BLAKENEY and THE OWNERS OF WESTCOURT WEST PERTH STRATA PLAN 37494
[2022] WASAT 84
•9 SEPTEMBER 2022
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: STRATA TITLES ACT 1985 (WA)
CITATION: BLAKENEY and THE OWNERS OF WESTCOURT WEST PERTH STRATA PLAN 37494 [2022] WASAT 84
MEMBER: MS A KING, MEMBER
HEARD: 2 SEPTEMBER 2022
DELIVERED : 9 SEPTEMBER 2022
FILE NO/S: CC 381 of 2022
BETWEEN: MICHAEL LESLIE BLAKENEY
LOUISE RIKI BLAKENEY
Applicants
AND
THE OWNERS OF WESTCOURT WEST PERTH STRATA PLAN 37494
First Respondent
CHRISTOPHER GEORGE SMITH
Second Respondent
Catchwords:
Re-assessment of unit entitlements - Strata titles - Capital value of units - Change to aggregate value of lots - Inspection of units as reasonably practicable in determining values and entitlements
Legislation:
Strata Titles (General) Regulations 2019 (WA), Pt 7, reg 54
Strata Titles Act 1985 (WA), s 3, s 37, s 37(2), s 38, s 38(5)
Valuation of Land Act 1978 (WA), Pt I, s 4
Result:
Application granted
Category: B
Representation:
Counsel:
| Applicants | : | Mr M Reid |
| First Respondent | : | Ms C Spencer |
| Second Respondent | : | In Person |
Solicitors:
| Applicants | : | Jackson McDonald |
| First Respondent | : | N/A |
| Second Respondent | : | N/A |
Case(s) referred to in decision(s):
Nil
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
This is a proceeding in which the applicants applied to the Tribunal under s 38(5) of the Strata Titles Act 1985 (WA) (ST Act) for authority to amend the schedule of unit entitlements for the Scheme known as Westcourt West Perth Strata Plan 37494, with the address of the Scheme as 103 Colin Street, West Perth, Western Australia, 6005. The applicants are the owners of Lot 52 as joint tenants and the respondents are The Owners of Westcourt West Perth Strata Plan 37494 (first respondent) and Christopher George Smith, an owner of Lot 29 (second respondent).
A hearing in relation to the proposed orders (Proposed Orders) was conducted on 2 September 2022.
The second respondent failed to attend the hearing. The Tribunal notes that he failed to attend any of the direction hearings in relation to the proceeding. By order of the Tribunal made on 5 July 2022 the second respondent was to provide to the Tribunal and the applicants confirmation in writing that he intends to participate in the proceeding. If by that date, he had not provided said confirmation, he would be struck out as a respondent to the matter.
The Tribunal was satisfied that the second respondent did not comply with the order and that in the circumstances he be struck out.
By their application dated 25 March 2022, the applicants sought the Proposed Orders:
1)Pursuant to s 38(5) of the Strata Titles Act 1985 (WA), the Tribunal authorises the schedule of unit entitlements registered as Westcourt West Perth Strata Plan 37494, with the address of the Scheme as 103 Colin Street, in the State of Western Australia to be amended by being deleted and replaced by the schedule annexed hereto marked 'A'.
Evidence before the Tribunal
Mr Reid of Jackson McDonald, solicitor on behalf of the applicants made submissions to the Tribunal and called Mr Garmony of Garmony Property Consultants as a witness.
The applicants lodged a hearing book which was marked by the Tribunal as Exhibit 1. It contains a report titled 'Unit Entitlement ReAssessment' prepared by Matthew Garmony, (Garmony Report)[1] which includes a valuation report and a proposed schedule of unit entitlements.
[1] Exhibit 1 tab 12.
The first respondent was represented by Ms Spencer who indicated that the first respondent did not propose to make submissions but appeared for the convenience of the Tribunal. The Tribunal accepted into evidence a letter of Susan Barrera, Chairperson for The Owners of Westcourt West Perth Strata Plan 37494 dated 19 May 2022[2] which states:
The notification of the application by the owners of lot 52 was circulated to all owners at the property. The council of the strata company met on 4 April 2022 and resolved the following - “The Strata Company will not oppose the application from Mr & Mrs Blakeney from Lot 52 as the independent valuer's report has been compiled professionally[.]
The regulatory framework
Strata Titles Act 1985 (WA)
[2] Exhibit 2.
Section 38 of the ST Act relevantly provides:
38.Requirements for registration of amendment of schedule of unit entitlements
(1)An amendment of a schedule of unit entitlements may only be registered -
(a)in conjunction with an amendment of the scheme plan to give effect to a subdivision; or
(b)if the amendment is authorised by resolution without dissent of the strata company; or
(c)if the amendment is authorised by order of the Tribunal.
…
(5)The Tribunal may, on the application of a strata company or the owner or registered mortgagee of a lot in a strata titles scheme, authorise the amendment of the schedule of unit entitlements for the scheme if satisfied that, if unit entitlements were to be allocated at the time of the application, the schedule of unit entitlements would require amendment for compliance with section 37(2).
(6)If the Tribunal makes an order under this section, the applicant for the order must lodge a copy of the order certified by the Tribunal with the Registrar of Titles for registration of the amendment of the schedule of unit entitlements.
Section 37 of the ST Act relevantly provides:
37.Schedule of unit entitlements
…
(2)When allocated, the proportion that a unit entitlement of a lot bears to the sum of the unit entitlements of all the lots in the strata titles scheme must not be greater than 5% more, or 5% less, than the proportion that the value of the lot bears to the sum of the value of all the lots in the strata titles scheme.
(3)The value of a lot is –
(a)in a strata scheme - the capital value; and
…
(4)Without limitation, the regulations may prescribe matters relating to the determination of the value of a lot[.]
Strata Titles (General) Regulations 2019 (WA)
Regulation 54 of Pt 7 of the Strata Titles (General) Regulations 2019 (WA) (Regulations) deals with schedules of unit entitlements, and relevant includes:
54.Determining capital value of a lot
(1)For the purposes of section 37(4), a determination of the capital value of a lot in a strata scheme that is made for the purposes of registering a schedule of unit entitlements, or an amendment of a schedule of unit entitlements, must be made in accordance with this regulation.
(2)A licensed valuer must determine the capital value of a lot as if it had the standard level of internal fit out and finishes for that lot.
(3)The standard level of internal fit out and finishes for a lot is the level of fit out and finishes that the licensed valuer determines to be a reasonable representation of the average expected level of fit out and finishes for lots in the strata scheme of that property type and of commensurate age.
(4)The standard level of internal fit out and finishes for a lot must be determined by the licensed valuer after —
(a)conducting a physical inspection of the parcel of land the subject of the strata scheme; and
(b)conducting an internal inspection of as many lots in the strata scheme as is reasonably practicable to enable the licensed valuer to make a reasonable assessment of the average expected level of fit out and finishes for lots of the same property type and of commensurate age; and
(c)taking into account any relevant information obtained from the strata company or on the strata plan.
(5)A licensed valuer must include in the capital value of a lot any buildings within the lot that have planning approval or approval under any other written law, whether or not shown on the strata plan.
Capital value
The term 'capital value' is defined in s 3 of the ST Act as having the meaning given in the Valuation of Land Act 1978 (WA), s 4 of that Act provides as follows:
capital value of land means the capital amount which an estate of fee simple in the land might reasonably be expected to realize upon sale - provided that where the capital value of land cannot reasonably be determined on such basis, the capital value of such land shall be the sum of, first, the unimproved value of the land, and, secondly, the estimated replacement cost of improvements to the land after making such allowance for obsolescence, physical depreciation, and such other factors as are appropriate in the circumstances.
Issues for determination
In considering the application, the issues to be determined by the Tribunal are whether, if unit entitlements for the Scheme were to be allocated today, the schedule of strata unit entitlements as on the existing Strata Plan (Current Schedule) would require amendment by reference to the requirements of s 37(2) of the ST Act.
To determine the above, the Tribunal must decide whether there is sufficient evidence by reference to the Regulations to determine:
a)whether, within a 5% tolerance, the unit entitlements in the Current Schedule are proportionate to the capital value of each of the lots relative to the whole of the Scheme, and if not;
b)whether, within a 5% tolerance, the unit entitlements in the Proposed Schedule are proportionate to the capital value of each of the lots relative to the whole of the Scheme.
Material facts
History of the Scheme and matters not in dispute
The Tribunal had regard to the written submissions of the applicants dated 31 August 20211 which were not in dispute.
The original form of the Scheme was created by the registration of Strata Plan 37494 in about June 1999, which described the Scheme as:[3]
A multi-level building of brick and concrete construction comprising six units and one vacant lot for future development.
Situated on Lot 100 on Diagram 98378.
Name of Scheme: Westcourt, West Perth.
Address of Parcel: 130 Colin Street, West Perth, WA, 6005. (later amended to 103 Colin Street, West Perth, WA, 6005)
[3] Exhibit 1, page 58.
At the time of registration, the aggregate of the unit entitlements was 100, as follows:
a)Lots 3, 4, 5, 6 = each allocated 10 unit entitlements;
b)Lot 1 = allocated 9 unit entitlements;
c)Lot 2 = allocated 11 unit entitlements; and
d)Lot 7 = allocated 40 unit entitlements.[4]
[4] Exhibit 1, page 53.
In or about June 2000, Lot 3 was re-subdivided and Lot 8 was created. Lot 8 was allocated 10 unit entitlements (the same as what had been allocated to Lot 3). All other unit entitlements remained as previously allocated.[5]
[5] Ibid page 53.
In or about July 2000, Lots 2 and 4 were re-subdivided creating Lots 9 and 10. Lots 9 and 10 were allocated 11 and 10 unit entitlements respectively (the same as what had been allocated to Lots 2 and 4). All other unit entitlements remained as previously allocated.[6]
[6] Exhibit 1 page 49.
In or about August 2001, Lot 7 was re-subdivided creating 42 lots of residential apartments. The description of the Scheme was amended to:
A multi-level building of brick and concrete construction comprising 48 units.
Situated on lot 100 on diagram 98378.
To be known as Westcourt, West Perth.
Postal address: 103 Colin Street, West Perth, WA, 6005.
There was new allocation of unit entitlements, with a unit entitlement aggregate of 10,000.[7] This is the Current Schedule of unit entitlements.
The valuation evidence
[7] Exhibit 1, pages 45 and 46.
The Garmony Report was prepared by Matthew Garmony and is dated 13 January 2022.
The Garmony Report states that:
a)it has been prepared 'to assess the market value of the property known as Strata Plan 37494, 103105 Colin Street, West Perth (Property) for Unit Entitlement Assessment purposes';
b)'[t]he Property comprises a two-building complex featuring 6 Townhouse style residential and commercial units at 103 Colin Street corner of Clive Street and 42 residential apartments over 8 levels at 105 Colin Street corner of Wellington Street, West Perth';
c)examples under heading 8.3 'Accommodation' of the types of units found within the complex are:
(i)Lot 10 (unit 4) - an example of one of the 6 townhouse styled commercial units at 103 Colin Street;
(ii)Lot 21 (unit 6) - an example of a 2 bedroom 1 bathroom residential until at 105 Colin Street;
(iii)Lot 50 (unit 21) - an example of a 3 bedroom 1 bathroom residential apartment at 105 Colin Street; and
(iv)Lot 51 (unit 22) - an example of a 3 bedroom 1 bathroom residential apartment at 105 Colin Street;
d)it gives a description of the interior of Unit 42;
e)'the Property was inspected … on various dates between 2 September 2021 and 1 October 2021. I inspected the units that were made available to me and have also relied upon information from RP data.com and the Strata Plan';
f)it gives the date of assessment as being 1 October 2021;
g)'Unit Entitlement ReAssessment 'as is' that:
… in assessing the Capital Value of each lot for the purposes of determining the Reallocation of Unit Entitlement based on the existing Strata Plan, I have first established the Capital Value of the Lots, making comparisons to recent sales of residential apartments and commercial offices in West Perth, in particular the Property, making adjustments for the size and accommodation of the units and the benefit on car bays, balconies and the orientation and view of each unit … for the purposes of assessing the unit entitlements I have assumed the units to have a standard level of fit out and finish[.]
h)comparative sales evidence is set out at parts 9.1 to 9.4;
i)'Capital Values Assessment' is set out at part 9.5.1;
k)Mr Garmony's 'Certificate of Assessment' is set out at part 10.
Evidence of Mr Garmony
Mr Garmony told the Tribunal that he has been a licensed valuer since 1999 and is experienced in undertaking valuations for the purposes of assessing unit entitlements. He was the lead adviser on behalf of the Australian Property Institution advising Landgate on strata reform.
He inspected a variety of units and looked at, as many as possible, townhouses and units within the tower complex, the process being to assess capital value on a standard commensurate with the age of the building and look at comparable sales within the locality based on square meterage. He took into consideration the different configurations and sizes and number of car bays and other matters he deemed relevant.
In summary Mr Garmony's evidence was that the Current Schedule of unit entitlements for Strata Plan 37494 should be amended in accordance with the table set out in the Garmony Report.[8]
Applicants' submissions
[8] Exhibit 1, pages 276 and 277.
The applicants submit that the valuation evidence of Mr Garmony set out in the Garmony Report meets the criteria set out in s 38(5) and s 37(2) of the ST Act and supports the Proposed Orders.
The applicants are the registered proprietors of Apartment 42 which is one of the 42 residential apartments created by the re-subdivision of Lot 7 in or about August 2001.
Apartment 42 is Lot 52 on Strata Plan 37494. It is 299m2 in size comprised of 242m2 for the living area, 28m2 for a car bay and storage and 29m2 for a balcony. It is a three bedroom, two bathroom 'penthouse style' apartment.[9]
[9] Exhibit 1, page 267.
Apartment 42 is allocated a unit entitlement of 743 out of the aggregate of 10,000.[10]
[10] Exhibit 1, page 46.
The applicants submit that Mr Garmony's evidence supports the view that the Current Schedule of unit entitlements for Strata Plan 37494 should be amended in accordance with the table set out at 9.5.2 of the Garmony Report[11] and which is replicated in the Proposed Orders.[12]
Consideration and findings of the Tribunal
[11] Exhibit1, pages 276 and 277.
[12] Exhibit 1, Tab 3.
The Tribunal accepts the valuations in the Garmony Report as supported by the oral evidence of Mr Garmony and that the Proposed Schedule of valuations reflects the valuations in the Garmony Report.
The Tribunal is satisfied that in preparing the Garmony Report, Mr Garmony fulfilled the prescribed requirement in dealing with the value of the lot as set out for the purpose of s 37 of the ST Act and the Regulations. The Tribunal accepts that Mr Garmony is a licensed valuer and gave evidence that he has at all times been licensed since 1999 and that he carried out a physical inspection of the Property including inspections as was reasonably practicable to him of four of the units in the Scheme being Lots 10, 21, 50 and 51. The Tribunal notes the inspection includes a cross section of the units being six townhouse styled commercial units, an example of a two bedroom, a one bathroom residential unit, and two examples of a three bedroom, one bathroom unit.
The Tribunal finds that Mr Garmony prepared the Garmony Report within two years of the date of the hearing having regard to its purpose being for the assessment of unit entitlements.
He made particular reference in the Garmony Report to the range of configurations and standard of the fit-out in the Scheme lots and has taken into account the average of the fit-out extrapolated from his inspections and determined the current market value of the Scheme lots which meets the definitional requirements of capital value in accordance with s 37(3) of the ST Act, being the capital value which an estate in fee simple in the land might reasonably be expected to realise upon sale.
Having accepted the valuations in the Garmony Report the Tribunal finds as follows:
1)the unit entitlements under the Current Schedule of unit entitlements for Strata Plan 37494 are not proportionate to the capital value of each of the lots relative to the whole Scheme;
2)the unit entitlements in the Proposed Schedule are within a 5% variance, proportionate to the capital value of each of the lots relative to the whole Scheme; and
3)accordingly, if unit entitlements for the Scheme were to be allocated today, the schedule of unit entitlements on Strata Plan 37494 would require amendment in line with the Proposed Schedule.
Having taken all of the evidence into consideration the Tribunal is satisfied that it should make the Proposed Orders sought.
Orders
The Tribunal orders:
1.Pursuant to s 32(5) of the State Administrative Tribunal Act 2004 (WA), the second respondent is struck out of the proceeding.
2.Pursuant to s 38(5) of the Strata Titles Act 1985 (WA), the Tribunal authorises the schedule of unit entitlements registered in respect of Strata Plan 37494 for the property known as Westcourt West Perth at 103 Colin Street in the State of Western Australia to be amended by being deleted and replaced with the Schedule annexed hereto marked 'A'.
Schedule 'A'
Unit Entitlement Schedule
Scheme Number:
SP 37494
Scheme Address:
103 Colin Street, West Perth, WA, 6005
Lot Number
Unit Entitlement
314
5
357
6
361
8
347
9
365
10
357
11
219
12
211
13
211
14
219
15
192
16
122
17
190
18
190
19
122
20
194
21
194
22
124
23
192
24
192
25
124
26
198
27
196
28
124
29
192
30
192
31
124
32
200
33
198
34
126
35
194
36
194
37
126
38
206
39
200
40
128
41
196
42
196
43
128
44
208
45
202
46
128
47
198
48
240
49
250
50
242
51
264
52
353
Sum of all entitlements of all lots in the strata titles scheme: 10000
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS A King, MEMBER
9 SEPTEMBER 2022
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