Byrne v The Owners of Ceresa River Apartments Strata Plan 55597
[2017] WASCA 104
•8 JUNE 2017
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: BYRNE -v- THE OWNERS OF CERESA RIVER APARTMENTS STRATA PLAN 55597 [2017] WASCA 104
CORAM: MURPHY JA
MITCHELL JA
BEECH J
HEARD: 15 FEBRUARY 2017
DELIVERED : 8 JUNE 2017
FILE NO/S: CACV 50 of 2016
BETWEEN: JAMES ANTHONY BYRNE
Appellant
AND
THE OWNERS OF CERESA RIVER APARTMENTS STRATA PLAN 55597
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram :PRITCHARD J
Citation :BYRNE -v- THE OWNERS OF CERESA RIVER APARTMENTS STRATA PLAN 55597 [2016] WASC 153
File No :GDA 8 of 2015
Catchwords:
Strata titles - Permitted use of strata lots in residential apartment development - Lots in a strata scheme rented out for shortterm accommodation - Whether bylaws preclude use of lots for shortterm accommodation
Proper construction of strata lot bylaws contained in a Management Statement - Bylaws to be construed in the context of the Strata Titles Act 1985 (WA) - Whether error in construction - Whether bylaws to be construed in the context of the Residential Tenancies Act 1987 (WA) or Local Planning Scheme - Whether planning approval relevant
Words and phrases - Use - Residential - Resident - Residence - Occupancy rights - Terms of flexible meaning depending on the context
Whether a new point of law raised on appeal - Whether reference to different section in same statute as relied upon below raises a new point of law - Interests of justice for the court to entertain point
Legislation:
Residential Tenancies Act 1987 (WA), s 3, s 4, s 5
State Administrative Tribunal Act 2004 (WA), s 105
Strata Titles Act 1966 (WA)
Strata Titles Act 1985 (WA), s 3, s 3A, s 3C, s 4, s 5C, s 6, s 6A, s 25, s 32, s 35, s 37, s 42 s 42A, s 42B, s 79, s 81, s 122
Strata Titles General Regulations 1996 (WA), reg 15
Transfer of Land Act 1893 (WA, s 4, s 48, s 166
Result:
Appeal allowed in part
Category: A
Representation:
Counsel:
Appellant: Mr C P Shanahan SC & Mr A P Hershowitz
Respondent: Mr M N Solomon SC & Mr A Sharpe
Solicitors:
Appellant: JDK Legal Services
Respondent: Atkinson Legal
Case(s) referred to in judgment(s):
Australian Trade Commission v Film Funding & Management Pty Ltd (1989) 87 ALR 49
Bapson Pty Ltd v Puyeti Pty Ltd (Unreported, NSWSC, 24 May 1990, BC9002451)
Barlow v Smith (1892) 9 TLR 57
Byrne v The Owners of Ceresa River Apartments Strata Plan 55597 [2016] WASC 153
Chelsea Investments Pty Ltd v Federal Commissioner of Taxation [1966] HCA 15; (1966) 115 CLR 1
Codelfa Constructions Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337
Commissioner of Taxation v Miller [1946] HCA 23; (1946) 73 CLR 93
Davey v Savage (Unreported NSWSC, 2 August 1984, BC8411501)
Fennell v Wyong Shire Council (1975) 31 LGRA 164
Fox v Stirk & Bristol Electoral Registration Officer [1970] 2 QB 463
Genco v Salter [2013] VSCA 365; (2013) 46 VR 507
GrainCorp Operations Ltd v Liverpool Plains Shire Council [2013] NSWCA 171; (2013) 194 LGERA 83
Graysim Holdings Ltd v P & O Property Holdings Ltd [1995] 3 WLR 854
Hamersley Iron Pty Ltd v Roberts (1996) 16 WAR 52
Hamlena Pty Ltd v Sydney Endoscopy Centre Pty Ltd (1990) 5 BPR 11, 436, 11, 440
Haritos v Federal Commissioner of Taxation [2015] FCAFC 92; (2015) 233 FCR 315
Landale v Menzies [1909] HCA 48; (1909) 9 CLR 89
Livock v Suncorp Insurance & Finance [1995] 1 Qd R 206
Mackie v Henderson [2011] 1 WASC 197; (2011) 42 WAR 194
Marana Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 307; (2004) 141 FCR 299
O'Brien v Komesaroff [1982] HCA 33; (1982) 150 CLR 310
QBE Insurance Ltd v Tolomeo [1983] 3 NSWLR 274
R v The Assessment Committee of St Pancras (1877) 2 QBD 581
Radaich v Smith [1959] HCA 45; (1959) 101 CLR 209
Re Glynn; Ex Parte Royle [2003] WASCA 122
Rochester Investments Pty Ltd v Couchman (1969) 90 WN (Pt 1) (NSW) 371
Salerno v Proprietors of Strata Plan No 42724 (1997) 8 BPR 15457
Swan v Uecker [2016] VSC 313
The Australasian Temperance & General Mutual Life Assurance Society Ltd v Howe [1922] HCA 50; (1922) 31 CLR 290
The Owners of Ceresa River Apartments Strata Plan 55597 and Haines [2015] WASAT 72
The Owners of Strata Plan No 3397 v Tate [2007] NSWCA 207; (2007) 70 NSWLR 344
Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491
Western Australia v Ward [2002] HCA 28; (2002) 213 CLR 1
Westfield Management Ltd v Perpetual Trustee Co Ltd [2007] HCA 45; (2007) 233 CLR 528
White v Betalli [2006] NSWSC 537; (2006) 66 NSWLR 690
Willmott Growers Group Inc v Willmott Forests Ltd [2013] HCA 51; (2013) 251 CLR 592
REASONS OF THE COURT: This is an appeal from the decision of Pritchard J delivered on 20 May 2016 in Byrne v The Owners of Ceresa River Apartments Strata Plan 55597[1] (primary decision). That decision concerned an appeal from the decision of the State Administrative Tribunal (the Tribunal) in The Owners of Ceresa River Apartments Strata Plan 55597 and Haines[2] (Tribunal decision).
[1] Byrne v The Owners of Ceresa River Apartments Strata Plan 55597 [2016] WASC 153.
[2] The Owners of Ceresa River Apartments Strata Plan 55597 and Haines [2015] WASAT 72.
The appeal concerns the proper construction of a by-law in relation to a strata lot.
The appellant (Mr Byrne) is, together with his wife, the registered proprietor of a strata lot, lot 14, in a residential development in Rivervale. The respondent is the strata company for the development (the strata company).
The strata company took proceedings against Mr Byrne and certain other strata lot proprietors, alleging that they had used their lots for 'short‑stay accommodation', contrary to by‑law 16 of the strata scheme. The Tribunal found as a fact that Mr Byrne and the other respondents before the Tribunal had rented 'their respective lots out for purposes of short‑stay accommodation'.[3] According to the primary judge there was undisputed evidence before the Tribunal that Mr and Mrs Byrne 'had offered to rent out [their lot] for periods as brief as four days, and Mr and Mrs Byrne admitted that they had accepted bookings for [their lot] "for short‑term accommodation"'.[4]
[3] Tribunal decision [14].
[4] Primary decision [6] (footnote omitted).
The Tribunal found in favour of the strata company, and made orders including an order to the effect that Mr Byrne, and the other respondents before the Tribunal, be restrained from utilising their lots for 'short‑stay accommodation'. Mr Byrne appealed the Tribunal decision. Justice Pritchard granted leave to appeal, but dismissed the appeal. Mr Byrne has now appealed to this court against the primary decision.
Background
The registration of the strata plan
On 14 July 2008, strata plan 55597 was registered pursuant to the Strata Titles Act 1985 (WA) and the strata scheme known as 'The Owners of Ceresa River Apartments Strata Plan Number 55597' was created (Ceresa River strata plan).[5] The strata development is a 113‑lot scheme in the City of Belmont, comprising 113 'residential apartment dwellings'.[6]
Mr and Mrs Byrne's purchase of lot 14
[5] GB 30.
[6] GB 16.
On 8 November 2010, Mr and Mrs Byrne purchased lot 14 in the Ceresa River strata plan as joint tenants.[7]
The City of Belmont Local Planning Scheme No 15
[7] Amended appellant's chronology, No 4; WB 51.
The City of Belmont Local Planning Scheme No 15 (Local Planning Scheme) came into operation on 1 December 2011 pursuant to the Planning and Development Act 2005 (WA). Its purposes include, amongst other things, to zone land within the Scheme Area for the purposes defined in the Scheme, and to control and guide land use and development within the Scheme Area: cl 1.5(d) and cl 1.5(c). The Scheme Area covers, in effect, the City of Belmont: cl 1.3.
The zoning and use of land is set out in Part 4 of the Local Planning Scheme. The Local Planning Scheme provides for nine zones. These include a 'Mixed Use Zone'. Clause 4.2 provides that the objective of the 'Mixed Use Zone' is to allow for the development of a mix of varied but compatible land uses, such as housing, offices, showrooms, amusement centres, eating establishments, and appropriate industrial activities, which do not generate nuisances detrimental to the amenity of the district or to the health, welfare and safety of its residents.
A 'Zoning Table' appears under cl 4.4 of the Local Planning Scheme. The table indicates, subject to the provisions of the Local Planning Scheme, the uses permitted in the various zones: cl 4.3.1. By cl 4.4.1, where a specific use is mentioned in the Zoning Table, it is deemed to be excluded from the general terms to describe any other use.
Certain uses are not permitted in certain zones unless the local government has granted planning approval: cl 4.3.2. By cl 10.3, the local government may grant its approval with or without conditions, or may refuse to grant its approval.
The parcel of land in the Ceresa River strata plan is within a 'Mixed Use' zone.[8] The parcel was approved for 'Multiple Dwelling'. That term is defined in the Residential Design Codes.[9]
[8] Tribunal decision [4]; primary decision [13].
[9] Clause 1.7.1 of the Local Planning Scheme provides that on the terms therein specified, words and expressions used in the Scheme have the same meaning as they have in the Residential Design Codes.
The primary judge observed that it was an admitted fact that under the Residential Design Codes:[10]
Multiple dwelling means a dwelling in a group of dwellings on a lot where any part of the plot ratio area of a dwelling is vertically above any part of the plot ratio area of any other but:
•Does not include a grouped dwelling; and
•Includes any dwellings above the ground floor in a mixed use development.
[10] Primary decision [13].
Under the Residential Design Codes, the following definitions also appear:[11]
(a)Dwelling means a building or a portion of a building being used, adapted, or designed or intended to be used for the purpose of human habitation on a permanent basis by a single person, a single family, or not more than 6 persons not comprising a single family.
(b)Mixed use development means buildings that contain commercial and other non-residential uses in conjunction with residential dwellings in a multiple dwelling configuration.
[11] Primary decision [13].
In a Mixed Use zone, 'serviced apartments' are not permitted without planning approval. In that regard, the judge also observed that it was an admitted fact that under the Local Planning Scheme:[12]
(a)serviced apartment means an independent living residential unit providing for short stay accommodation;
(b)short stay accommodation means the accommodation of short stay guests providing on site facilities for the convenience of guests and management of the development, where occupation by any person is limited to a maximum of 3 months in any 12 month period, and excludes any other use falling within a use class specifically defined in this scheme.
Change of use for lot 14
[12] Primary decision [13].
On 23 May 2013, the City of Belmont approved a change of use for lot 14 from 'Multiple dwelling' to 'serviced apartment' under the Local Planning Scheme (lot 14 planning approval). The lot 14 planning approval noted that it did not negate the need to obtain other approvals, including approvals from the strata company. In that regard, the 'footnotes' to the planning approval included:[13]
The issuance of planning approval does not negate the need for the owner and/or applicant to seek all other approvals. You may also require approval under the Strata Titles Act 1985 from any relevant strata company or other strata lot owners.
The by-laws
[13] GB 22.
Management statement K654715 (Management Statement) was registered on the Ceresa River strata plan pursuant to s 5C of the Strata Titles Act. The Management Statement repealed all of the by-laws in sch 1 and sch 2 to the Strata Titles Act, which would otherwise have been deemed to apply to the proprietors of the lots, and set out the by-laws that were to have effect.[14]
[14] Primary decision [10].
The by-laws included, relevantly, by‑law 16. Material terms of the by‑laws are set out in full later in these reasons. At this point, it is sufficient to note that cl 16 includes the following:[15]
16.Use of Premises
16.1Subject to the Schedule 1 bylaw 16 a proprietor of a residential lot may only use his lot as a residence.
16.2Notwithstanding bylaw 16.1 a proprietor of a residential lot may:
16.2.1grant occupancy rights in respect of his lot to residential tenants.
[15] Primary decision [11].
On 4 October 2010, Notification L444294 was recorded on the strata plan, which contained sch 2 by-law 1 (short-term use by-law). The short‑term use by-law was in the following terms:[16]
1.Short-term Use
In this by-law the term 'Short-term Use' means the use of a proprietor's Lot for occupancy as short-term temporary or holiday accommodation for periods of less than three (3) months.
Subsequently to the adoption of the by-law no proprietor shall change the use of his or her Lot to use or allow to be used his or her Lot for Short-term use as herein defined or for any commercial use without first obtaining the consent of the Strata Company pursuant to a Special Resolution.
[16] Primary decision [14].
The reference to the short-term use by-law is included to complete the factual narration, but it has no significance for the disposition of the appeal. At the hearing of the appeal before the primary judge, it was not in dispute that Mr Byrne had applied for an order, not disputed by the strata company, declaring that the short‑term use by‑law was invalid, effectively on the grounds that it had not been passed pursuant to the requisite resolution. The Tribunal had made an order to that effect.[17]
[17] Primary decision [15].
The proceedings in the Tribunal and the Tribunal's decision
Relief sought by the strata company
The strata company sought orders in the Tribunal in the following terms:[18]
(1)An order under s 83(1) Strata Titles Act 1985 (WA) that the [respondent proprietors] shall refrain from advertising that their lots are available for let, lease or occupation on any other basis, for a term of less than 3 months in any 12 month period.
(2)An order under s 83(1) Strata Titles Act 1985 (WA) that the [respondent proprietors] shall refrain from entering into any letting agreement, leasing agreement or any agreement conferring a right to occupy those lots, for a term of less than 3 months in any 12 month period.
(3)An order under s 81(10) Strata Titles Act 1985 (WA) declaring that Orders (1) and (2) shall not cease to have any force and effect 2 years after the making of these orders.
(4)An order under s 95(3)(a) of the State [Administrative] Tribunal Act 2004 (WA) declaring that orders (1) and (2) are orders to which s 95(1) of the State [Administrative] Tribunal Act 2004 (WA) applies.
The Tribunal's decision
[18] WB 53A.
The Tribunal's summary of decision commenced with the observation that the strata company had 'sought an order for the respondents to cease renting their lots for the purposes of short-stay accommodation'.
Relevantly for present purposes, the Tribunal found that the use of the words 'residence' and 'residential tenants' in by-law 16 refers to the 'intent with which a lot is occupied', and that they are not used 'to distinguish between any form of residential and other forms of usage such as industrial or commercial'.[19] The Tribunal evidently regarded the relevant 'intent' as an 'intent to stay for an extended period'.[20]
[19] Tribunal decision [25].
[20] Tribunal decision [35].
The Tribunal concluded:[21]
In short, there is a thread that runs through the strata scheme that gives meaning and content to the words 'residence', 'occupancy rights' and 'residential tenant'. The thread is that:
…
e)the only ordinary, objective meaning that can reasonably be given to the words 'residence' and 'residential tenant' is that of an occupant who demonstrates the intention to reside at the lot for an extended or substantial period of time; who makes the lot his address; who intends to call the lot 'home' and to make the lot his abode.
[21] Tribunal decision [38].
The Tribunal's orders
The Tribunal made orders including order 2 in the following terms:[22]
The respondents [including Mr Byrne] shall not utilise their respective lots for short-stay accommodation since such a use is inconsistent with and unauthorised by By-law 16 of the strata scheme. (emphasis added)
[22] BB 49.
The Tribunal did not define 'short-stay accommodation' for the purpose of this order. However, the Tribunal's reasons appear to proceed on the basis that 'short‑stay accommodation' means 'short‑stay accommodation' within the meaning of that term in the Local Planning Scheme.[23] That appears to be confirmed by the orders sought by the respondent before the Tribunal, which appear to have been drafted with the definition of 'short‑stay accommodation' in the Local Planning Scheme in mind.
[23] Tribunal decision [1], [5], [7], [8], [14], [38(c)].
In the context of the Tribunal's reasons, order 2, relevantly for this appeal, prohibits Mr Byrne from using lot 14 for occupation by any person for less than three months in any 12‑month period. It is sufficiently broad to preclude Mr Byrne from leasing lot 14 for occupation by any person for less than three months in any 12‑month period.
Primary decision
Mr Byrne commenced an appeal against the Tribunal decision pursuant to s 105 of the State Administrative Tribunal Act 2004 (WA). The judge granted him leave to do so, but dismissed the appeal.
As noted earlier, the judge observed that there was undisputed evidence before the Tribunal that in the case of Mr and Mrs Byrne, they had rented out lot 14 for periods as brief as four days, and admitted that they had accepted bookings for 'short‑term accommodation'. Her Honour said that she 'approached any references to "short‑term accommodation" or "short‑stay accommodation" in the [Tribunal's] reasons and in the [Tribunal's] Orders as encompassing the grant of a right to occupy Lot 14 for accommodation for periods as brief as four days'.[24]
[24] Primary decision [6].
The three grounds of appeal before the primary judge were as follows:[25]
[25] Primary decision [16].
1.The learned member … erred in law in determining that short-stay accommodation was inconsistent with, and unauthorised by, the By-Laws of the Stata Scheme ('By‑Laws'), in that the learned member:
(1)Misconstrued the Stata Titles Act 1985 ('ST Act') in construing that it did not assist in construing the terms 'residence', 'occupancy rights' or 'residential tenants' appearing in the By-Laws ('Terms').
(2)Misconstrued the terms of the Residential Tenancies Act 1987 ('RT Act') to conclude that s 5(2)(e) of the RT Act specifically excluded from the definition of 'residence' or 'residential' in that Act, any accommodation occupied for the purposes of a holiday (or short-term accommodation).
(3)Selected a meaning of each of the Terms that was inconsistent with the terms of the By-Laws read as a whole within the context of the ST Act.
(4)Failed to approach construction of the Terms on the basis that the By-Laws were subsidiary legislation, and
(5)Failed to approach the construction of the Terms on the basis that they are each technical legal terms, terms that are, absent clear words to the contrary, to be construed consistently with cognate legislation.
2.In the alternative if the correct approach was to construe the Terms as if they were not subsidiary legislation, the learned member nevertheless erred in selecting preferred meanings for the Terms without regard to the statutory framework under which By-Law 16 was made, and the Appellant repeats Grounds 1(1), 1(2), 1(3) and 1(5).
3.Further in the alternative if the correct approach was to construe the terms used in the By-Laws as if they were ordinary words not legal technical terms, the learned member nevertheless erred in selecting preferred meanings for those Terms without regard to the statutory framework under which By-Law 16 was made, and the Appellant repeats Grounds 1(1), 1(2) and 1(3).
Before addressing the grounds of appeal, the primary judge first considered the principles of construction which were to be applied to the by‑laws. Mr Byrne submitted that the by-laws should be regarded as delegated legislation, and, accordingly, that the principles of statutory construction applied. Alternatively, he submitted that they should be regarded as a 'statutory contract', and that the principles of contractual interpretation would apply. In any event, he submitted that this question of characterisation was, in effect, unnecessary as the outcome would ultimately be the same. Counsel for the strata company agreed in this respect.[26]
[26] Primary decision [43] ‑ [44].
The primary judge disagreed, and said that it was necessary to characterise the by-laws with a view to identifying the appropriate principles of construction that should be applied.[27] Her Honour found that the by‑laws were properly characterised in the nature of a statutory contract.[28]
[27] Primary decision [46] ‑ [47].
[28] Primary decision [61], [71].
Her Honour accepted as being relevant to the question of construction the principles outlined by McColl JA in The Owners of Strata Plan No 3397 v Tate.[29] Drawing on those principles, and having regard to s 42(1) of Strata Titles Act, her Honour said that the principles to be applied to the construction of the by‑laws in the present case were, subject to four qualifications, the ordinary principles of contractual construction.[30]
[29] The Owners of Strata Plan No 3397 v Tate [2007] NSWCA 207; (2007) 70 NSWLR 344.
[30] Primary decision [75].
The first qualification is that, to the extent that their terms permit, the by‑laws should not be construed so that they are inconsistent with the Strata Titles Act: s 42(1). The second qualification is that, as compared to recourse to surrounding circumstances for the purposes of contractual interpretation, a 'tight rein' may be needed to be kept on what should count as surrounding circumstances when construing by-laws. The third qualification is that the statutory context of the by-laws should be taken into account for the purpose of construing those by-laws. The final qualification is that, unlike commercial contracts, there is no basis for saying that by-laws should be interpreted as a business document with the intention that they be given business efficacy. This does not, however, mean that by-laws may not have a commercial purpose, and be interpreted accordingly, but due regard must be had to the statutory context in so doing.[31]
[31] Primary decision [76] - [79].
Accordingly, the judge said that the Tribunal erred insofar as it regarded the principles of statutory construction as applicable to the proper construction of the by‑laws.[32] However, her Honour said that the Tribunal's erroneous approach to construction was not a 'vitiating error'.[33] Her Honour found that, on the application of the relevant principles, the Tribunal was correct in finding that the use of the lots for purposes of short-stay accommodation is not authorised under by-law 16.
[32] Primary decision [95].
[33] Primary decision [96].
In so finding, her Honour rejected Mr Byrne's arguments, summarised by her Honour as follows:[34]
[34] Primary decision [98] - [106].
There were essentially three planks to the argument advanced in support of this ground.
The primary argument advanced by counsel for Mr Byrne in support of this construction was that the [Strata Titles] Act applied the phrase 'proprietor, occupier or other resident of a lot' as a 'genus' to describe all of the persons affected by the by-laws of a strata company, namely a genus of all persons with a right to occupy the lots, and that those persons were all 'residents'. …
Counsel for Mr Byrne noted that the term 'proprietor' (and 'original proprietor') was defined in the [Strata Titles] Act, as was the term 'occupier'. He submitted that in the phrase 'proprietor, occupier or other resident' the meaning of the word 'residents' must include 'occupiers' because the term 'other residents' included 'occupiers'. Counsel for Mr Byrne submitted that the concepts of occupancy and residence were thus equated in the [Strata Titles] Act. He submitted that the term 'occupier' was a technical term and when used in By-Law 16 it had to be used with the same meaning it had in the [Strata Titles] Act, and that the term 'residence' in By-Law 16 had to be construed 'through the prism of the definition of occupier'. He submitted that an 'occupier' - a person in lawful occupation of a lot - need not have any subjective intention regarding the use of the lot to make that occupation lawful, so that a person occupying a lot only for a short-stay could still lawfully occupy the lot.
Counsel for Mr Byrne then submitted that because the terms 'resident' and 'occupier' in the [Strata Titles] Act could be equated, both a resident and an occupier would need to have the subjective intent identified by the learned Member (that is, a subjective intention to make a unit in a strata/survey-strata plan their permanent place of abode). He submitted that the result would be that the [Strata Titles] Act and the default by-laws would not apply to lawful occupants of lots who did not have that subjective intention, nor to those legally entitled to possession but who were not occupants of a lot who also did not have that subjective intention. …
The second plank of the argument advanced by counsel for Mr Byrne was that the [Strata Titles] Act used the term 'residential' to identify the type of use of a lot and not the intent or duration of that use. In support of that submission, counsel for Mr Byrne pointed to s 42(14) of the [Strata Titles] Act.
Counsel for Mr Byrne contended that the term 'residential' in that subsection was used to describe the type of use to which a lot is put, and not the intention of the occupier of the lot. He submitted that the learned Member's construction of the term 'residence' in By-Law 16 was contrary to the meaning of 'residential' in s 42(14) of the [Strata Titles] Act.
Counsel for Mr Byrne also submitted that the learned Member erred in concluding that the second reading speech for the [Strata Titles] Act did not assist in the interpretation of By-Law 16. He noted that in the Second Reading Speech for the Strata Titles Bill 1985, the Attorney General stated that the Bill 'facilitates the multiple ownership of individual parcels of land for both residential and commercial purposes'. Counsel for Mr Byrne submitted that this indicated that the Bill contemplated that the meaning of the 'residential' use of land was to be contrasted with that of the 'commercial' use of land. Counsel for Mr Byrne submitted that 'residence' should therefore be construed to mean 'non-commercial use'. Counsel for Mr Byrne submitted that the meaning of 'residence' which ran through the [Strata Titles] Act, the default by-laws and the By-Laws in this case was that 'residency':
'means non-commercial use because if it did not the by-law would be unenforceable and the provisions of the ST Act as they relate to "proprietor, occupier or other resident of a lot" would be unintelligible.'
The third way in which counsel for Mr Byrne submitted that the [Strata Titles] Act was of relevance to the construction of By-Law 16.1 relied on s 6(1) of the [Strata Titles] Act. That subsection permits a strata plan to delineate an area in which a particular use is restricted, but to the extent that the proposed restriction would limit the powers of the local government, s 6(1), s 6(1A), s 6(3) and s 6(3a) of the [Strata Titles] Act make it clear that such restriction would only be 'legally effective if approved by the relevant local government'. Counsel for Mr Byrne submitted that if 'residence' in the By-Laws were construed to refer to a permanent place of abode, By-Law 16 would be ultra vires on the basis 'that it seeks primacy over the powers of the local government authority to grant a development approval to permit short-stay accommodation'.
Counsel for Mr Byrne submitted that the [Strata Titles] Act and the default by-laws:
'[anticipated] the Applicant's business of letting a lot on a short stay basis where that use has been approved by the local authority. Such "occupants" are "residents" for the purposes of the [Strata Titles] Act, and that is expressly recognised in the phrase … "proprietor, occupier or other resident of a lot". (original emphasis) (footnotes omitted)'
Her Honour concluded:[35]
Unlike the words 'proprietor' and 'occupier', the word 'resident' is not defined in the [Strata Titles] Act. On its ordinary meaning, the term 'resident' has the same meaning given to it by the learned Member, that is, it refers to a person who makes a lot his or her permanent place of abode.
…
Nothing in the use of the term 'other resident' or 'residential purposes' in the [Strata Titles] Act prohibits a strata company from making by-laws which deal with the question of whether a registered proprietor may grant a right of occupancy only to a person who will be a 'resident' (that is, a person for whom the lot will be their home or their permanent place of abode). And nothing in the provisions of the [Strata Titles] Act in which the term 'resident' is used suggests that there would be any inconsistency between those terms and By-Law 16.1 as construed by the learned Member. (footnote omitted)
[35] Primary decision [112], [119].
The appeal and grounds of appeal
There are three grounds of appeal, which are to the following effect.
Ground 1 alleges that the judge erred in law in construing by-law 16 when her Honour accepted that, on its proper construction, by-law 16 precludes Mr Byrne's use of his lot to provide short-stay accommodation, and she 'endorsed' the orders of the Tribunal. Mr Byrne contends that:
(1) the construction favoured by the judge is precluded by s 42(3) of the Strata Titles Act;
(2) her Honour relied on the intention of the occupiers in entering short-stay accommodation, which intention could only be relevant to the application, not the construction, of by-law 16;
(3) the judge erred in her construction of by‑law 16:
(a)in that as a matter of law any short-stay accommodation agreement entered into by Mr Byrne for 3 months or less for the purpose of a 'holiday' is a 'residential tenancy agreement' as defined in s 3 of the Residential Tenancies Act 1987 (WA); and
(b)in that she failed to take into account the legislative context, including the Stata Titles Act, the Strata Titles Regulations, the Residential Tenancies Act and the terms and operation of the Local Planning Scheme.
Ground 2 alleges that the judge erred in law in the process of construing terms used in by-law 16, namely 'residence', 'residential tenants', 'occupier', 'occupation' and 'occupation rights'. It is alleged that her Honour so erred, in effect:
(1)by starting from the ordinary meaning of those terms viewed in their context, when any construction of a by-law must, pursuant to s 42(1) of the Strata Titles Act, start by attributing to such terms a meaning not inconsistent with the use of such terms in the Strata Titles Act;
(2)rejecting the proposition that terms used in by-law 16 were legal technical terms and therefore not amenable to her Honour's starting position;
(3)by failing correctly to apply s 42(1) of the Strata Titles Act, which requires a determination as to whether such a by-law is inconsistent with the Strata Titles Act, and not whether the 'operation' of a by-law is inconsistent with the Strata Titles Act; and
(4)by focusing on the language used in by-law 16.1 and 16.2.1, and failing to have proper regard to the significance of the language used in the balance of by-law 16.
Ground 3 alleges, in the alternative, that the judge erred in law by endorsing the Tribunal's orders but failing to make a substitutive order clarifying the meaning of 'short stay accommodation' for the purpose of order 2 of the Tribunal's orders. It is contended that, without clarification, the operation of order 2 remains uncertain.
Senior counsel for Mr Byrne submits that this case is solely about the construction of by-law 16, and that Mr Byrne does not challenge the validity of the by-law.[36] Mr Byrne proceeded on the basis that the by‑laws are to be construed as a statutory contract.
[36] Appellant's amended submissions, pars 1, 3; WB 7; Appeal ts 3, 7.
The strata company also proceeded on that basis. In general terms, the strata company, in its submissions, relied on arguments which had found favour in the primary proceedings and in the Tribunal proceedings.
The strata company also submitted that Mr Byrne's reliance on s 42(3) of the Strata Titles Act is a point which had not been raised in the primary court or in the Tribunal. The strata company did not contend that this court did not have the power to permit a new question of law to be raised on an appeal from a primary judge's decision in an appeal on a question of law pursuant to s 105 of the SAT Act.[37] Nevertheless, the strata company submitted that the discretion to permit a new point of law to be raised on appeal should not be exercised in this matter. The strata company contends that ground 1(1), with its reference to s 42(3) of the Strata Titles Act, 'impermissibly seeks the determination of a point of law in respect of a matter that involves a factual enquiry that was neither raised nor determined'.[38] In particular, the strata company says that Mr Byrne did not seek a factual finding in the Tribunal that a lease or other 'dealing' had been created in respect of any short‑stay accommodation in his apartment, and no factual finding to that effect was made.[39] The strata company also says that Mr Byrne could have raised the argument in relation to s 42(3) in the Tribunal, and 'sought the necessary factual findings' and, accordingly, it would be contrary to the interests in the finality of litigation to remit the matter to the Tribunal for further evidence to be adduced on that question.[40]
Whether s 42(3) of the Strata Titles Act can be raised in the appeal
[37] Respondent's supplementary submissions, par 19. Reference was made, by analogy, to the observations in Haritos v Federal Commissioner of Taxation [2015] FCAFC 92; (2015) 233 FCR 315 [62(9)].
[38] Respondent's supplementary submissions, par 28.
[39] Respondent's supplementary submissions, par 34.
[40] Respondent's supplementary submissions, par 40.
It is convenient at this point, before turning to the substantive questions raised in the appeal, to consider the strata company's contention that Mr Byrne cannot rely on s 42(3) for the purposes of his arguments in this appeal.
As noted earlier, the strata company had sought orders including orders to the effect that the respondents before the Tribunal be restrained from entering into any 'letting agreement, leasing agreement or any agreement conferring a right to occupy … lots, for a term of less than 3 months in any 12 month period'.
The Tribunal summarised the respondents' (including Mr Byrne's) arguments in the Tribunal as follows:[41]
The respondents said that the use of the words 'residence' and 'residential tenants' do not exclude the lots being used for purposes of short‑stay accommodation. The respondents said the relevant by‑law had to be interpreted within the context of the Strata Titles Act 1985 (WA), the relevant by‑laws and the ordinary meaning of the word. If that is done, the respondents say, it must be found that short‑stay accommodation, regardless of the duration of the stay, is a consistent use under the relevant by‑law because it is a form of 'residence'.
[41] 'Summary of Tribunal's decision' in Tribunal decision page 2.
Although it appears that Mr Byrne did not refer specifically to s 42(3) of the Strata Titles Act in the Tribunal or the primary court, his case was, in substance, that the Strata Titles Act, properly construed, precluded the Tribunal from making orders of the kind sought by the strata company in the Tribunal proceedings.
Section 42(3) is but one provision in the relevant statute which, according to Mr Byrne, was to be brought to bear on the proper construction of by‑law 16. In this context, it may be doubted that the reference to this particular provision, in itself, raises a new point of law for the purpose of the principle that a party may only exceptionally be permitted to depart from its case below and raise a new point on appeal.[42] Even if reference to s 42(3) of the Strata Titles Act were to be regarded as a new point which could only be raised in exceptional circumstances, it is in the interests of justice in this particular case for the court to entertain the point.[43] That is because the point merely supplements the arguments referable to the question of law as to the proper construction of by‑law 16, in the context of the Strata Titles Act properly construed; the strata company has addressed the point on its merits; the point has been incorporated into the debate in the appeal without interfering with the orderly conduct of the appeal; and a consideration of the point will not lead to any remitter to the Tribunal for further fact‑finding.
[42] See, for example, Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491, 497.
[43] Moustakas (497).
Appellant's submissions
In relation to the principles to be applied to the question of construction, Mr Byrne, in general terms, appeared to accept the statement of the principles outlined by McColl JA in Tate, save to the extent otherwise indicated in the submissions referred to below.[44]
Ground 1
[44] Appellant's amended submissions, pars 93 - 102; WB 22 - 23.
The submissions of Mr Byrne in respect of ground 1(1) focus on s 42(3) of the Strata Titles Act, which senior counsel for Mr Byrne says disposes of the appeal.[45] It is submitted that s 42(3) deals with the 'operation' of a by-law, and precludes any by-law made under s 42(1) seeking to prohibit or restrict a proprietor's right to lease his or her lot for any lawful purpose, including short‑stay accommodation.[46]
[45] Appellant's minute of reply, par 3; also see appeal ts 2, 21
[46] Appellant's amended submissions, pars 69, 78; WB 19-20. Also see appeal ts 52.
Mr Byrne submits, in effect, that order 2 of the Tribunal's orders purports to restrict devolution of lots for a particular use, including devolution by way of a lease for short stay accommodation. He contends that such rights are preserved by s 42(3) of the Strata Titles Act from restriction by any by-law.[47] Reference is made in this regard to a report by the Western Australian Law Reform Commission into the terms of the original Strata Titles Act 1966 (WA).[48] In particular, Mr Byrne refers to the following passage at pars 16.1 ‑ 16.2 of that report:
The existing legislation imposes no restriction on the right of a proprietor to lease his lot. It also imposes no restriction on the right of a proprietor to permit others to occupy or reside in the lot … The Act, in fact, specifically provides that no by‑law, or addition to, amendment or repeal of a by‑law is capable of operating so as to prohibit or restrict any lease of, or other dealing with, a lot. This provision is consistent with the underlying concept of the strata title system that each strata lot should be able to be dealt with in the same manner as ordinary freehold land.
[47] Appeal ts 10 ‑ 11, 13 ‑ 14.
[48] Appellant's amended submissions, par 64; WB 18; Appeal ts 14 ‑ 15.
Mr Byrne submits that, by virtue of s 42(1), a by-law cannot be inconsistent with the Strata Titles Act, and that, accordingly, by-law 16 must not be construed inconsistently with s 42(3) to restrict the leasing of lot 14.[49] Mr Byrne also says, in effect, that 'other dealings' would encompass a licence, by which short-stay accommodation may be granted, although they do not need to succeed on that argument.[50]
[49] Appellant's minute of reply, pars 4 ‑ 6.
[50] Appeal ts 28.
Mr Byrne seeks to draw upon in aid of this argument, s 49(1) of the Strata Schemes Management Act 1996 (NSW) (now repealed) and s 139(2) of the Strata Schemes Management Act 2015 (NSW), as well as a 2016 report of the Legislative Assembly of New South Wales.[51] Section 49(1) of the NSW Act is in broadly similar terms to s 42(3) of the Strata Titles Act. In the report to the NSW Legislative Assembly, to which Mr Byrne refers,[52] the Committee on Environment and Planning noted a submission by the NSW government as follows:[53]
The Strata Schemes Management Act 1996 provides that, no by‑law is capable of operating to prohibit or restrict the devolution of a lot or a transfer, lease, mortgage, or other dealing relating to a lot. The NSW Government indicated that '[t]his means that an owners' corporation cannot seek to restrict a lot owner from offering short‑term accommodation in the owner's lot'. (footnotes omitted)
[51] Appellant's minute of reply, pars 7 ‑ 13.
[52] Legislative Assembly Committee on Environment and Planning, Adequacy of the Regulation of Short‑Term Holiday Letting in New South Wales, Report 1/56 - October 2016 (Report).
[53] Report, par 3.101.
Mr Byrne further submits that a reasonable person would understand the by-laws to use the word 'residential' in a manner not inconsistent with the strata plan and the Local Planning Scheme, 'as planning approvals given by the City [of Belmont] go to the use to which a lot may lawfully be put, and any other construction would be absurd, repugnant or capricious'.[54] He also submits that, to the extent it may be relevant, the intention with which a lot is occupied is to be derived from the parties' intentions as evident in their occupancy agreement, and it is not the intention of the occupier inferred from the length of the term.[55] It is alleged that her Honour should have concluded that the Tribunal erred in primarily relying on 'the inferred changeable intention of an occupier'.[56] Mr Byrne submits, in effect, that when regard is had to its context, 'residence' means 'occupancy of a residential lot for a period - a lawful occupancy [of a] lot for a period'.[57] Mr Byrne contends that any 'accommodation' or 'habitation' is a 'residential' use, including 'short stay accommodation'.
[54] Appellant's amended submissions, par 27; WB 12; also see appeal ts 48.
[55] Appellant's amended submissions, par 16; WB 10.
[56] Appellant's amended submissions, par 21; WB 11.
[57] Appeal ts 55.
In relation to ground 1(3), senior counsel for Mr Byrne says that an occupancy agreement for a short stay holiday under by-law 16.2.1 specifically falls within the definition of 'residential tenancy agreement' in s 3 of the Residential Tenancies Act because of the terms of s 5 of the Residential Tenancies Act.[58]In this regard, reference is also made to s 5(2) and s 5(4) of the Residential Tenancies Act.[59]
[58] Appellant's amended submissions, par 31; WB 13.
[59] Appellant's amended submissions, pars 31 - 34; WB 13.
It is submitted that the combined operation of by-laws 16.2.1 and 16.4 reflect the provisions of the Residential Tenancies Act, and in particular s 3 ‑ s 5.[60] Mr Byrne says that the occupancy rights referred to in by-laws 16.2 and 16.4 would be 'residential tenancy agreements' for the purposes of the Residential Tenancies Act, and therefore that Act is relevant to the task of construing by-law 16, not because it is picked up by the Strata Titles Act, but simply because as a matter of law the Residential Tenancies Act describes the nature of occupancy rights such as those covered by by-laws 16.2 and 16.4.[61]
[60] Appellant's amended submissions, par 41; WB 15.
[61] Appeal ts 36.
No written submissions appear to have been specifically directed towards ground 1(3)(b). The ground, in essence, concerns whether the judge failed to take into consideration the relevant statutory context in construing by‑law 16. This issue appears to, at least in part, find expression in the submissions in support of ground 2.
Ground 2
In written submissions, Mr Byrne contended that a 'starting proposition must be that by‑laws cannot be construed to have an unlawful effect'.[62]
[62] Appellant's amended submissions, par 85; WB 21.
In oral submissions, senior counsel for Mr Byrne explained that the general proposition in relation to ground 2 is that by-laws must be construed in their statutory context, including in the context of the provisions of the Local Planning Scheme. Relevantly, the Local Planning Scheme makes provision for applications for approval for land uses and, in this case, that approval was granted in the form of the lot 14 planning approval. The lot 14 planning approval provided that the issuance of planning approval did not negate the need for the owner to seek all other approvals, including approvals under the Strata Titles Act from the strata company (approval caveat). This, it is said, means that a valid by-law can be made that controls how lot owners grant occupancy rights for short-stay accommodation, but it cannot preclude the right of a lot holder to devolve his or her lot for that purpose. It is submitted that this extends to the grant of a license. It is also said that the approval caveat, in effect, finds expression in the by-laws through by-law 16.4.[63]
Ground 3
[63] Appeal ts 25 ‑ 27.
In relation to ground 3, senior counsel for Mr Byrne submits that the words 'short-stay accommodation' in order 2 can, in effect, be construed in two alternative ways and therefore the order is flawed and uncertain. First, the words may have no specific meaning, such that they could mean anything and the subject of the prohibition is unknown. Secondly, the words may have the meaning attributed to them in the Local Planning Scheme, and thus mean a prohibition against occupation by any person limited to a maximum of 3 months in any 12‑month period.[64]
[64] Appeal ts 18 ‑ 19.
The Strata Titles Act
Both parties accepted that by‑law 16 was to be construed in the context of the Strata Titles Act, to which it is convenient now to turn.
Summary of material provisions
The long title of the Strata Titles Act provides that it is 'an Act to facilitate the horizontal and vertical subdivision of land and the disposition of titles thereto, to provide for incidental and connected purposes and to repeal the Strata Titles Act 1966'.
Section 3 of the Strata Titles Act contains a number of definitions which apply unless a contrary intention appears. They include 'land', 'lot', 'parcel', 'proprietor', 'strata plan', 'Register', 'Registrar of Titles', and 'strata scheme'. The word 'land' is defined as land that is under the operation of the Transfer of Land Act 1893 (WA) (TLA) and held by the registered proprietor of the land in fee simple. The word 'proprietor' means a person who is, for the time being, registered under the TLA as proprietor of an estate in fee simple or an estate for life in a 'lot'. A 'lot' is defined to mean, in relation to a strata scheme, (in general terms) the lot created by the strata scheme. The term 'Registrar of Titles' means the person who is Registrar of Titles under the TLA. 'Parcel' is defined as the land comprised in a strata/survey plan, and a 'strata plan' has the meaning given in s 4(1a).
The word 'Register' has the meaning given by the TLA. Under s 4 of the TLA, 'Register' means the 'Register' referred to in s 48 of the TLA. Section 48 of the TLA provides, relevantly, for the Register to comprise all registered certificates of title.
The term 'strata scheme' is defined in s 3 of the Strata Titles Act to mean:
(a)the manner of division, from time to time, of a parcel into lots or into lots and common property under a strata plan and the manner of the allocation, from time to time, of unit entitlements among the lots; and
(b)the rights and obligations, between themselves, of proprietors, other persons having proprietary interests in or occupying the lots and the strata company, as conferred or imposed by this Act or by anything done under the authority of this Act and as in force from time to time;
By s 4(1) of the Strata Titles Act, land may be subdivided into lots, or lots and common property, by the registration of a strata plan. By s 4(1a), a strata plan is a plan described as such, which shows the whole, or any part, of the 'land' as being divided into two or more lots, and which complies with s 5.
Section 4(2) provides that where a strata plan is registered, any number of lots in the plan 'may devolve or be transferred, leased, mortgaged or otherwise dealt with in the same manner and form as land held under the provisions of the [TLA]'. The italicised words and similar or cognate expressions also appear in s 4(6) and s 42(6). Their meaning is discussed in [86] ‑ [87] below.
Section 4(3) provides that the registration of a strata plan is deemed to be embodied in the 'Register' under the TLA, and a proprietor shall hold his lot and share in the common property subject to, relevantly, any interests notified on the registered strata plan, and any amendments to lots or common property shown on the strata plan. Section 4(4) provides, in effect, that after a strata plan is registered, the Registrar of Titles (under the TLA) may create and register a separate certificate of title for each lot together with the share of common property appurtenant to that lot.
Section 4(6) provides:
Subject to this section, any transfer, lease, mortgage or other dealing affecting a lot has the same effect in relation to the lot as a similar dealing affecting a lot on a plan of subdivision lodged pursuant to section 166 of the Transfer of Land Act 1893 has in relation to such a lot.
Section 166 of the TLA provides, in effect, that a proprietor who wishes to subdivide land under the TLA is to deposit the plan or diagram of the land accompanied by an application to the Registrar for new certificates of title for the land the subject of the plan or diagram.
The words '[s]ubject to this section' in s 4(6) apply in particular (but not exclusively) to s 4(5), which makes particular provision for easements and restrictions implied or created under the Strata Titles Act, which are to take effect without any memorial or notification in the Register.
Section 25 of the Strata Titles Act provides, relevantly, that every strata plan for a strata scheme lodged for registration shall be accompanied by a certificate of approval by the Western Australian Planning Commission unless exempted by regulation. Regulation 15 of the Strata Titles General Regulations 1996 (WA) exempts, for this purpose, specified 'residential developments' of no more than five dwelling units. Accordingly, strata schemes for non‑residential developments (eg, commercial or industrial developments), and larger residential developments, are not exempt.
As will be noted later, by‑laws may be made which, amongst other things, restrict the use of lots and any common property, providing they are not inconsistent with the Strata Titles Act. Section 6 of the Strata Titles Act also deals, directly, with restrictions on use in that it provides for restrictions to be placed on the use to which the parcel, or part of the parcel (defined as land comprised in the strata plan), may be put.
Section 6(1) requires that the area the subject of the restriction be delineated on the plan lodged for registration, and that specific reference is made to s 6 by an appropriate endorsement on the plan. An existing strata plan may also be amended to restrict use: s 6(1)(a). A proprietor, occupier or other resident cannot use or permit to be used the restricted area in any manner that contravenes the restriction. Any contravention results in a fixed penalty and a daily penalty: s 6(2).
By s 6(3) and s 6(3a), such restrictions can, in general terms, only be added or varied or removed, by a resolution 'without dissent' (as to which see s 3A(c), s 3C and s 3C(a)).
Section 6A provides that a restriction under s 6 may limit the 'use of the lots' by requiring that each lot be occupied only, or predominantly, by 'retired persons' (as defined in s 6A(3)). Section 6A(2) provides that neither s 6A nor s 6 'is to be read as limiting the power of the strata company to make by‑laws under [s] 42 relating to the circumstances in which persons, other than the occupier, may reside in a lot' (emphasis added) which is subject to a s 6(1) restriction.
Part IV of the Strata Titles Act is headed 'Management'. Division 1 of pt IV is headed 'Strata companies'.
The strata company is a body corporate constituted under s 32: s 3. It has various duties set out in s 35.
By s 42(1):
A strata company may make by-laws, not inconsistent with this Act, for -
(a) its corporate affairs; and
(b)any matter specified in Schedule 2A; and
(c)other matters relating to the management, control, use and enjoyment of the lots and any common property. (emphasis added)
The matters specified in sch 2A include:
•the control or preservation of the essence or theme of the development under the scheme (item 4);
•plot ratio restrictions and open space requirements (item 6);
•provisions relating to proposed re‑subdivision (item 8).
By 42(2), the by‑laws set out in sch 1 and sch 2 are deemed to be by‑laws of the strata company. The sch 1 by‑laws, in general terms, deal with the duties and powers of the proprietor and of the strata company, and meetings of the strata company. In general terms, the sch 2 by‑laws are more concerned with conduct or behaviour, especially in relation to common property. There are differences between the way the two sets of by‑laws may be amended, repealed or added to. In general terms, whilst each set may be amended, repealed or added to pursuant to a court or Tribunal order, changes to sch 1 by‑laws require resolution 'without dissent', whereas sch 2 by‑laws only require 'special resolution': s 42(2). There is an exception to this by virtue of s 42(14). Section 42(14) provides, in effect, that notwithstanding s 42(2), in a scheme where none of the lots 'is used or intended to be used for residential purposes', the strata company may, by special resolution, amend sch 1 by‑laws for the purpose of making certain special provision in relation to the election of members of the council of the strata company.
By s 42(2a), each additional or amended by‑law must be classified as a sch 1 by‑law or a sch 2 by‑law. This maintains the efficacy of the difference between the mode of amendment for sch 1 and sch 2 by‑laws.
By 42(4), no amendment, repeal or addition of a by-law has effect until the strata company has lodged a notice of the amendment, repeal or addition in the prescribed form with the Registrar of Titles, and the Registrar of Titles has made a reference to the amendment, repeal or addition on the appropriate registered strata plan.
Whilst, by virtue of s 42(1)(c), by‑laws may be made not inconsistently with the Strata Titles Act, relating to the 'management, control, use and enjoyment of the lots and any common property',[65] s 42(3) places a limit on the operation of by-laws. It provides:
No by-law, amendment or repeal of a by-law is capable of operating so as to prohibit or restrict the devolution of lots or any transfer, lease, mortgage or other dealing therewith or to destroy or modify any easement implied or created by this Act. (emphasis added)
[65] Emphasis added.
The word 'devolution in s 42(3) (and 'devolve' in s 4(2)) would prima facie denote, in accordance with its usual legal meaning, the passing of property without the voluntary act of the previous owner,[66] including transmission by will.[67] It appears to be used in contradistinction to the voluntary transfers and other dealings comprehended by the words 'transferred, leased, mortgaged or otherwise dealt with'.
[66] O'Brien v Komesaroff [1982] HCA 33; (1982) 150 CLR 310, 320 ‑ 321; Australian Trade Commission v Film Funding & Management Pty Ltd (1989) 87 ALR 49, 67.
[67] See the definition of 'transmission' in s 4 of the TLA.
The word 'lease' in s 42(3) (and 'leased' in s 4(2) and 'lease' in s 42(5)) is not defined, but would also, prima facie, be given its technical legal meaning of the grant of the right to the exclusive possession of land for a term less than that of the grantor.[68] A lease may be granted for a determinate period (less than the grantor has), however short.[69]
[68] Chelsea Investments Pty Ltd v Federal Commissioner of Taxation [1966] HCA 15; (1966) 115 CLR 1, 8; Radaich v Smith [1959] HCA 45; (1959) 101 CLR 209, 222; Willmott Growers Group Inc v Willmott Forests Ltd [2013] HCA 51; (2013) 251 CLR 592 [61] ‑ [62].
[69] Landale v Menzies [1909] HCA 48; (1909) 9 CLR 89, 100 ‑ 101; Western Australia v Ward [2002] HCA 28; (2002) 213 CLR 1 [502]; Genco v Salter [2013] VSCA 365; (2013) 46 VR 507 [29]; Swan v Uecker [2016] VSC 313 [42].
Section 42(15) recognises that a by‑law may be made concerning the use to which a lot may be put with respect to occupancy in relation to pets, but confines the scope of the operation of such a by‑law. It provides:
To the extent to which a by‑law purports to prohibit or restrict -
(a)the keeping on a lot of a dog used as a guide by a completely or partially blind proprietor, occupier or other resident of a lot; or
(b)the use of a dog as a guide on a lot or common property by a completely or partially blind person,
the by‑law has no force or effect.
Management statements may be used (in practical terms by the developer) to set out by‑laws. When a strata plan is lodged for registration, a management statement may be lodged for registration with it: s 5C. A management statement is a document setting out by-laws of the strata company that are to have effect under s 42, s 42A and s 42B, and amendments and repeals referred to in s 42(2): s 5C(2). It may also include by‑laws in relation to any matter specified in sch 2A: s 5C(2). By s 5C(3), the management statement must be signed by the registered proprietor of the parcel (in general terms, the developer) and each person who has a registered interest in or is a caveator in respect of the parcel (in general terms, the new strata lot owners of the development). By s 5C(5), upon registration of a management statement, the by‑laws set out in the statement, together with amendments and repeals, have effect for the purposes of s 42. Section 5C(6) provides that by‑laws set out in the management statement may be amended in accordance with s 42 or as otherwise provided by the Strata Titles Act.
Section 42(6) provides, in effect, that the by‑laws are to bind the strata company and each proprietor, mortgagee in possession, occupier or other resident as if the by‑laws had been executed by such persons. Section 42(6) provides:
Without limiting the operation of any other provision of this Act, the by‑laws for the time being in force bind the strata company and the proprietors and any mortgagee in possession (whether by himself or any other person) or occupier or other resident of a lot to the same extent as if the by‑laws had been signed and sealed by the strata company and each proprietor and each such mortgagee, occupier or other resident respectively and as if they contained mutual covenants to observe and perform all the provisions of the by‑laws. (emphasis added)
The provision for the by‑laws to bind, in addition to the strata company, not only proprietors[70] but also 'any mortgagee in possession … or occupier or other resident' reflects a recommendation in a report by the Law Reform Commission of Western Australia into strata titles.[71]
[70] As had been the case under s 15(6) of the Strata Titles Act 1966 (WA).
[71] The Law Reform Commission of Western Australia, Report on the Strata Titles Act 1966 ‑ 1978, Project No 56, December 1982, ch 16.
The word 'occupier' is defined, in relation to a lot, to mean a person in 'lawful occupation' of that lot. The word 'occupation' is not defined. It is not a term of art.[72] In the Strata Titles Act, the word 'occupation' is qualified by the word 'lawful' in the definition of 'occupier'. The word 'occupier' would include, at least, a lessee. The word 'occupier' in this context would also, prima facie, include a licensee.[73]
[72] Hamersley Iron Pty Ltd v Roberts (1996) 16 WAR 52, 55; Livock v Suncorp Insurance & Finance [1995] 1 Qd R 206; QBE Insurance Ltd v Tolomeo [1983] 3 NSWLR 274, 280; Graysim Holdings Ltd v P & O Property Holdings Ltd [1995] 3 WLR 854, 857.
[73] Genco v Salter [2013] VSCA 365; (2013) 46 VR 507 [30].
Although an 'occupier or other resident' is bound by the by‑laws under s 42(6), that provision takes effect without limiting the operation of any other provision in the Strata Titles Act. Thus, under s 42(7) a proprietor or a mortgagee in possession is obliged to take reasonable steps to ensure that 'every occupier or other resident of that lot' complies with the by‑laws.
Nor is an 'occupier' simply the object of obligations under the Strata Titles Act. For example, by s 37(1)(g), the strata company may make an agreement with any proprietor or 'occupier' of a lot for the provision of amenities or services by the strata company to that lot, or to the proprietor or 'occupier' of the lot.
In addition to s 42(6), many other provisions of the Strata Titles Act refer to 'occupier or other resident of a lot' (emphasis added).[74]
[74] See, for example, s 6(2), s 6A(2), s 42(10), s 42(15), s 81(3), s 83(1), s 94(1), s 94(2).
The by-laws under sch 1 and sch 2 indicate that obligations in the by‑laws may be imposed directly on residents (as well as proprietors and occupiers),[75] including in relation to their 'visitors'.[76] A resident (as well as a proprietor and an occupier) is also bound by a restrictive use of a parcel, or part, of the land in the registered strata plan: s 6(2).
[75] See, for example, sch 1 by‑law 1(2); sch 2 by‑laws 1 - 9, 12, 14.
[76] Schedule 1 by‑law 1(2)(c).
As with an 'occupier', a 'resident' is not simply the object of obligations under the Strata Titles Act. For example, by s 42(10), a by‑law conferring exclusive use of common property under s 42(8) enures not only for the benefit of the proprietor or occupier, but also 'any other resident [of the lot] for the time being'.
Part VI deals with the resolution of disputes. By s 79(2), a strata company that is given notice of an application to the Tribunal under pt VI must serve a copy of the notice on each proprietor, each mortgagee who has given notice in writing of his interest to the strata company, and each 'occupier who would be affected if the order sought were made'.
An 'occupier or other resident' of a lot in a strata title scheme may (in addition to other persons, including the proprietor) apply to the Tribunal in relation to a dispute with respect to the exercise or performance of, or failure to exercise or perform, a power, authority, duty or function conferred or imposed by the Strata Titles Act or the by‑laws in connection with that strata scheme: s 83(1). An 'occupier or other resident' of the lot may also be the beneficiary of an order by the Tribunal under s 94 of the Strata Titles Act.
By s 81(3), the Tribunal may order that certain persons, including the strata company, a proprietor, or an 'occupier or other resident of a lot' do, or refrain from doing, a specified act with respect to a parcel.
The Strata Titles Act also contemplates that certain persons, including a proprietor, and an occupier, but not a resident, may have rights or remedies in relation to a lot or common property apart from the Strata Titles Act. In this regard, s 122(1) provides:
Nothing in this Act derogates from any rights or remedies that a strata company, a proprietor or mortgagee of a lot, an administrator, a person having an estate or interest in a lot or an occupier may have in relation to any lot or the common property apart from this Act.
Further consideration is required for present purposes in relation to the use of the words 'resident' and 'use' as used in the Strata Titles Act. Before turning to those matters, it is convenient to recall the observations of Street J in Rochester Investments Pty Ltd v Couchman[77] in relation to a provision in former NSW strata titles statute broadly analogous to s 4 of the Strata Titles Act.
Upon registration of a strata plan the subdivision effected by s 3(1) [of the relevant Strata Titles Act] becomes operative. There are some qualifications introduced to the application of the scheme of the Real Property Act [the equivalent of the TLA] by the later subsections of s 3. But, generally speaking, it is to my mind plain that the legislature has sought to set up what may be described as a local law existing within the interstices of the Real Property Act between all persons interested in land covered by a strata plan. The persons interested are the body corporate and the proprietors of the various lots. The effect to be given to s 3 is that the proprietor of a lot in the strata plan has a title which is indefeasible both as regard strangers and as regards other persons interested in that strata plan, whether they be other lot holders or whether it be the body corporate. This indefeasibility is subject to the local law, that is to say, to specific inroads by s 3 of the [relevant Strata Titles Act], by some of the later sections of the Act, and also by the by‑laws contained in the schedules to that Act. (emphasis added)
Resident
[77] Rochester Investments Pty Ltd v Couchman (1969) 90 WN (Pt 1) (NSW) 371, 376.
The words 'other resident of a lot' in the phrase 'the proprietors and any mortgagee in possession … or occupier or other resident of a lot'[78] are evidently words of expansion. They denote a person who is not the proprietor, a mortgagee in possession or occupier, but who is otherwise a 'resident' of the lot. At least generally speaking, a person may be an occupier but not a resident.[79] The word 'other' does not carry the implication that all or any of the preceding persons mentioned (proprietors, mortgagees in possession and occupiers) are merely, in effect, illustrations of a 'genus' of 'resident'.[80] As the primary judge, with respect, correctly observed:[81]
[T]he term 'resident' is not co‑extensive in meaning with the term 'occupier'. That is because the definition of 'occupier' contains no reference to any requirement of residence, which is hardly surprising given that the [Strata Titles Act] does not apply solely to strata lots which are zoned for residential use.
[78] As used in s 42(6) of the Strata Titles Act and elsewhere.
[79] Barlow v Smith (1892) 9 TLR 57; Davey v Savage (Unreported NSWSC, 2 August 1984, BC8411501) (Needham J); R v The Assessment Committee of St Pancras (1877) 2 QBD 581, 588; Fennell v Wyong Shire Council (1975) 31 LGRA 164, 168.
[80] Compare Mr Byrne's submissions to the primary judge referred to in primary decision [99].
[81] Primary decision [116].
The word 'resident' in the phrase 'resident of the lot' in the Strata Titles Act is not defined, but s 6A(2) indicates that a 'resident' is or includes someone who 'reside[s] in' a lot. The word 'resident' is not a term of art.[82]
[82] Commissioner of Taxation v Miller [1946] HCA 23; (1946) 73 CLR 93, 99, 100 ‑ 101, 103 ‑ 104; The Australasian Temperance & General Mutual Life Assurance Society Ltd v Howe [1922] HCA 50; (1922) 31 CLR 290, 297, 304 ‑ 305, 337.
In Miller, Latham CJ observed:[83]
I should have thought that there was no doubt that a man resided where he lived, and I do not think that there is any interpretation of the word 'reside' by the courts which makes it impossible to apply the ordinary meaning of the word 'reside' in the present case. In Levene v Inland Revenue Commissioners [(1928) AC 217, 222], Viscount Cave LC said:
'… the word "reside" is a familiar English word and is defined in the Oxford English Dictionary as meaning "to dwell permanently or for a considerable time, to have one's settled or usual abode, to live in or at a particular place". No doubt this definition must for present purposes be taken subject to any modification which may result from the terms of the Income Tax Act and Schedules; but, subject to that observation, it may be accepted as an accurate indication of the meaning of the word "reside". In most cases there is no difficulty in determining where a man has his settled or usual abode, and if that is ascertained he is not the less resident there because from time to time he leaves it for the purpose of business or pleasure.'
[83] Miller (99).
The meaning of the word 'resident' and cognate terms have also been the subject of detailed consideration in relatively recent cases in other statutory contexts, including Marana Holdings Pty Ltd v Commissioner of Taxation[84] and GrainCorp Operations Ltd v Liverpool Plains Shire Council.[85]
[84] Marana Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 307; (2004) 141 FCR 299 [18] ‑ [33].
[85] GrainCorp Operations Ltd v Liverpool Plains Shire Council [2013] NSWCA 171; (2013) 194 LGERA 83 [123].
In the former case, referred to by the Tribunal,[86] the Full Court of the Federal Court considered that the word 'residence' usually connotes 'permanent or at least extended occupation'.[87]
[86] Tribunal decision [31] - [34].
[87] Marana [33].
In GrainCorp Operations, Ward JA (Beazley P & Sackville AJA agreeing) observed that the word 'reside' in its ordinary meaning also includes 'having one's abode in a place "for a time"'.[88] Ward JA also observed:[89]
What can be drawn from the above is that the appellation 'residential' may in some context connote a degree of permanence but can also connote an habitual or usual abode …
…
… I accept that on one connotation of the adjective 'residential', the composite term 'residential buildings' could be read as meaning more than simply structures used for the purposes of human habitation; namely, that it carries with it the notion of a degree of permanence or settled or habitual abode. However, I also consider that on the ordinary meaning of 'residential' it is sufficient that structures are used as the usual abode of people or as their abode for a time' (in the sense of more than a fleeting stay). …
…
I therefore approach the characterisation of the proposed use on the basis that it falls within the prohibition if it is use as a settled or habitual abode.
[88] GrainCorp [78].
[89] GrainCorp [83], [101], [103].
In Davey, Needham J said:[90]
[A] man cannot be said to reside in a particular place unless, in the ordinary sense of the word, one can say that for the time being he is making his home in that place.
[90] Davey (4).
In the same case, Needham J referred with apparent approval to observations by Lord Denning MR in Fox v Stirk & Bristol Electoral Registration Officer[91] to the effect that a 'guest who comes for the weekend is not resident. A short‑stay visitor is not resident'. His Honour also referred to observations by Widgery LJ in Fox to the effect that a residence involves '[s]ome assumption of permanence, some degree of continuity, some expectation of continuity'.[92]
[91] Davey (4); Fox v Stirk & Bristol Electoral Registration Officer [1970] 2 QB 463, 475.
[92] Davey (5); Fox (477).
In the context of the obligations imposed and entitlements conferred on a 'resident' in the Strata Titles Act, the word 'resident' in the phrase 'resident of a lot' implies some degree of continuity of living at the lot. It would include, at least, someone who is making the lot his or her settled or usual abode. On the other hand, the word 'resident' would ordinarily not include, eg, a guest of the occupier or proprietor, or a visitor of the occupier or proprietor, who may stay for a few days. That conclusion tends to be confirmed by par 16.9 of the Law Reform Commission of Western Australia report, which stated:[93]
Although it would be undesirable to limit a proprietor's power to lease his lot, to permit occupancy of it or to allow others to reside in it, the Commission considers that tenants, occupiers and residents should be bound to comply with the by‑laws of the strata scheme. Such an extension would result, for example, in a tenant, sub‑tenant or purchaser in possession under an agreement for sale of a lot being bound to comply with the by‑laws. Members of a proprietor's or tenant's family residing in the lot would also be bound, as would those living in the lot with the consent of the proprietor or tenant. However, a person staying in the lot on a temporary basis, such as a weekend visitor, would not be. (emphasis added)
[93] See s 19(1)(a) and s 192(b) of the Interpretation Act 1984 (WA).
As explained later, it is unnecessary to decide whether the word 'resident' in the Strata Titles Act might apply in some or all circumstances to a holiday‑maker or other person staying at the lot for a break away from their settled or usual abode.
Use
As noted earlier, the use of a registered strata lot may be affected by a compliant endorsement on the registered strata plan restricting the use of a delineated area (s 6), or by by‑laws not inconsistent with the Strata Titles Act (s 42(1)(c)).
Section 6A recognises that a limitation on use under s 6 may include a limitation on the nature of the occupancy of a lot. Thus, under s 6A, the restriction referred to is that the lot may only be occupied by 'retired persons'.[94]
[94] cf the first sentence of the passage from the Law Reform Commission report quoted in [111] above.
Section 6A does not purport to preclude the proprietor from transferring or leasing the lot to persons other than 'retired persons'. The limitation applies only to the occupancy of the lot, which s 6A describes as a limitation on the 'use' of the lot.
Under s 42(1)(c) of the Strata Titles Act, by‑laws may be made, not inconsistent with the Act, relating to the 'management, control, use and enjoyment' of a lot. Those words, singularly and collectively, are words of considerable breadth. (See, for example, Hamlena Pty Ltd v Sydney Endoscopy Centre Pty Ltd.[95])
[95] Hamlena Pty Ltd v Sydney Endoscopy Centre Pty Ltd (1990) 5 BPR 11, 436, 11, 440.
In Mackie v Henderson,[96] Edelman J observed:
The starting point is that it is trite that by-laws frequently interfere with the property rights of the owner of a lot. They can also interfere with a myriad of personal rights in relation to the lot. The range of possible by-laws can be extremely broad. For instance, in Sydney Diagnostic Services Pty Ltd v Hamlena Pty Ltd (1991) 5 BPR 11,432 the New South Wales Court of Appeal upheld a by-law which prohibited the owner of a lot from engaging in any enterprise on the lot other than the medical practice of pathology. This by-law fell within the power to make by-laws 'for the purposes of the control, management, administration, use, or enjoyment of the lots'.
[96] Mackie v Henderson [2011] 1 WASC 197; (2011) 42 WAR 194 [22].
Also, in Bapson Pty Ltd v Puyeti Pty Ltd,[97] Waddell CJ in Eq held that a by‑law prohibiting, in effect, more than one 'Asian Food Outlet' in a strata scheme was not a restriction contrary to the then NSW equivalent of s 42(3) of the Strata Titles Act. His Honour said that:[98]
[W]hile a restriction on use might limit the number of potential transferees or lessees, I do not think it can be regarded as a restriction on transfer or leasing or on any of the other transactions mentioned.
[97] Bapson Pty Ltd v Puyeti Pty Ltd (Unreported, NSWSC, 24 May 1990, BC9002451) (Waddell CJ).
[98] Bapson (8); see also White v Betalli [2006] NSWSC 537; (2006) 66 NSWLR 690 [54].
That decision was followed in Salerno v Proprietors of Strata Plan No 42724,[99] where the by‑law prohibited a proprietor or occupier from smoking 'within a lot or within the common property'. In that case, Windeyer J said, with respect to the NSW equivalent of s 42(3):[100]
The purpose of [the provision] as was the purpose of its predecessor … appears to be to prevent restraints on alienation, leasing or mortgaging. Thus it is clear that a by‑law requiring the consent of the body corporate to transfer or lease would be invalid. The argument of the defendant is that the by‑law does not offend against [the relevant statutory provision] because it does not restrict in this case the leasing of the lots but rather controls, or seeks to control, the conduct of persons within the lots of the strata plan. Any person whatsoever is free to purchase or take a lease of the lots; what those persons are not free to do is to smoke or allow smoking within the lot.
In our opinion, that argument is correct. It is supported by the decision of Waddell CJ in Equity in Bapson …
In our view, the by‑law in question here does not restrict the right to lease, albeit that it may limit the class of persons who might desire to take a lease of the premises in question. It is quite possible that a by‑law which had the effect of prohibiting the lease of a lot to persons who were smokers would be invalidated by [the relevant statutory provision] because that would not control the conduct of such persons within the lot but would prevent the leasing of that lot to such persons whether or not they smoked within the lot. That is not the effect of the by‑law in question here.
[99] Salerno v Proprietors of Strata Plan No 42724 (1997) 8 BPR 15457 (Windeyer J).
[100] Salerno (15458 - 15459).
Management Statement - by‑laws of Ceresa River Apartments
As noted earlier, strata plan 55597 was registered on 14 July 2008. Form 3 of the strata plan includes the following under the heading 'Description of Parcel and Building':[101]
One hundred and thirteen residential apartment dwellings in a multiple‑level three building development.
[101] GB 16.
Form 8, headed 'Schedule of Encumbrances etc', refers to an instrument being 'Statement K654715 Management Statement'.[102] Instrument K654715 shows that it was lodged with the Registrar of Titles on 14 July 2008.[103] The instrument is headed 'Management Statement'.
[102] GB 20.
[103] GB 29, see also GB 20.
The Management Statement is in the following terms:[104]
This Management Statement lodged or to be lodged with a strata plan in respect of the above land sets out the bylaws of the strata company or amendments to the bylaws contained in schedule 1 and schedule 2 of the Strata Titles Act 1985 that are to have effect upon registration of the strata plan.
1.The schedule 1 bylaws are amended, repealed or added to as follows:
The bylaws in Schedule 1 to the Act … as they apply to the scheme referred to in the strata plan are repealed and the Schedule 1 bylaws numbered 1 to 49 inclusive as appears in the Schedule hereto are adopted.
2.The Schedule 2 bylaws are amended, repealed or added to as follows:
The bylaws in Schedule 2 to the Act are repealed.
[104] GB 30.
The Commonwealth Bank of Australia, as mortgagee under a mortgage registered as an encumbrance against the land, consented to the Management Statement.[105]
[105] GB 31.
Schedule 1 to the Management Statement sets out 49 by‑laws.
The by‑laws contain a definition clause in by‑law 1.1, which includes the following definitions:
•'Bylaws' means the bylaws adopted by the strata company from time to time;
•'Council' means the Council of the strata company established pursuant to the bylaws;
•'Lot' or 'lot' means a strata lot formed upon registration of the strata plan;
•'Original Proprietor' means the registered proprietor of the land before the scheme was constituted by registration of the strata plan;
•'Proprietor' means the proprietor from time to time of a lot and the proprietor's successors in title, personal representatives, permitted assigns and transferees or registered mortgagee in possession;
•'Schedule 1 Bylaws' means the schedule 1 Bylaws 1 to 49 inclusive;
•'Scheme' means the strata scheme constituted upon registration of the strata plan.
The definition of 'Schedule 1 Bylaws' confirms that the by‑laws are all sch 1 by‑laws, and thereby may only be amended (in general terms) by the strata company 'without dissent'.
By‑law 1.2.4 provides that headings are inserted for convenience and are not to affect the construction or interpretation of the by‑laws.
By‑law 2.2 provides:
A proprietor shall:
2.2.1notify the strata company forthwith upon any change of ownership …; and
2.2.2if required in writing by the strata company, notify the strata company of any mortgage or other dealing in connection with his lot, including in the case of a lease of a lot, the name of the lessee and the term of the lease. (emphasis added)
By‑law 2.2 is in the same, or in substantially similar, terms to sch 1 by‑law 1(1a) under the Strata Titles Act.
The word 'lease' in by‑law 2.2.2 would, prima facie, bear its technical meaning.
By‑law 2.3 refers to the duties of a 'proprietor, occupier or other resident' (emphasis added). It provides:
2.3A proprietor, occupier or other resident of a lot shall:
2.3.1use and enjoy the common property in such a manner as not unreasonably to interfere with the use and enjoyment thereof by other proprietors, occupiers or residents, or of their visitors; and
2.3.2not use the lot or permit it to be used in such manner or for such purpose as causes a nuisance to any occupier of another lot (whether a proprietor or not) or the family of such an occupier;
2.3.3take all reasonable steps to ensure that his visitors do not behave in a manner likely to interfere with the peaceful enjoyment of the proprietor, occupier or other resident of another lot or of any person lawfully using common property; and
2.3.4take all reasonable steps to ensure that his visitors comply with the bylaws of the strata company relating to the parking of motor vehicles. (emphasis added)
By-law 2.3 is in the same, or in substantially similar, terms to sch 1 by‑law 1(2) under the Strata Titles Act. Consistently with the use of the phrase 'occupier or other resident' in the Strata Titles Act, the word 'occupier' in by‑law 2.3 would mean someone in lawful occupation and the word 'resident' would mean, at least, someone making the lot his or her settled or usual abode. However, by‑law 2.3 should be read with by‑law 16, which controls the use to which a lot may be put by reference to occupation of a lot for use as a 'residence'.
By‑law 16 provides:
16.Use of Premises
16.1Subject to the Schedule 1 bylaw 16 a proprietor of a residential lot may only use his lot as a residence.
16.2 Notwithstanding bylaw 16.1 a proprietor of a residential lot may:
16.2.1grant occupancy rights in respect of his lot to residential tenants;
16.2.2conduct business from his lot so long as:
16.2.2.1 the proprietor does not invite customers of the business to visit the lot for the purpose of conducting the business;
16.2.2.2the conduct of the business from the lot does not breach any local authority bylaw or regulation;
16.2.2.3the conduct of the business does not cause any inconvenience to the proprietors of other lots;
16.2.2.4the business does not involve the manufacture storage or vending of goods.
16.3Notwithstanding bylaw 16.1 the original proprietor of the land may use any lot owned by the original proprietor for the purposes of display to prospective purchasers of that or other lots within the scheme.
16.4If a proprietor grants occupancy rights in respect of his lot he shall:
16.4.1promptly provide the council with the full name of each occupier;
16.4.2give each occupier a copy of the bylaws and the rules (if any) at the commencement of the occupation; and
16.4.3procure that the occupancy agreement contains a provision to the effect that the occupier will comply with the bylaws and the rules and that any breach thereof will constitute a breach of the occupancy agreement which will entitle the proprietor to terminate the occupancy agreement with the occupier. (emphasis added)
By‑law 16 has no equivalent in the sch 1 or sch 2 by‑laws. The proper construction of by‑law 16 is referred to below.
By‑law 21 provides, relevantly, in effect, that a proprietor shall not:
21.1.1use his premises or any part of the common property for any purpose which may be a breach of the bylaws, the regulations or bylaws of the local authority or of any other governmental regulation or law;
21.1.2use his premises for any purpose that may be illegal or immoral or injure the reputation of the scheme as a luxury residential complex;
…
21.1.10without the written consent of the strata company maintain within his premises anything visible from outside his premises which is not in keeping with the amenity or reputation of the scheme as a residential complex. (emphasis added)
The word 'reputation' means, relevantly, the estimation in which a thing is held, especially by the community or the public generally.[106]
[106] Macquarie Online Dictionary definition of 'reputation'.
Disposition
Grounds 1(2), (3) and 2 contend, in effect, that the judge misconstrued by‑law 16. Ground 1(1) contends that the judge's construction and conclusion is contrary to s 42(3) of the Strata Titles Act. In a variety of ways, grounds 1 and 2 raise for determination the proper construction of by‑law 16 in the context of a proper understanding of the Strata Titles Act and the other legislative instruments which, according to Mr Byrne, are relevant to the question of construction (being the Local Planning Scheme and the Residential Tenancies Act). Ground 3 contends, in effect, that, alternatively to the above grounds, the judge erred in not finding that order 2 of the Tribunal's orders was uncertain.
As the points and arguments raised in grounds 1 and 2 all serve to establish, according to Mr Byrne, that the judge erred in her construction of by‑law 16, and as many of the points and arguments are intertwined or overlap, it is convenient to address the proper construction of by‑law 16 as a single issue. That is done in the next section of these reasons, taking into account Mr Byrne's arguments.
As indicated earlier, each party approached the proper construction of by‑law 16 on the basis that the by‑laws were a statutory contract to which, in general terms, the principles referred to in Tate applied. This appeal will be considered and disposed of on that basis. Nevertheless, in point of principle, it might be thought that as this appeal concerns the proper construction of the Management Statement, lodged and registered with the Ceresa River strata plan and referred to in the schedule of encumbrances on the title of lot 14, and as the Management Statement has not been amended since registration, the correct approach to construction might be along the following lines:
(a)the Management Statement is to be construed objectively, by reference to what a reasonable person would understand the language of the instrument to mean;
(b)it is to be construed in the context of the registered strata plan;
(c)it is to be construed in the relevant statutory context, being, first and foremost, the Strata Titles Act;
(d)as the Management Statement is on the Torrens Register, unamended, rules of evidence assisting the construction of contracts inter partes, of a nature explained by Codelfa Constructions Pty Ltd v State Rail Authority (NSW),[107] do not apply to its construction: Westfield Management Ltd v Perpetual Trustee Co Ltd;[108]
(e)insofar as there are constructional choices properly open, a construction should be preferred which is consistent with the Strata Titles Act: s 42(1) of the Strata Titles Act.
[107] Codelfa Constructions Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337, 350 ‑ 352.
[108] Westfield Management Ltd v Perpetual Trustee Co Ltd [2007] HCA 45; (2007) 233 CLR 528 [37].
If this were the correct approach to construction, the result in this appeal would be the same.
Before turning to the issue of the proper construction of by‑law 16, it is convenient to refer at this point, separately, to ground 1(2) of the appeal. Ground 1(2) appears to allege that the judge, wrongly, failed to find that the Tribunal had based (at least in part) its construction of by‑law 16 on the basis of the subjective intention of an occupier under any occupancy agreement. The ground alleges that the error occurred at primary decision [108]. As we would read her Honour's reasons at primary decision [108], her Honour construed the Tribunal's reasons as not signifying that subjective intention was relevant, but rather 'residence' was to be determined objectively, by reference to all the circumstances. Whilst it may be that the Tribunal's references to 'intent' are not entirely free from ambiguity, we do not think that her Honour made the error imputed to her in this ground.
The proper construction of cl 16
Insofar as by‑law 16.1 refers to a 'residential lot', it must be taken to be referring to each of the 113 lots in the 'residential apartment development' recorded on the strata plan. It is difficult to accept Mr Byrne's contention that the purpose of the word 'residential' in by‑law 16 is to distinguish between 'residential' and 'non‑residential' lots (such as commercial or industrial lots). This is because the by‑laws are contained in the Management Statement, lodged with registration of the strata plan, and the strata plan refers to 'residential apartment dwellings'.
By-law 16.1 is framed in terms of 'use'. It is addressing the 'use' to which a proprietor may put his or her lot. By‑law 16.3 relates only to use by the original proprietor. By‑law 16.2 is directed, in substance, to the particular uses to which a lot may be put by proprietors other than the original proprietor 'notwithstanding' by‑law 16.1. By‑law 16.2.2 relates to the extent to which a proprietor may conduct 'business' from his or her lot.
By‑law 16.4 addresses the circumstance where a 'proprietor grants occupancy rights in respect of his lot'. It picks up the language and subject matter of by‑law 16.2.1.
By-laws 16.2.1 and 16.4 are evidently designed to add something beyond the requirement in by‑law 2.2.2 to notify the strata company of a 'lease' of the lot if required in writing by the strata company. By‑law 16.4 appears to be designed to facilitate the regulation of conduct by an 'occupier' of a lot to whom the proprietor has granted 'occupancy rights'. A proprietor under by‑law 16.2.1 may grant 'occupancy rights' to 'residential tenants'.
As Nettle JA (as his Honour then was) observed in Genco,[109] 'the words "tenant" and "tenancy" are sometimes used in a looser sense than their legal meaning of lessee and lease'. When by‑law 16.2.1 is read with by‑law 16.4, it appears that the word 'tenant' in by‑law 16.2.1 is not used in the technical legal sense of 'lessee'. That is because by‑law 16.2.1 uses the broader language of 'occupancy rights' (not lease); the person to whom occupancy rights are granted is referred to in by‑law 16.4 as an 'occupier' (not lessee); and the instrument under which the 'occupancy rights' are granted is referred to in by‑law 16.4 as an 'occupancy agreement' (and not a lease). Accordingly, the words 'residential tenants' in by‑law 16.2.1 are apt to include licensees under a written agreement for occupancy. The word 'residential' means 'of or relating to a residence'.[110] When by-laws 16.1 and 16.2.1 are read together, and with particular reference to the words 'residence', 'notwithstanding', and 'residential', they indicate that a lot may only be used as a 'residence' by the proprietor or by anyone to whom the proprietor grants 'occupancy rights'. In other words, in substance, by‑law 16.1 and by‑law 16.2.1, read together, mean that a lot may only be occupied by persons who use the lot as a 'residence'.
[109] Genco [29].
[110] Macquarie Online Dictionary.
The words 'residence' and 'residential' in by‑laws 16.1 and 16.2.1 are to be understood in a context where the by‑laws treat the strata scheme development as a 'luxury residential complex'.[111] It may be inferred that the rationale for by‑law 16 is that occupants for whom their lot is their usual or ordinary 'residence', would more likely preserve the character of the complex as a 'luxury residential complex' than occupants who come and go, and whose 'residence' is elsewhere.
[111] By‑law 21.
In the present context, the phrase 'use his lot as a residence' in by‑law 16.1 appears, objectively, to be referring to the use of the lot as one's settled or usual abode.[112] As noted earlier (see [111] above) the word 'resident' in the Strata Titles Act would include, at least, someone for whom the lot is their settled or usual abode. In this regard, the word 'residence' in by‑law 16.1 is used in a manner consistently with the use of the word 'resident' in the Strata Titles Act.
[112] See, eg, Miller (99).
However, it cannot be assumed that the word 'residence' in by‑law 16.1 is merely employed as a derivative of 'resident', as that term is used in the Strata Titles Act. It may be that a somewhat lesser degree of continuity of living at a place inheres in the conception of 'resident' in the Strata Titles Act than is inherent in the word 'residence' in the phrase 'use his lot as a residence' in by‑law 16.1. For example, someone staying at the lot for a holiday or as a break away from their settled or usual abode might arguably be a 'resident' within the meaning of the Strata Titles Act, but a lot used for accommodation of that kind would not involve the 'use of [the] lot as a residence' within the meaning of by‑law 16.1. It is unnecessary, for the disposition of the appeal, to reach a view on whether, for example, the word 'resident' in the provisions of the Strata Titles Act might apply to a holidaymaker staying at the lot. That is because, even if the conception of 'resident' in the Strata Titles Act implies some lesser degree of continuity of living at the place than does the word 'residence' in by‑law 16.1, that would not mean that by‑law 16.1 operates inconsistently with the Strata Titles Act. On the contrary, by‑laws may be made relating to 'use' under s 42(1) of the Strata Titles Act, and by‑law 16 is a by‑law relating to 'use'.[113]
[113] As noted earlier, Mr Byrne does not challenge the validity of the by‑law.
To the extent that there may be any difference in degree of continuity of living implied in the word 'resident' as used in the various provisions in the Strata Titles Act on the one hand, and in the word 'residence' in a by‑law relating to 'use' pursuant to s 42(1) of the Strata Titles Act on the other, it merely reflects, as Isaacs J observed in Howe, that the word 'residence' and cognate terms are of 'very flexible meaning, acquiring whatever precision they have in any given case from their surroundings'.[114]
[114] Howe (304).
Accordingly, on its proper construction, by‑law 16.1 read with by‑law 16.2.1 means that a lot may only be occupied by persons who use the lot as their settled or usual abode. The primary judge used the expression 'permanent place of abode'.[115] The Tribunal also referred to occupation for an 'extended or substantial period'[116] (although ascertaining the content of such a phrase might not be without its difficulty). Whilst proof of permanency of abode or 'extended or substantial' occupation of a place may be evidence of a settled or usual abode, in our view, the word 'residence' in this context more accurately denotes a settled or usual abode. Whether someone is occupying a lot for use as their settled or usual abode will, generally speaking, be a question of fact. On the other hand, some uses will necessarily fall outside the phrase 'use his lot as a residence'. Thus, a lot occupied by persons who merely use the lot as tourist accommodation, or as accommodation for holidays or other breaks away from their settled or usual abode, is not being occupied by persons who use the lot as a 'residence' within the meaning of by‑law 16, and such persons are not residential tenants within the meaning of by‑law 16.2.1.
[115] Primary decision [109], [112].
[116] Tribunal decision [38(e)].
Occupation for, say, less than three months within a 12‑month period (being the yardstick apparently applied by the Tribunal) might well be evidence that the lot is not being occupied by persons using it as their settled or usual abode. But the word 'residence' does not itself import a fixed period of occupation. The prohibition in by‑law 16 is not on periods of occupation, but on use. Thus, for example, if a person had emigrated, or moved from another State, to Perth, and were granted occupancy rights under an occupancy agreement pursuant to by‑law 16.2.1 for two or three months as a place of residence whilst they looked to purchase a property, they would prima facie be using the lot as their settled or usual abode in Perth for that time. Someone from interstate or overseas occupying a lot for a limited period to work or study in Perth might, or might not, depending on all the circumstances, be occupying the lot as their settled or usual abode.
Also, the word 'use' in the phrase 'use his lot as a residence' is significant. The word 'use' means to employ for some purpose, to put into service or turn to account.[117] A proprietor who did no more than leave the lot vacant would not be putting it to any 'use' within the meaning of by‑law 16.
[117] Macquarie Online Dictionary.
The effect of by‑law 16, on its proper construction, is that a proprietor may only use, and any occupier to whom the proprietor grants occupancy rights may only use, the lot as a settled or usual abode and not otherwise. The limitation on the occupier's use is effected through the proprietor procuring (pursuant to by‑law 16.4) the occupier's agreement to comply with the by‑laws. By‑law 16 does not operate relevantly as a restraint on alienation contrary to s 42(3) of the Strata Titles Act, but as a limitation on use.
Use as a settled or usual abode will encompass the ordinary incidents of living, such as admitting guests and visitors who may stay with the resident for varying periods of time. However, persons who do not themselves reside at the lot and who allow those who reside elsewhere to stay at the lot cannot be said to use the lot as a residence within the meaning of by‑law 16.1
It will be apparent from what we have written already that we do not accept the appellant's submissions that:
(1)while by-law 16.1 deals with use, by‑law 16.2.1 deals with a distinct subject, namely the grant of occupancy rights;
(2)that grant of occupancy rights works independently of by‑law 16.1;
(3)the prohibition in s 42(3) consequently protects the right of the lot holder to grant a right of occupancy under by‑law 16.2.1 and precludes a narrow reading of that right.[118]
[118] Appellant's supplementary submissions, par 55 ‑ 61, 100, 111 ‑ 116; appeal ts 107 - 109.
By‑law 16 is concerned with use. By‑law 16.1 states a general rule that confines the use to which a proprietor may put his or her strata lot; by‑law 16.2.1, by‑law 16.2.2 and by‑law 16.3 provide exceptions to that rule; by-law 16.4 regulates the exception in by‑law 16.2.1. Thus the subject matter of by‑law 16 as a whole is use. Construed in the manner we have described, and taking into account what we have said in [118] ‑ [119] as to s 42(3), by‑law 16 does not prohibit or restrict dealings in a lot in a manner contrary to or that engages s 42(3) of the Strata Titles Act.
Consequently it is not necessary to deal with any question as to whether s 42(3) limits the authority of a strata company to make by‑laws, or merely limits the operation of by‑laws that are validly made.[119]
[119] As to which see, for example, White [53] ‑ [54].
Although it is difficult to see that the Local Planning Scheme, which was gazetted after the Management Statement was registered on the title, would be admissible for the purpose of construing by‑law 16, if it were admissible (as Mr Byrne contends), it would tend to confirm the conclusion referred to above. The Local Planning Scheme indicates that a class of permitted use, if the local government grants planning approval, is 'serviced apartments', involving 'short‑stay accommodation'. In general terms, use as 'serviced apartments', although in one sense residential use, is antithetical to the use of a lot as one's settled or usual abode. If planning considerations of this kind could properly inform the construction of the Management Statement, it may be inferred that by‑law 16 is intended to operate so as to exclude any such non‑'residence' use in this 'luxury residential complex', even if, for local planning purposes, such use were subsequently permitted. The actual change of use allowing usage as a serviced apartment, obtained by Mr Byrne for lot 14 on 23 May 2013, can have no bearing on the proper construction of the Management Statement lodged for registration on 14 July 2008.
Further, the by-laws bind, relevantly, the strata company and the proprietor as if they had been signed and sealed by each, and as if they contained mutual covenants to observe and perform all of the provisions of the by‑laws: s 42(6) of the Strata Titles Act. The City of Belmont is not bound by the by‑laws. A covenant by a proprietor not to use his or her lot in a manner permissible by the local government is not inconsistent with the Local Planning Scheme, and a by‑law which, on its proper construction, contains a covenant circumscribing use, could not be regarded as 'absurd, repugnant or capricious'.[120]
[120] cf appellant's amended submissions, par 27; WB 12.
Further, it may be noted here that the City of Belmont's planning approval for lot 14 indicated, in terms, that planning approval by the City of Belmont ought not be taken as obviating the need for any other approvals to be obtained, including any relevant approval from the strata company or other strata lot owners. The terms of the City of Belmont's planning approval do not, of course, shed any light on the meaning to be given to by‑law 16. Nevertheless, the recognition by the City of Belmont that strata company approval may be required tends against any ready acceptance that there is an inherent absurdity in the conclusion that a by‑law may constrain use in this way.
Nor, contrary to Mr Byrne's submissions, does by‑law 16 fall to be considered within the context of the Residential Tenancies Act.
The Residential Tenancies Act, as the long title indicates, is an Act to 'regulate the relationship of lessors and tenants under residential tenancy agreements, to consequentially amend certain Acts, and for connected purposes'. It is plainly beneficial legislation.
The Residential Tenancies Act applies, relevantly, to 'any residential tenancy agreement entered into' after the commencement of the Act: s 5. A 'residential tenancy agreement' is defined in s 3 to mean:
any agreement, whether or not in writing and whether express or implied, under which any person for valuable consideration grants to any other person a right to occupy, whether exclusively or otherwise, any residential premises, or part of residential premises, for the purpose of residence.
The breadth of the language in this definition marks the beneficial nature of the legislation for the protection of the person granted a right of occupation.[121]
[121] Although the Residential Tenancies Act also offers certain protections and remedies for the benefit of a landlord: Re Glynn; Ex Parte Royle [2003] WASCA 122 [19] (Wheeler J) (albeit in dissent).
The term 'residential premises' is defined to mean, by s 3, 'premises that constitute or are intended to constitute a place of residence'.
The Residential Tenancies Act does not apply to an agreement where the agreement is 'bona fide entered into for the purpose of conferring on a person a right to occupy premises for a holiday': s 5(2)(e). Section 5(4) provides, in effect, that for the purposes of s 5(2)(e), absent proof to the contrary, an agreement conferring a right to occupy premises for a fixed term of three months or longer is deemed not to have been entered into bona fide for the purpose of conferring a right to occupy the premises for a holiday. As McKechnie J (with whom Murray J agreed) observed in Re Glynn,[122] with reference to s 5(2)(a) and s 5(4):
The Residential Tenancies Act is not to be evaded by a merely colourable use of words which do not correspond with what is really provided.
[122] Re Glynn [64].
Section 5(2)(e) and s 5(4) recognise that an agreement for a term of less than three months may be an agreement to grant a right of occupancy of 'residential premises' for the purpose of 'residence' for the purposes of the Residential Tenancies Act. By‑law 16 also contemplates that a lot may be used for a person's settled or usual abode, even though it may be occupied for a term of less than three months. However, by‑law 16 operates by and through its own terms (with no reference to a period of three months or any statutory presumption), for the purposes of controlling the use of a lot, pursuant to a statutory right conferred by s 42(1) of the Strata Titles Act. It operates so as to bind, amongst others, the proprietor and the strata company of the strata development. Unlike under the Residential Tenancies Act, that is not for the purpose of protecting the occupier[123] of the lot in respect of which the occupancy agreement is made. Rather, it is for the purpose of protecting the overall reputation and amenity of all the lots in the strata scheme for the benefit of all proprietors and occupiers.
[123] Or even the proprietor.
It may be accepted that any occupancy agreement under by‑law 16.2.1, if it were for valuable consideration, would prima facie be a residential tenancy agreement within the meaning of the Residential Tenancies Act. It may also be accepted that if an occupancy agreement under by‑law 16.2.1 were 'dressed up', contrary to its real purpose, to appear as though it were an agreement for the purpose of conferring a right to occupy the premises for a holiday, it would not prima facie escape the operation of the Residential Tenancies Act. However, those matters merely reflect the legal position that any occupancy agreements entered into pursuant to by‑law 16.2.1 would not be immune from the operation of other statutory law, such as the Residential Tenancies Act.
The Residential Tenancies Act makes no reference, expressly or impliedly, to the Strata Titles Act. The sch 1 and sch 2 by‑laws to the Strata Titles Act do not contain a by‑law which refers to or picks up the language of a 'residential tenancy agreement' within the meaning of the Residential Tenancies Act. The two statutes do not deal with the same subject. Mr Byrne's contention that 'the combined operation of [b]y‑laws 16.2.1 and 16.4 [reflect] the provisions of the [Residential Tenancies Act], in particular ss 3 ‑ 5' cannot be accepted.[124] The Residential Tenancies Act is not part of the context, at least in this case, within which the by‑laws are to be construed.
[124] Appellant's amended submissions, par 41.
Even if that conclusion were wrong, there is nothing in the Residential Tenancies Act which would warrant a different construction of by‑law 16 from the one referred to earlier in these reasons.
Ground 3
As noted earlier, order 2 of the Tribunal's orders operates to preclude Mr Byrne from using his lot for occupation by any person for less than three months in any 12‑month period, and is sufficiently broad to preclude Mr Byrne from leasing or licensing his lot for occupation by any person as his or her residence for such a period.
For the reasons given earlier, order 2 reflects a misunderstanding of by‑law 16, properly construed.
Senior counsel for the strata company accepted that this court could make substitutive orders to the extent that there was any ambiguity in the Tribunal's orders.
Conclusion
Ground 1 of the appeal should be dismissed, save insofar as it alleges that the primary judge erred in upholding the Tribunal's decision to the effect that by‑law 16, on its proper construction, operates as a restraint on alienation of lot 14, contrary to s 42(3) of the Strata Titles Act. Ground 2 of the appeal should be dismissed. Ground 3 should be allowed.
Subject to hearing from the parties, the appropriate orders (leaving aside costs orders) would appear to be as follows:
1.The appeal be allowed in part.
2.Order 2 of the orders made by Pritchard J in GDA 8 of 2015 on 20 May 2016 (that the appeal be dismissed) be set aside insofar as it relates to the appellant and in lieu thereof, there be orders in terms of order 3 below.
3.(a) The appeal is allowed.
(b)Order 2 of the Tribunal insofar as it relates to the appellant, is set aside and there is substituted the following order:
Pursuant to by‑law 16.1 of the Management Statement, properly construed, the appellant may only use, and any occupier to whom the appellant grants occupancy rights in respect of lot 14 may only use, the lot as a settled or usual abode and, subject to by‑law 16.2.2, not otherwise.
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