Clark v Weinert

[2006] WADC 129

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CIVIL

LOCATION:   PERTH

CITATION:   CLARK -v- WEINERT & ORS [2006] WADC 129

CORAM:   WISBEY DCJ

HEARD:   9 JUNE 2006

DELIVERED          :   23 AUGUST 2006

FILE NO/S:   CIVO 16 of 2006

BETWEEN:   RICHARD MELVILLE CLARK

Plaintiff

AND

MARJORIE MAY WEINERT
WARWICK HAROLD MITFORD ROWELL
GILLIAN ELIZABETH ROWELL
LEE FRANCIS NASH
WESLEY IAN CHARLES NASH
AMRIT LOUISE WORK KENDRICK
GARY ANDREW KENDRICK
JANE WATTS
GLENN NORMAN WATTS
GRAHAM SYDNEY BENSTEAD
AURELIA MARIA MAZZOLENI
CATHERINE JOY MCGEACHIE
RICHARD MITFORD ROWELL
JANICE MARY IRVINE
CRAIG ROBERTSON
LEIGH RICHMOND
KEVIN BECKHAM
JAN IRVINE
First Defendants

OWNERS OF ROSNEATH FARM STRATA PLAN 35452
Second Defendant

Catchwords:

Land - Strata Titles - Resolution for re-subdivision - Application for relief where unanimous resolution required but not obtained

Legislation:

Strata Titles Act 1985 (WA), s 51

Result:

Declaration pursuant to s 51 that resolution sufficient to authorise re-subdivision

Representation:

Counsel:

Plaintiff:     Ms P Cahill

First Defendants           :     Mr G M G McIntyre SC

Second Defendant         :     Not applicable

Solicitors:

Plaintiff:     Beere May & Meyer

First Defendants           :     Mossensons

Second Defendant         :     Not applicable

Case(s) referred to in judgment(s):

McHattie v Tuscan Investments Pty Ltd (1997) 18 SR (WA) 231

Case(s) also cited:

Bassingthwaighte v Butt [1982] Qd R 670

Brisbane Unit Development Corporation Pty Ltd v Sokola Pty Ltd [1983] 1 Qd R 292

Godfrey v Russell (1999) 21 SR (WA) 229

Martin v Bliss, unreported; DCt of WA; Library No D980358; 21 December 1998

Wishart v Henneberry (1962) 3 FLR 171

1. WISBEY DCJ:  By originating summons filed 10 February 2006 the plaintiff, being the registered proprietor of all that piece of land being lot 25 on Certificate of Title Vol 2195 Folio 469, seeks a declaration that the resolution past at a general meeting of the second defendant on 14 January 2006 that Lot 25 be further subdivided by the creation there from of lot 2, 3, 4, 5, 6, 7, 8, 44, 56, 58, 59, 66, 69 and 70 as designated on the plan of subdivision attached to the agreement for staged development with each proprietor, be deemed to have been past as a unanimous resolution.

2. The application is made pursuant to s 51 of the Strata Titles Act 1985 (as amended) which relevantly provides that in any situation where under the Act a unanimous resolution or a resolution without dissent is necessary to authorise the doing of any act, and such a resolution is not obtained although supported to the extent necessary for a special resolution, a person included in the majority in favour of the resolution may apply to the District Court to have the resolution declared sufficient to authorise the particular act ‑  for the resolution to be deemed to have been passed as a unanimous resolution or a resolution without dissent.

3. Section 3 of the Act defines a unanimous resolution in expected terms.

4. Section 8A of the Act, dealing with the requirements for the registration of a plan of re‑subdivision, requires inter alia that the proposed re‑subdivision has been consented to by unanimous resolution of the strata company.

5. The history of this matter so far as it is relevant to the issue before the Court is set out in detail in the plaintiff's affidavit sworn 15 March 2006 and can be shortly stated as follows.

   (i)The land the subject of survey‑strata plan 35452 was formerly all that parcel of land more particularly described as Portion of Sussex Location 4208 and being the whole of the land contained in Certificate of Title Vol 2135 Folio 148 known as Rosneath Farm.  The plaintiff was the registered proprietor thereof.

   (ii)On 14 March 1996 the plaintiff entered into a development agreement with Rowell Consulting Services Pty Ltd with the intention that the said land would become the subject of a survey‑strata plan and be developed in accordance with permaculture principles.

   (iii)Survey‑strata plan 35452 was registered with the Registrar of Titles on 11 February 1999, the registered documents including:

   (a)a management statement

   (b)a notice re unit entitlement schedule

   (c)a pro‑forma agreement to facilitate staged development

   (d)a plan entitled "Rosneath Farm showing the whole development with lots numbered for the management statement"

   (e)a notification of change of by‑laws

   (f)the strata plan

   (iv)Warwick Harold Mitford Rowell and his wife Gillian Elizabeth Rowell have at all material times been directors of Rowell Consulting Services Pty Ltd and of more recent times, their son Richard Mitford Rowell has also been a director.

   (v)At the time of the registration of the Strata Plan, the Rowell's understood that the said land would ultimately be subdivided into 70 residential survey‑strata lots and eight common property lots, and that there would be a staged development with ongoing subdivisions to achieve that result.

   (vi)Because the contemplated 70 residential lots were to be stage released, Warwick Rowell prepared a document described as a facilitation agreement, and it was a term of the contract for sale of each lot on the strata plan that the purchaser of the lot enter into a facilitation agreement with the plaintiff to preclude withholding of consent to any re‑subdivision necessary to achieve the contemplated development.  In the facilitation agreement the purchaser surrendered his right to vote on a re‑subdivision, to the plaintiff, and forewent the requirement of notification of any meeting of the strata company called to deal solely with re‑subdivision.  Any purchaser disposing of any lot purchased, agreed as a term of sale to require future prospective purchases to enter into a facilitation agreement with the plaintiff.  The right surrendered was limited to voting in respect of re‑subdivisions necessary to create one or more of the 70 strata lots designated in the original plan.

   (vii)By contract of sale dated 10 June 2000 the plaintiff sold lot 23 to the Rowell's and consistent with the sub‑divisional concept, the contract included a facilitation agreement.  The same position applied on the sale by the plaintiff to the Rowell's of lot 3 on 23 December 1998.

   (viii)At the present time, apart from lot 1 of which the plaintiff is the registered proprietor, 13 other lots have been created on the strata plan, and each and every purchaser of those lots entered into a facilitation agreement with the plaintiff.

   (ix)In or about 2001 the plaintiff became engaged in controversy with Rowell Consulting Services Pty Ltd and Warwick Rowell and proceedings were commenced in the Supreme Court.

   (x)On 22 November 2002 the Rowell's transferred lot 23 to Marjorie May Weinert but in breach of their contractual obligation, failed to ensure that she entered into a facilitation agreement with the plaintiff.  The Rowell's in fact entered into an agreement with Ms Weinert whereby she purported to appoint Rowell Consulting Services Pty Ltd her proxy in respect of re‑subdivision voting rights.

   (xi)At an extraordinary general meeting of the strata company held 14 January 2006, the plaintiff proposed by way of motion "that lot 25 on Certificate of Title Vol 2195 Folio 469 be further subdivided by the creation there from of lots 2, 3, 4, 5, 6, 7, 8, 44, 56, 58, 59, 66, 69 and 70 as designated on the plan of subdivision attached to the agreement for staged development with each proprietor."  When the motion was put to the vote the plaintiff's proxy in relation to lot 1 and lot 25 supported it, as did the plaintiff pursuant to the facilitation agreements in relation to all other lots save for lot 23.  Mr Warwick Rowell, as representative of Rowell Consulting Services Pty Ltd proxy for Ms Weinert, voted against the motion.  In the result support for the motion was 9880 units out of a total unit entitlement of 10,000, a percentage unit entitlement of 98.8 per cent.  Accordingly, although the motion was supported to the extent necessary for a special resolution, it failed to receive the unanimous support required by the Act.

   (xii)It is apparent from the papers that Marjorie May Weinert would have been aware at the time of her purchase of lot 23 from the Rowell's, of the subdivisional concept.

Conclusions

1. Pursuant to facilitation agreements the plaintiff exercised the voting rights surrendered to him by the proprietors of various lots.  A number of them, had they not surrendered their voting right, would have opposed the motion because they purchased on the basis that the land would be developed along the lines of a permaculture themed echo village.  They believe (on reasonable grounds) that the plaintiff has contracted to sell the lots to be released by the re‑subdivision to Midway Asset Pty Ltd, Silver Fox Investments Pty Ltd and Churchlands Holdings Pty Ltd, which Entities are not imbued with any permaculture ethos but principally interested in quick profit by the sale of the lots following conversion of the land into a green title subdivision.  The affidavits of Warwick Harold Mitford Rowell sworn 18 April 2006 (a co‑proprietor of lot 3), Jan Irwine sworn 7 April 2006 (the proprietor of lot 24), Graham Sydney Benstead and Gillian Elizabeth Rowell sworn 7 April 2006 (co‑proprietors of lot 17 and lot 3 respectively) and Edward John Wykman sworn 9 April 2006 (the proposed purchaser of lot 58) are eloquent of the general fear and unhappiness concerning the commercial imperatives of the Entities referred to.

2. In resolving the present controversy, having regard to the fact that the plaintiff cast votes surrendered to him by lot proprietors who would not themselves have supported the resolution, it becomes necessary to determine whether there is anything in the Act to preclude a proprietor of a lot from surrendering to another the voting rights which are his unit entitlement, in the manner provided for in the facilitation agreement.  I am unable to find anything in the Act which supports such a proposition. 

3. Section 3 of the Act defines:

   (i)a unanimous resolution inter alia as one "at which all persons entitled to exercise the powers of voting conferred under this Act are present and vote, either personally or by proxy". 

   (ii)a special resolution as a resolution that complies with s 3B and s 3C and has the meaning given by s 3CA, the votes required for such special resolution being "the votes of persons entitled to exercise the powers of voting conferred under this Act voting at the meeting either personally or by proxy" (s 3B(4)). 

4. I agree with counsel for the plaintiff that the language is careful and deliberate, referring to the votes of persons entitled to exercise the powers of voting conferred under the Act, as distinct from the votes of lot owners or proprietors.

5. In the result there is nothing in the Act to suggest that the surrender provision of the facilitation agreement is invalid, and consequently nothing to impugn the voting support for the motion in question  on 14 January 2006.

6. The issue is whether in all the circumstances it is proper for the Court to declare the resolution sufficient to authorise the proposed re‑subdivision.

7. In McHattie v Tuscan Investments Pty Ltd (1997) 18 SR (WA) 231 at 235, I identified some of the principles to be taken into account in exercising the discretion under s 51. They are applicable. The critical factor however is that the resolution seeks to do no more than perfect a subdivision that was contemplated and clearly understood by all parties from the outset. The difficulty that has arisen is that some of the lot proprietors fear that following the re‑subdivision the proposed purchasers of the newly created lots will endeavour to transform the Survey‑strata into a fundamentally different form of land holding. Their fears appear to be well founded, but they have the protection of the Act in that it could only be achieved by a subsequent unanimous resolution. The contemplated proposal would derogate from those proprietary rights which were in the proprietors' contemplation at the time of the purchase; a factor which would weigh heavily against judicial support for the requisite resolution.

1. The resolution passed at the meeting on 14 January 2006 is declared sufficient to authorise the re‑subdivision.