version |
| Parties: | GEORGE & RUTH BARRETT YOUR HOUSE OUR COMMUNITY PTY LTD SUZANNE SIRANOVIC DAMIAN WAIN |
Catchwords: | Strata titles Signage rights of lessee of lot obtained prior to land being strata titled Rights in respect of encroachment on public way Whether Tribunal has jurisdiction Whether rights ran with land when converted to strata Effect of provisions of lessee's lease with former owner Effect of adjoining lot owner's notice of rights Strata Plan 43573 |
Legislation: | Strata Titles Act 1985 (WA) s 21, s 21(1)(d), s 42(5), s 42(7), s 81(1), s 83(1), s 84(1)(b) |
Case References: | Re No 1 Albemarle St [1959] 1Ch 531; 1 All ER 250 Nil |
Orders | 1. Pursuant to s 83(1) and s 84(1)(b) Strata Titles Acts 1985(WA), by 11 November 2005, the first respondent is at its own cost and risk to remove the Wizard Home Loans signage which appears on the bottom awning wings where it extends beyond the projected boundary lines of lot 3 to the fronts of lots 2 and 4 of 14 Pinjarra Road, Mandurah and the adjoining public way. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : STRATA TITLES ACT 1985 (WA) CITATION : BARRETT and YOUR HOUSE OUR COMMUNITY PTY LTD & ORS [2005] WASAT 252 MEMBER : MR T CAREY (MEMBER) HEARD : DETERMINED ON THE PAPERS DELIVERED : 21 SEPTEMBER 2005 FILE NO/S : CC 2399 of 2005 BETWEEN : GEORGE & RUTH BARRETT
- Applicants
AND
YOUR HOUSE OUR COMMUNITY PTY LTD
SUZANNE SIRANOVIC
DAMIAN WAIN
Respondents
Catchwords:
Strata titles - Signage rights of lessee of lot obtained prior to land being strata titled - Rights in respect of encroachment on public way - Whether Tribunal has jurisdiction - Whether rights ran with land when converted to strata - Effect of provisions of lessee's lease with former owner - Effect of adjoining lot owner's notice of rights - Strata Plan 43573
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Legislation:
Strata Titles Act 1985 (WA) s 21, s 21(1)(d), s 42(5), s 42(7), s 81(1), s 83(1), s 84(1)(b)
Result:
Application successful
Order for removal of portions of signage made
Category: B
Representation:
Counsel:
Applicants : Self-represented
Respondents : Self-represented
Solicitors:
Applicants : Self-represented
Respondents : Self-represented
Case(s) referred to in decision(s):
Re No 1 Albemarle St [1959] 1Ch 531; 1 All ER 250
Case(s) also cited:
Nil
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Summary of Tribunal's decision
1 The applicants, the owner/lessor of shop premises in a strata titled commercial development, sought an order against their lessee for removal of those parts of the lessee's signage that extended outside the frontage of the lessee's lot and encroached upon the frontage of the lots of two neighbouring lots.
2 The matter was complicated by the facts that the lessee obtained its rights to the signage from a former owner prior to the development being strata titled, and the majority of the disputed signage was constructed above a public way and outside of the parcel comprising the strata scheme.
3 The Tribunal found that it had jurisdiction to determine the matter despite the substantial part of the signage being beyond the parcel, based on a deeming provision in the Strata Titles Act1985 (WA) (the Act) dealing with encroachments. It considered the effect on the pre-existing signage rights of the strata titling of the development, and found that the rights were personal rights only which did not run with the land. As such they were not enforceable against the lot proprietors, who were entitled to enjoy as common property the relevant parts of the parcel and encroachment. The same result followed from an analysis of the relevant terms of the lease.
4 The Tribunal ordered that the lessee remove the disputed portions of the signage by 11 November 2005.
Introduction
5 By a lease dated 13 December 2002, Your House Our Community Pty Ltd (YHOC), the first respondent, entered a five-year lease of commercial premises at Shop 3/14-Pinjarra Road, Mandurah with the then lessor, Grimwood Nominees Pty Ltd (Grimwood). The second and third respondents were and are directors of YHOC and were guarantors of the obligations of YHOC under the lease.
6 The leased premises are one of five shops in the same commercial development. Initially, each of the five shops was owned by Grimwood. On 17 September 2003, Strata Plan 43573 (plan) comprising the five shops was registered, and at about the same time Grimwood sold at least some of the shops as lots in the strata scheme. Shop 3 (lot 3 in the
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- scheme) was sold to the applicants (Barretts), subject to the lease of YHOC.
7 YHOC operates a "Wizard Home Loans" franchise from the leased premises. Lot 3 is the middle of the five lots, and is fronted by signage on the front fascia, awning and what are described as "awning wings" in orange, blue and white "Wizard Home Loans" livery. It is accepted that part of the signage, and in particular parts of the signage on the awning wings, extend outside the boundary of the front of lot 3 to encroach upon the outsides of Shops 2 and 4 (lots 2 and 4) respectively. The precise location of the awning wings in relation to the parcel of land comprising the strata scheme will be referred to shortly.
8 YHOC has resisted demands that it remove the relevant parts of the awning wings.
9 The Barretts are in the somewhat unusual situation of bringing an application under s 83 of the Act seeking relief against their lessees. They seek an order for the removal of the Wizard Home Loans signage in front of lots 2 and 4, limited to the signage on the awning wings. Their application to the Tribunal followed in time a resolution of the strata company requiring them to instruct their lessees to remove the signage from the bottom awning wings to the lot boundary lines between both lots 2 and 3 and lots 3 and 4. The application makes reference to s 42(7) of the Act, whereby a proprietor of a lot is under an obligation to ensure that every occupier of the lots complies with the by-laws for the time-being in force, and to Sch 1 by-law 1(2)(a) (incorrectly referred to as 3(2)(a)) requiring an occupier of a lot to use and enjoy the common property in such manner as not unreasonably to interfere with the use and enjoyment thereof by other proprietors or occupiers.
Threshold issue – does the Tribunal have jurisdiction?
10 Although neither party argued that the Tribunal lacks jurisdiction to determine the application, for reasons I am about to outline I was initially concerned that the Tribunal may not have jurisdiction.
11 The plan is depicted by both a "location plan" and what might be described as a lot plan. The location plan shows the exterior walls of the building. The lot plan shows the division of the building into 5 lots, with a car bay being a part of each of the lots. Only a ground floor is shown.
12 The location plan indicates the exterior of the building by an unbroken line, the whole of which falls, as one would expect, within, or
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- along, the boundaries of the parcel (which is rectangular in shape). However, adjacent to the southern boundary, a series of broken lines indicates the existence of a canopy, which virtually traverses the whole of the boundary. The canopy is symmetrical around the mid-point along the boundary, with three distinct sections. The first and third sections are scalloped in shape, with the middle section (fronting lot 3) having a scooped-out effect and the awning wings referred to earlier. Significantly for present purposes, the whole of the canopy, with the exception of short sections where it is attached to the building, is outside the parcel. According to the location plan, the majority of the canopy comes within Pinjarra Road, a public road, although it is reasonable to infer that in fact the awnings are constructed over a public footpath. In the cases of the awning wings, on the basis of the plan, about the last fifth of each wing is within the parcel. Using the same method of approximation, between one half and two thirds of each wing is outside what might be described as the frontage of lot 3 defined by lines projecting from the points of that lot's boundaries with its neighbouring lots to the southern boundary of the parcel and beyond into the adjoining public way.
13 The Tribunal's jurisdiction under s 83 of the Act is to make an order for the settlement of disputes or rectification of complaints "with respect to the exercise or performance of, or the failure to exercise or perform, a power, authority, duty or function conferred or imposed by this Act or the by-laws in connection with (a) scheme on", relevantly, an occupier of a lot. The Barretts rely upon YHOC's alleged failure to comply with a by-law relating to the use and enjoyment of common property. Except for the short sections described above which fall within the common property, the Barretts' complaint does not relate to common property, hence my concern about the Tribunal's jurisdiction.
14 Section 21 provides:
"Where a strata plan or plan of re-subdivision in respect of a strata scheme indicates the existence of an encroachment, the provisions of this Act, other than those relating to ownership and certification of title, apply to the encroachment as if it were common property."
15 Section 21 is to be read together with s 23(1)(d), which requires, in a case where a part of a wall or building, or material attached thereto, encroaches beyond the external surface boundaries of the parcel on to a public road, street or way, the certificate of the local government required to accompany a strata plan which it is lodged for registration is to certify
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- that the local government is of the opinion that the encroachment in its existing state will not endanger public safety or unreasonably interfere with the amenity of the neighbourhood, and that the local government, with the approval of the minister entrusted with the administration of the Local Government (Miscellaneous Provisions) Act 1960 (WA), does not object to the encroachment. The apparent intent of these provisions is that a person seeking to register a strata plan which involves some encroachment onto a public thoroughfare must first obtain the required certificate from the local government body responsible for the thoroughfare, and that once that has been done, the encroachment will be regarded as part of the common property for the purposes of the Act, but not so as to vest actual ownership of the encroaching portion in the lot proprietors.
16 Here, the plan does indicate the existence of an encroachment in the form of a canopy, and contains a local government certificate in accordance with s 23(1)(d). I am satisfied in such a case that s 21 applies to lay the basis for the Tribunal to determine the matter to the extent that it concerns the encroachment.
17 Having so found, it is necessary in order to determine the matter for the Tribunal to consider the following issues:
(a) What were the consequences of the conversion of the development to strata title for YHOC's signage rights under its arrangement with Grimwood?
(b) How do the provisions of YHOC's lease affect the position?
(c) Does any other basis exist to preserve YHOC's signage rights against the owners of the neighbouring lots?
Consequences for pre-existing signage rights of conversion to strata
18 The respondents rely upon the fact that signage rights, which included the disputed sections of awning wings, were agreed between YHOC and Grimwood, and were the subject of a planning approval/licence of the City of Mandurah, prior to the establishment of the strata company. They do not appear, at least to the extent of the actual signage in place, in the lease document itself, which refers (in additional term 2) to the lessor consenting to the lessee affixing a fluorescent sign to the leased premises, provided that the prior written consent of the lessor and the local authority is obtained. Based on the photographs and documents detailing council approval provided, the extent of the signage
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- is far greater than one fluorescent sign. As indicated earlier, there is signage on the fascia, awning and awning wings, which has led me to draw the inference that YHOC and Grimwood entered a side agreement dealing with the signage rights. However, nothing turns on this.
19 According to the respondents, the signage of the premises was "the most significant aspect of entering into the lease of the premises". Reference was made to the configuration of the entire development being such that the middle tenancy of YHOC might be viewed as the "anchor" tenancy. Its signage, it was said, was in keeping with the design and presentation of the building. From Grimwood's perspective, having such an anchor tenancy provided it with an advantage to attract lessees for the adjacent premises. More significantly, perhaps, the respondents claim that in order to secure the enlarged signage space, the respondents had agreed to a five-year term, when they had initially sought a three-year term, and to above market rental, which, the respondents conceded, may no longer apply in light of subsequent market movements.
20 Leaving aside for the moment any relevant provisions of the lease, Grimwood, as the then owner of all the land and the buildings constructed on the land, considered itself entitled to bestow on YHOC signage rights which encroached upon the exterior surfaces and air-space of the two neighbouring shops (which do not appear to have been leased at the time) and the public way in front of the shops. However, according to a statement on the plan, the boundaries of the lots which are buildings are the inner surfaces of the walls, the upper surfaces of the floor and the under surface of the ceiling. Therefore, since the development was strata titled, the walls shown on the strata plan, including the exterior surfaces of those walls, and the air-space between the walls and the parcel boundary are, and the encroachments on to the public way are deemed to be, the common property of the proprietors of all the lots, as lessees in common in shares proportional to the unit entitlements of their respective lots: s 17 of the Act.
21 The question which then arises is whether Grimwood's covenant to allow YHOC signage rights in respect of parts of the exterior surfaces of the wall and adjacent air space "ran with the land" so as to be enforceable against the new owners, the lot proprietors. The traditional test to be applied is whether the covenant in question "touches and concerns" the land. Bearing in mind that the signage in question extends outside the boundaries of the leased premises, there may be a question as to whether signage rights in respect of these areas could ever be said to touch and concern lot 3. However, the courts having determined that a covenant to
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- permit a lessee to display an advertising sign does not touch and concern the leased land (Re No 1 Albemarle St [1959] 1Ch 531; 1 All ER 250), it is not necessary to consider that question. Regardless of whether the signage covenant was contained in the lease itself or was the subject of a side agreement, it was a pure licence which did not run with the land on the change of ownership, and hence is not enforceable against the lot proprietors.
Relevant provisions of lease and their implications
22 The lease between Grimwood and YHOC appeared to contemplate a future change to a strata title development. Clause 15.12 sets out a number of terms which were to apply in that contingency. They included:
"15.12.2 Lessees right to use common property
The Lessee and the Lessee’s permitted assigns the Lessee’s servants, employees, lessees, occupiers and invitees shall have the right in common with the Lessor and the registered proprietors of all the other Strata Lots comprised in the Strata Plan of which the Leased Premises form part and their respective assigns servants, employees, lessees, occupiers and invitees to use the common property comprised in the Strata Plan subject to the by-laws of the Strata Company and to all rules and regulations made by the Strata Company in relation thereto.; and
15.12.4 Strata Company rules and regulations
The Lessee shall comply with all by-laws and rules and regulations made by the Strata Company pursuant to its by-laws and the provisions of the Strata Titles Act."
24 In addition to the respondents not being able to establish that any right bestowed by Grimwood upon YHOC to erect signage on or adjacent to lot 3 ran with the land at the time that the exterior of the lot came into the hands of the lot proprietors, the terms of the lease themselves imposed upon YHOC the obligation of compliance with the by-laws of the strata company, one of which is to not unreasonably interfere with the use and enjoyment of the common property by other proprietors or occupiers. Allowing a sign to remain when the sign encroaches upon the exterior
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- surface and air-space of an adjoining proprietor's lot constitutes such unreasonable interference, in the absence of any exclusive use by-law or lease or other entitlement in favour of YHOC granted by the strata company. It is clear that no such entitlement has been granted.
Any other basis to preserve signage rights?
25 The respondents have argued, as an alternative basis for refusing the application, that the purchasers of the adjacent lots 2 and 4 had, by reason of the existence of the signage, notice of the pre-existing right of YHOC, that they should have undertaken investigation to ascertain the legal status of the signs, and that this notice and lack of action meant that the respondents’ right took priority over their interests. This argument is related to a submission regarding the incorrect completion by Grimwood of a disclosure document issued by it preparatory to the sale of the future lots in a strata scheme, in which Grimwood indicated a negative response to the question:
"Have either of the Strata Company or the original proprietor granted or proposed to grant any lease, licence, right of exclusive use or special privilege over the common property or any part of it to the purchaser or any other person?"
26 The problem with this argument is that it assumes the existence of a continuing right of YHOC subsequent to the conversion to strata. Once it is established that the right in question is a personal right which does not run with the land, then after the conversion, the right is extinguished, and some positive act by the strata company is necessary before it could be restored.
27 Looking at the matter in a slightly different way, had the relevant lot proprietors undertaken the investigation that the respondents required of them, they would have discovered that YHOC was unable to maintain the right for which the respondents contend against them.
28 It might be accepted that the signage rights were an important aspect for the respondents in the negotiation of the lease with Grimwood, and it may be that there are avenues available to seek redress for the extinguishment of those rights. However, that is not a matter that this Tribunal can determine.
Orders sought and made
29 The Tribunal is permitted to make an order different from that sought by an applicant, provided that the order it makes does not differ in
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- substance from the order sought: s 81(1) of the Act. The applicants sought the following order:
"That (YHOC) Directors Suzanne Siranovic and Damian Wain consent without dispute to the removal of the Wizard Home Loans signage in front of Shops 2 and 4, 14/18 Pinjarra Road, Mandurah."
Order
31 The Tribunal orders:
1. Pursuant to s 83(1) and s 84(1)(b) Strata Titles Acts 1985(WA), by 11 November 2005, the first respondent is at its own cost and risk to remove the Wizard Home Loans signage which appears on the bottom awning wings where it extends beyond the projected boundary lines of lot 3 to the fronts of lots 2 and 4 of 14 Pinjarra Road, Mandurah and the adjoining public way.
I certify that this and the preceding [31] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR T CAREY, MEMBER
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