CLOUGH and THE OWNERS OF BENGARA FLATS STRATA PLAN 5500 - [2010] WASAT 15

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: STRATA TITLES ACT 1985 (WA)

CITATION: CLOUGH and THE OWNERS OF BENGARA FLATS STRATA PLAN 5500 [2010] WASAT 15

MEMBER: MR C RAYMOND (SENIOR MEMBER)

HEARD: 9 OCTOBER 2009

DELIVERED : 9 FEBRUARY 2010

FILE NO/S: CC 1175 of 2009

BETWEEN: EDWARD CLOUGH
Applicant
AND
THE OWNERS OF BENGARA FLATS STRATA PLAN 5500
Respondent

Catchwords:

Strata Titles Act 1985 (WA) - Application to vary contributions pursuant to s 99 of the Strata Titles Act 1985 (WA) - Order sought to restrict expenditure for particular repairs - Order sought for Council to refund expenditure incurred - Application also for orders under s 89 of the Strata Titles Act 1985 (WA) to vary interest payable and for order under s 90 of the Strata Titles Act 1985 (WA) for inspection of documents - Whether application should be dismissed as an unjustified proceeding under s 47 of the State Administrative Tribunal Act 2004 (WA)

Legislation:

State Administrative Tribunal Act 2004 (WA), s 46, s 47, s 47(1), s 48, s 49
Strata Titles Act 1985 (WA), s 36, s 36(4)(b), s 43, s 47, s 47(1)(a), s 47(1)(b), s 81, s 89, s 90, s 97, s 99, s 99(1)(a), s 99(1)(e)
Strata Titles General Regulations 1996 (WA), reg 26, reg 29

Result:

Application dismissed

Category: B

Representation:

Counsel:

Applicant: Self-represented
Respondent: Mr G Johnson (Representative)

Solicitors:

Applicant: Self-represented
Respondent: Mr G Johnson (Representative)

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

Commodore Homes (WA) Pty Ltd and Deegan [2007] WASAT 45

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

The applicant applied for a range of orders under the Strata Titles Act 1985 (WA) aimed at redressing criticisms levelled at the budget passed by the respondent for the 2008/2009 financial year, to recover alleged unauthorised expenditure, to vary interest chargeable by the respondent, and for access to documents.
There was a long history of disputation between the parties and the respondent, which opposed all of the relief claimed, sought that the proceedings be dismissed as unjustified proceedings on the basis that they constituted an abuse of process, were frivolous and vexatious and lacking in substance.
The Tribunal rejected the criticisms which were raised against the budget and found that there was no basis for intervention by the Tribunal. Similarly, the Tribunal found that there was no basis to grant any relief aimed at preventing the respondent from engaging a contractor to carry out certain repairs caused by concrete cancer. The Tribunal found that the members of the strata company had arrived at an appropriate decision based on the information that was before them and that no evidence was before the Tribunal to support a finding that it would be inappropriate for the respondent to engage a particular contractor.
The Tribunal found that the respondent had undertaken unauthorised expenditure in instructing solicitors to take recovery action for alleged arrear levy contributions owed by the applicant. However, ongoing expenditure was authorised at a subsequent Extraordinary General Meeting of the strata company and all owners (except the applicant) supported the action taken. Consequently, it was obvious from the outset that it would be an exercise in futility to require the members of the strata council to refund the expenditure incurred.
A claim to vary the interest rate chargeable by the respondent was also rejected. The Tribunal declined to follow the rationale of an earlier decision of the Tribunal in Clough and The Owners of Bengara Flats Strata Plan 5500 (matter No CC:95/2007), which suggested that a change in market overdraft rates would support a variation of interest. That was because it was clear that s 89 of the Strata Titles Act 1985 (WA) did not give a general right to vary the prescribed interest rate: a right of review was only given when the strata company consciously made a decision to apply a different interest rate, and that had not occurred.
The Tribunal also declined to make any order granting the applicant access to documents as sought. The Tribunal was not satisfied that the respondent had wrongfully withheld documents, when there was no evidence that the applicant had applied for access to the documents in question, many of the documents were subject to legal professional privilege and concerned related proceedings between the parties in the Magistrates Court, or were to be discovered pursuant to an order for discovery made in those proceedings, and the remaining documents, although they would have been relevant to these proceedings, were no longer relevant, as the proceedings have now been finally determined. The applicant had not identified any of these documents until shortly prior to the hearing.
The Tribunal found that, in a general sense, the proceedings were unjustified and an abuse of process because the applicant had deliberately not attended general meetings of the strata company and was using the Tribunal as a mechanism to attempt to enforce his management views on the respondent if decisions were made with which he disagreed. The Tribunal rejected the respondent's contentions that the proceedings were vexatious.
The Tribunal concluded that it would be of little practical benefit to make an order dismissing the matter as an unjustified proceeding under s 47 of the State Administrative Tribunal Act 2004 (WA) as it was unlikely that any further proceedings would relate to the same matters now determined, although they may be of the same kind. At the same time, the Tribunal cautioned the applicant that, if he did not attend general meetings and participate sensibly in the business conducted at those meetings, he ran the risk that the Tribunal dealing with a future dispute, and having regard to the findings in this matter, might dismiss the future proceedings as an abuse of process.

Introduction

At the conclusion of the hearing of this matter on 9 October 2009, and after hearing the parties' submissions, the Tribunal indicated that it intended to dismiss the application, but that it would be necessary to reserve the decision, in order to determine whether that dismissal would be solely based on the merits of the application, or whether the application should also be dismissed under s 47 of the State Administrative Tribunal Act 2004 (WA) (SAT Act) as an unjustified proceeding. The effect of dismissal on this latter basis would mean that the applicant could not bring another proceeding of the same kind in relation to the same matter without the leave of a judicial member of the Tribunal.
These are now the Tribunal's reasons for decision.

The application and background

The application sets out under section A to section E inclusive, the orders sought and the grounds therefor. The parties' submissions have been under headings corresponding to those alphabetical sections, and that format is accordingly also followed in these reasons for decision.
The orders sought, in an abridged format, are as follows:
Order A
i)An order under s 99(1)(a) and s 99(1)(e) of the Strata Titles Act 1985 (WA) (ST Act) for the variation or manner of payment of contributions 'estimated in terms of the Strata Company Budget for the period 2008/2009';
ii)An order to require the council of owners to establish a fresh budget by the convening of an Extraordinary General Meeting (EGM) to address particular identified budget items;
Order B
An order 'in which the council of owners be not permitted to exceed the reserve fund of the strata company ($7,000) for the purpose of repair work of stairways and balustrades …';
Order C
An order 'under the provisions of s 47(1)(a) and s 47(1)(b) [of the ST Act] in which the council of owners be required to refund some $1,000 that was used from the strata company funds';
Order D
An order under s 89 of the ST Act to vary 'certain rates of interest in which no interest be chargeable';
Order E
An order under [s 90] of the ST Act for inspection of 'all books, all electronic records etc of the strata company as more particularly defined in the grounds … '. The grounds refer to an order being sought 'from the period of Order under matter no [930] of 2008'.
Strata plan 5500 was registered on 10 November 1977. The building shown on the plan consists of three storeys and comprises six lots, each having a single unit entitlement. Mr Edward Clough (applicant) became the registered owner of Lot 4 on 19 December 2000. Prior thereto, Lot 1 was owned by Mr Ronald Talbot Milbourne, who now resides in the lot as a tenant. The strata role reflects that the remaining lots are owned as follows:
•Lot 1 and Lot 2 by Ms Margaret Hillman;
•Lot 3 by Ms Lynley Thomas and Mr Gregory Johnson;
•Lot 5 by Mr Gregory Johnson; and
•Lot 6 by Ms Lynley Thomas and Mr Charles Thomas.
According to the written statement of Mr Milbourne, there was a time when the building was entirely owner occupied. At present, according to Mr Johnston, whose evidence on this aspect was not challenged, one of the owners, whom he did not identify, is an owner occupier. It is apparent that there has been a shift from entire owner occupation to a situation where at least five of the lots are held exclusively as investment properties.
Mr Milbourne's uncontested evidence is that when the building was entirely owner occupied, the owners cooperated with each other and shared the responsibility of managing the strata company, and took care not to incur any costs that were unnecessary. This situation prevailed until about 2000.
There has been a long history of disputation between Mr Clough and the respondent. The minutes of the Annual General Meeting (AGM) of the respondent held on 27 September 2007 (Exhibit 4) reflect that there had been litigation between the respondent and Mr Clough for the recovery of arrear levies. This is the only interference to be drawn from references in the minutes to the discussion under item 12 General Business concerning whether it would be necessary to resort to enforcing a Seizure and Sale Order issued against Land relating to the applicant. Reference is made to the existence of a debt at handover from Airey & Associates (which is understood to be a previous firm of strata managers) for $2,774.03, being $1,073.83 'normal levy, $1,500 for special levies and interest of $200.20'. The minutes reflect:
These arrears have been ongoing for numerous years and this has negatively affected the strata company's ability to manage their [sic] financial affairs and financial commitments as and when they fall due.
As at the date of the hearing in this matter, on 9 October 2009, there were opposed proceedings on foot in the Magistrates Court between the strata company and the applicant concerning monies allegedly due by the applicant to the strata company. For a considerable time, the applicant has not attended any general meetings with the strata company. While he was in an unfinancial state, he had no voting rights (except in relation to matters requiring a unanimous resolution or a resolution without dissent). At a directions hearing on 20 August 2009, the applicant explained his non-attendance at general meetings as follows:
I feel, as I've said earlier in the piece here, that it's something of futility, because I could never get anything up there. The people, the numbers, work against you. The only way I could of sort of bring any semblance of orders and things is through [the State Administrative Tribunal] itself, in terms of what I consider a reasonable proposal.
The reference to the State Administrative Tribunal (SAT) refers to four previous proceedings commenced by the applicant against the respondent, being matter No CC:2284/2005, matter No CC:95/2007, matter No CC:930/2008 and matter No CC:241/2009.
Matter No CC:2284/2005 proceeded to a final hearing. The applicant was successful in obtaining orders that the respondent permit inspection of strata records.
Matter No CC:95/2007 also proceeded to a final hearing but was dismissed. The applicant had sought an order under s 89 of the ST Act varying the interest chargeable on his arrear levy contributions.
In matter No CC:241/2009, the applicant brought proceedings because he considered that the respondent was failing in its duty to carry out particular repairs to the building attributable to what is commonly described as concrete cancer. In that matter, the Tribunal made a number of orders by consent at a directions hearing on 5 March 2009, which ensured that the respondent would convene an EGM to consider the issue, and that the applicant would provide the strata manager with three written quotations for that purpose. The applicant duly procured those quotations and provided them to the strata manager and the matter was considered at an EGM on 7 April 2009.
Although there may have been a dispute about whether or not the applicant was entitled to vote at the EGM, he would have been able to attend and to speak to the quotations, but chose not to do so, no doubt for the reasons given above. The applicant had, however, taken it upon himself to publish a newsletter concerning the operation of the strata company, which he sent to members from time to time. Newsletter No 4 (which, like all the other newsletters, is not dated) by its contents clearly preceded the EGM held on 7 April 2009, and in it, the applicant discussed the three quotations and he set out his views on them, as well as his recommendation that the lowest quotation be accepted. The applicant's views were therefore before the meeting, even though he did not attend.
The members decided at the EGM not to accept any of the quotations because of the degree of price variation from $4,500 to $15,810. Instead, the meeting resolved that the council of owners be empowered to meet with the two contractors who had provided the two higher quotations of $15,810 and $9,900, and to choose the contractor to be engaged. It is common cause that as at the date of this meeting, the reserve fund held only approximately $7,000 so that if either quotation was accepted, there would be a need to raise further funds. The meeting therefore resolved that the repairs would be funded from current funds in the reserve fund and a special levy. The meeting also resolved that the council of owners be empowered to set the amount of the special levy and the date for payment, provided that the special levy did not exceed $500 per lot. The minutes also reflected that a further special levy would be imposed for this repair in view of the delay of one owner (obviously a reference to the applicant) to pay the previous special levy for this item, as specified by a general meeting in 2005.
The applicant, by order B, effectively seeks to set aside the above resolutions. The order as sought is inappropriate and should be framed in terms consistent with the powers bestowed on this Tribunal under s 97 of the ST Act relating to the setting aside of resolutions. That, however, is a mere technicality, because, if relief was warranted, the applicant would be given an opportunity to apply for an amendment to the application to enable the Tribunal to deal with the substantial merits of the dispute and avoid the restrictions imposed by s 81 of the ST Act, which precludes the Tribunal from making an order which differs in substance from the order sought.
Prior to the first directions hearing, the respondent filed a response to the application opposing the relief sought on its merits, but also raising that the applicant was allegedly acting vexatiously and frivolously, particularly having regard to the history of previous proceedings before the Tribunal. In a subsequent submission, the respondent argued that the proceeding be dismissed as an unjustified proceeding, and asserted that it constituted an abuse of process, and was misconceived, in addition to being frivolous and vexatious.

The issues for determination

The issues for determination can be dealt with under the following headings:
1)Whether, on the merits of each claim, the applicant is entitled to the orders sought, or any of them.
2)Whether, in all the circumstances, the claim should be dismissed as an unjustified proceeding pursuant to s 47(1) of the SAT Act.
For the purposes of determining the issues, the Tribunal, in accordance with its usual practice in matters of this nature, will have regard to all of the documentation filed with the Tribunal, together with the evidence provided and information supplied during the hearing, including documentary evidence. That includes an expanded response from the respondent and reply thereto from the applicant and the documents which were attached, as well as submissions received from two owners in support of the respondent. During the course of the hearing, the parties made frequent references to the course of the earlier proceedings before the Tribunal, to which reference has been made above. The Tribunal has therefore had regard to the Tribunal's files in relation to those matters.
Each of the issues which need to be determined to finally dispose of the matter will now be addressed.

Order A variation of contributions and reconsideration of budget

Section 99 of the ST Act empowers the Tribunal to order the variation of any contribution levied under s 36, if the Tribunal considers that the amount levied is unreasonable. The applicant has provided a copy of the budget to apply from 1 July 2008 in respect of the year through to 30 June 2009. Particular expenses are attacked as being unreasonable. The budget reflects anticipated expenditure of $7,000 per annum.
The applicant's initial basis of criticism is that investor owners are not sufficiently concerned to constrain costs because of their ability to claim costs as a tax deduction. As pointed out by Mr Johnson for the respondent, this appears to overlook the fact that the applicant is equally entitled to claim expenses as a tax deduction because he does not reside in his lot, which is leased to Mr Milbourne. In any event, the argument is a weak one. Even with the advantage of a tax deduction, a real cost is incurred, and it is unlikely that all the other owners are willing to incur costs simply because part of that cost can be recouped through a tax deduction. An example of this is reflected in the Minutes of the AGM dated 27 September 2007 (Exhibit 4, item 9 Financial Report), where the members agreed to cease using a green wastage bin in order to effect a saving of $300.
In support of this limb of the argument, the applicant referred to the increase in levies from $2,775 in 1998 to $7,000 in 2008. That is, of course, the total amount of the levies in respect of six lots. Mr Johnson gave evidence that, for an ageing building, which he described as being approximately 40 years of age, the amounts being levied are hardly surprising. That, of course, does not explain an increase in the administrative levy as opposed to the special levies which have been raised to cover major repair expenses. But, when one takes into account that at the commencement of this period, the building was not professionally managed, the overall costs are put in a more realistic perspective.
The particular expenditure which is criticised falls into two categories. Firstly, administrative costs charged by the managing agent, which total $2,890. These charges include management fees, the provision of accountancy taxation services, disbursements for photocopying, bank charges, attendance at meetings and 'other expenses' of $210. The second category of costs relates to provisions for general repairs to the building, test/vermin control, plumbing, roof maintenance and maintenance of the lawns and gardening totalling $2,200.
Mr James Donnelly, the strata manager, gave evidence as to the basis upon which the budget had been established, drawing from his experience in setting up budgets for approximately 100 strata companies each year. The minutes of the AGM dated July 2008 (Exhibit 6) reflect the meeting's review of the proposed budget, and in particular, various adjustments which were made to it.

As far as the administrative costs are concerned, the applicant referred to a spreadsheet (Annexure B to the application) to support his contention that the amount included in the budget for administrative expenses was excessive. In the grounds to the application and in his evidence, the applicant contended that the spreadsheet showed expenses for the entire year which were selfevidently substantially less than the budgeted amount. Excluding expenditure reflected in the spreadsheet for insurance premiums, electrical repairs, a contribution towards a dividing fence and utility charges, only $630.53 is shown for charges of an administrative nature. In the grounds to the application, the applicant stated:
While the above statement [referring to an income and expenditure statement] assumes a period from Jan to June 2008., [sic] the detailed expenses [see attached statement marked B] demonstrate that costs were not of large quantum [sic] and were spread over the financial year …
In fact, an examination of the spreadsheet (Annexure B) shows that all of the expenditure incurred was incurred between 10 March 2008 and 19 June 2008. It was therefore not reflective of the expenses incurred over a full year. This the applicant conceded only in closing submissions.
Turning to the budgeted expenses relating to maintenance costs, the applicant endeavoured to demonstrate that the amount allowed for maintenance of the grounds was excessive, based on the number of times when contractors had attended the parcel. Mr Milbourne also stated that the contractors had informed him that the rate charged was $60 per hour. The applicant contended that the services were entirely unnecessary, as Mr Milbourne was, in any event, looking after the gardens. There is no doubt that the respondent has not objected to Mr Milbourne carrying out gardening work.
There is, nevertheless, a vast difference between allowing a resident to carry out such gardening work as the resident may wish to undertake and being reliant on that person to do so. This reflects the divergence in approach between the majority of owners and the applicant. The majority clearly wish the building to be properly and professionally managed, and that is a decision which the applicant must simply accept.
It is noted that $1,888.12 was carried forward from the previous year and, as contributions to be levied equal expenditure, there was, in effect, an anticipated surplus in that amount. But given that there had been a history of the applicant not paying levies, which had impacted on the management of the respondent (Exhibit 4 item 12), and the various maintenance issues facing the respondent, that can be justified as an appropriate contingency allowance.
The applicant has not demonstrated that the budgeted expenditure is excessive, and no intervention by the Tribunal is therefore warranted. This aspect of the application will be dismissed.

Order B restricting expenditure of the reserve fund

The factual background, as set out above, outlines that it was the applicant who required the respondent to obtain tenders to address the concrete cancer repairs as claimed in matter No CC:241/2009. Following a directions hearing, the Tribunal issued an order with the obvious concurrence of the parties that the respondent convene an EGM to address the issue, and for that purpose, the applicant was to provide the strata manager with three written quotations. It can be inferred from this, and the applicant's entire conduct of these and other proceedings, that the applicant wished to have an involvement in that process.
Further, although the applicant did not attend the EGM held on 7 April 2009 to consider the quotations which he had obtained, the applicant had set out his views in a newsletter, addressed to members, prior to the meeting date. In that newsletter, the applicant motivated an acceptance of the lowest quotation, but in relation to the quotation from ASR All Surface Restorations (ASR) for a total of $9,900, he stated that the provision of a protective coating for $3,300, included in the total amount, should be left over for later consideration.
Mr Johnson gave evidence as to why he had recommended to the meeting that the ASR quotation be accepted. He was influenced by the guarantee which was offered. He stated that the meeting had not been interested in the lowest quotation, advocated by the applicant, because there were doubts about the standing of the contractor. The quotation contained no ABN, the contractor was not listed in the telephone directory and offered no guarantee.
After the EGM, and presumably after the applicant became aware of the outcome, he carried out further investigations and endeavoured to put forward documentation to the respondent as to why a protective coating was not necessary. This was by letter dated 6 May 2009 addressed to the strata managers. In that letter, the applicant reported discussions which he had had with the Concrete Institute of Australia reporting the view of an unnamed officer that a detailed explanation should be provided as to why a protective coating would be of benefit (Annexure E to the application).
It is difficult to arrive at the correct characterisation of the nature of the order sought by the applicant in order to determine under what section of the ST Act the Tribunal has jurisdiction to make the order. It might best be considered as an attempt to set aside the resolutions passed at the EGM authorising the council to discuss the quotations with the two higher tenderers and to engage one of them. In that event, it must be shown in some way that the provisions of the ST Act were not complied with in relation to the meeting. There is no evidence to that effect.
In any event, assuming that this technical difficulty could be overcome, it is patently clear that the members at the EGM arrived at an appropriate decision based on the information which was before them. Further, no evidence is before the Tribunal which is sufficient to support a finding, even now, that it would be inappropriate for the respondent to proceed to engage ASR and to have the protective coating applied. The resolution passed was for the council to have further discussions with the two higher tenderers. This aspect of the application must therefore be dismissed.

Order C refund of expenditure

The applicant asserts that the chairman of the council of owners incurred expenditure of $1,000 in respect of legal costs which was not authorised by the 2008/2009 approved budget. The applicant refers to the minutes of the EGM held on 7 April 2009 which recorded:
4.4.1Discuss ongoing cost of Debt Recover [sic] from lot 4
The meeting was informed that the Strata Company had to lodge the sum of $1,000 with Mossenson Solicitors for the ongoing work to recover outstanding levies from lot 4. Current outstanding levies for lot 4 [are] $1,385.99[.]
The meeting resolved that the Council of Owners be empowered to spend up to $2,000 on this item. If further funds were required, the Council of Owners would convene a general meeting for this item and any other at the time.
Proposed: Mr C Thomas. Seconded: Mrs L Thomas. Motion: Passed
Mr Johnson's evidence was that, as at the date of the EGM, the costs had not been incurred and that the resolution was sought to cover anticipated future expenditure. Mr Donnelly, the strata manager, who was responsible for instructing the strata company's solicitors, advised that they had been instructed to recover the alleged debt from the applicant in July of the previous year, but it was not until February 2009 that a summons was issued. Before the summons was issued, on approximately 31 January 2009, the solicitors requested payment of $395 to cover the cost of issuing a summons.
No express approval of members in general meeting was required of this expenditure, because that cost was within the expenditure permitted by s 47(1)(b) of the ST Act and the amount prescribed by reg 29 of the Strata Titles General Regulations 1996 (WA) (ST Regulations) of $65 per lot.
The evidence did not disclose precisely what instructions were given to the solicitors in July 2008. The fact that the solicitors called for funds to cover the costs of issuing a summons in February 2009 leads to an inference that some restriction was placed on the initial instructions. It is evident that the initial work could not have involved much more than the making of a demand on the applicant and perhaps some other correspondence. Nevertheless, when regard is had to the prescribed limit on expenditure of $390, and the expenditure incurred to cover the cost of issuing a summons of $375, it is inevitable that the total expenditure incurred, without any authority having been obtained under the mechanisms of s 47 of the ST Act must have exceeded $390. The liability for the professional services provided by the solicitors arises once instructions have been given and work has been undertaken. In that sense, the council has undertaken expenditure, within the meaning of s 47(1) of the ST Act, in excess of the expenditure permitted per lot, without any other form of authority having first been obtained under s 47 of the ST Act.
Nevertheless, in the circumstances in which that expenditure was incurred, and having regard to the majority approval of action being taken against the applicant, there is absolutely no cause to contemplate requiring the members of the council to refund whatever expenditure had been incurred prior to the EGM on 7 April 2009. To do so would be an exercise in futility, and it is manifestly clear that, properly advised, the application for this relief should not have been pursued. This aspect of the application also therefore falls to be dismissed.

Order D to vary interest rate

The respondent has, in the past, charged the applicant penalty interest on arrear levies at a rate of 15% per annum, which is the rate prescribed pursuant to reg 26 of the ST Regulations. As already stated, a previous application to review the interest being charged on arrears was dismissed by the Tribunal in matter No CC:95/2007.
During the course of the hearing, it became apparent that, although the minutes of the EGM dated 7 April 2009 referred to the action against the applicant being for the recovery of levies, the applicant contends that he is now uptodate with all levy payments, and that the amount for which he is being sued relates to costs incurred by the strata manager, for which he denies liability. Until that became clear, the Tribunal had understood that the claim for variation of the interest related to a real dispute between the parties, because interest was being charged and was being claimed in the Magistrates Court action. Pursuant to s 36(4)(b) of the St Act, a liability for interest only arises in respect of the failure to pay any contribution levied under that section. It does not apply in relation to any other debt which may be owed to the strata company. If the applicant is correct, the proceedings to vary the interest rate are therefore entirely academic and the Tribunal should, on that basis, decline to determine the matter. However, if the applicant's liability is in relation to a failure to pay a contribution levied under s 36 of the ST Act, it is necessary to determine the dispute, because that is not a matter which could be dealt with in the Magistrates Court. Section 89 of the ST Act empowers only this Tribunal to vary the interest rate being charged. Section 89 of the ST Act provides as follows:
Where, pursuant to an application by a proprietor for an order under this section, the State Administrative Tribunal considers that the strata company for the scheme to which the application relates has determined an unreasonable rate as the rate of interest chargeable for the late payment of a contribution levied under section 36, the State Administrative Tribunal may, in respect of such contributions as are specified in the order and instead of the rate so determined, order that no interest be so chargeable or that the rate so chargeable be a rate specified in the order.
The applicant submits that, in the previous matter No CC:95/2007 in which he was unsuccessful, the Tribunal, which was differently constituted, concluded that the interest charged should not be varied, on the basis that there was no evidence to suggest that the charge was unreasonable, based on evidence provided by the respondent concerning overdraft interest rates. Oral reasons for that decision were given on 16 April 2007, and a transcript supports the applicant's contention that this was an essential aspect of the Tribunal's reasoning for dismissing the application.
In order to meet this identified deficiency in the evidence provided on the previous occasion, the applicant in this matter gave evidence of research which he had undertaken, correspondence with Landgate, parliamentary counsel, and the executive officer of this Tribunal, in order to investigate the reason for interest being set at this particular rate. These investigations failed to disclose the rationale, and the applicant suggested that guidance should be obtained from an extract from a Law Reform Commission of Western Australia recommendation that the interest should be linked to bank overdraft rates and that the appropriate rate should be prescribed by regulation from time to time.
The applicant submitted that interest rates had reduced significantly since the earlier hearing, and therefore, following the rationale of that decision, the Tribunal should now reduce the interest rate recoverable.
It is trite that the decisions of the Tribunal do not create binding precedent. Nevertheless, consistency in decision-making is important, because inconsistency brings the process of decisionmaking into disrepute, and is incompatible with accepted notions of justice: see Commodore Homes (WA) Pty Ltd and Deegan [2007] WASAT 45 at [20] [24].
Accordingly, the rationale of previous decisions of the Tribunal should be followed unless considered to be clearly wrong, and, as the applicant's evidence about reduction of interest rates was not challenged, the interest rate should be reduced on that rationale. However, there is no evidence to suggest what would be a reasonable rate, the applicant simply submits that no interest should be charged.
The respondent submits that the reventilation of this issue is an abuse of process, that the matter has been determined by the earlier decision, and accordingly, that this aspect of the claim should be dismissed.
The respondent's submissions are not accepted. It has not been suggested that the interest is being charged on the same debt as was the subject of the earlier proceedings, and on the rationale of that decision, a change in market interest rates would justify a different interest rate applying.
Nevertheless, the Tribunal has been driven to a conclusion that the decision in matter No CC:95/2007 is clearly wrong and should not be followed.
Section 36(4)(b) of the ST Act provides as follows:
(4)Any contribution levied under this section
…
(b)if not paid when it becomes due and payable, bears interest on the amount unpaid at the rate of simple interest prescribed, unless the company determines (either generally or in a particular case) that an unpaid contribution shall bear no interest or interest at a lesser rate; and
…
The position of the respondent in the earlier proceedings was that the prescribed rate of interest applied. It had not determined that, in the circumstances of the case, any other, lower interest rate should be charged.
Section 89 of the ST Act, as set out above, reflects that this Tribunal can only vary the interest rate where the strata company 'has determined' an unreasonable rate as the rate of interest chargeable.
The scheme of the legislation is therefore that, in the absence of any decision to the contrary, the prescribed rate of interest applies. If the company determines that a lower interest rate is to apply, presumably because the debtor puts forward hardship grounds, or for some other good reason, and the strata company acknowledges the existence of such factors and therefore determines a different rate, it is only the determination of an unreasonable rate which is reviewable.
There is nothing in the evidence before this Tribunal to suggest that the applicant has ever sought from the respondent that the respondent should determine that a lower rate, or that no interest should be charged, nor that the respondent, of its own volition, has made any decision to that effect. To the contrary, the respondent clearly maintains that the prescribed rate should apply. The application in relation to this aspect of the matter must also be dismissed.

Order E access to documents

The order sought is for the inspection of all books and all electronic records 'etc' as defined in the grounds. The grounds state that a new order is sought under s 43 of the ST Act 'from the period of Order under [matter No CC:930/2008]. The date of the order discussing those proceedings is 5 September 2008 and that is taken to be the earliest date of the records sought to be inspected.
The scope of the order on any basis is extremely wide. Only in a submission by way of reply filed on 30 September 2009, that is, 10 days before the hearing, did the applicant define more precisely the documents which were sought. They are as follows.
1)All communications between Proactive (the strata manager) and the council of owners and solicitors Mossensen's as and from 4 July 2008.
2)All emails between Mossensen's and Proactive 'prior to January 2009 till now'.
3)All records between Proactive, Mr Johnson and Mossensen's concerning the breach of orders of the Magistrates Court.
4)The financial records of Proactive relating to further information sought by the solicitors (Mossensen's) 'reinvoicing and payments that they rely on and any claim at the Magistrates Court'.
5)The records including council records or all estimates prepared by Proactive for the 2008 budget.
6)All electronic records, emails, faxes and the like between Mr Johnson in his capacity as chairman of Proactive from 5 September 2008 to establish all authorisations from the council associated with the strata company and the applicant.
7)All records, including electronic records, relating to the applicant that have been sent to Proactive or Mr Johnson and their responses.
8)The original handwritten minutes of the 2008 AGM and the EGM held on 7 April 2009.
9)Statements of funds and expenditure from the 2008 AGM to date.
Section 90 of the ST Act grants the Tribunal a discretion; the Tribunal may make an order for the supply or making available of any information, record or document, as the case may require, if the Tribunal considers that the strata company, administrator, chairman, secretary or treasurer of the strata company has wrongly withheld information or failed to make available for inspection a record or document that, under the ST Act, the applicant is entitled to inspect. It is necessary to find that, in this case, the strata company has acted wrongfully in refusing to allow inspection of documents.
The applicant has produced no evidence of any prior request to the respondent for access to the documents now sought. As indicated, they have only been identified in a replying document filed shortly before the hearing. On that basis alone, this aspect of the application should be dismissed.
Mention has already been made of the existence of litigation between the parties in the Magistrates Court. Annexure D to the replying documents reflects that the Magistrates Court ordered discovery of all relevant documents by 27 November 2009. It cannot be said that the respondent has wrongfully withheld documents to which legal professional privilege attaches. That privilege is a fundamental cornerstone to our system of litigation and the right to seek legal advice without fear of disclosure. All of the documents referred to in category 1 to category 3 above are subject to that privilege and the applicant is not lawfully entitled to inspect them.

Any documents to which the applicant is otherwise entitled within category 4 will, in any event, have to be discovered and made available for inspection pursuant to the orders made in the Magistrates Court. There is therefore no need for relief to be provided in this jurisdiction.
The documents relating to category 5 to category 9, inclusive, are records which might have had some relevance to these proceedings, but no purpose can be served by making orders for inspection at this stage. It is simply too late. This is a consequence of the applicant failing to identify at an earlier stage the nature of the documents required by him.
For all of the above reasons, this aspect of the application will also be dismissed.

Whether the proceedings should be dismissed under s 47 of the SAT Act

The applicant has adopted a deliberate policy of not attending any general meetings of the respondent. He has endeavoured to persuade others to his viewpoint by publishing his own newsletter. The difficulty with this is that he is not in a position to then ask for an explanation for any issues as they arise, and the opportunity to provide information to him in an effective and convenient way is lost.
Mr Johnson's frustration with the applicant was very evident throughout all of the various hearings before the Tribunal. Submissions filed by other owners, being Ms Thomas and Ms Jenkins, also reflect that frustration. Ms Thomas makes reference to numerous proceedings involving the applicant, not only in this Tribunal, but in relation to complaints made by him to the Real Estate and Business Agents' Board concerning the conduct of previous strata managers. She states:
All these applications and various authorities have been the same, the outcome has simply been to cost myself, as an owner, a substantially greater amount of money than I would otherwise have had to pay had Mr Clough simply attended the constituted meetings and abided by his financial commitments to the body corporate.
The Tribunal understands that the applicant is also frustrated by the different management philosophy adopted by the majority of owners, but for the reasons which follow, it is in the interests of all owners to ensure that relations between the other owners and the applicant improve.
The Tribunal has concluded that although, in a broad sense these proceedings have been unjustified, it is not intended to make an order dismissing the proceedings under s 47 of the SAT Act. The main reason for that conclusion is that, to do so is likely to add yet a further layer of inconvenience, by increasing the scope and potential for dispute for all concerned.
Section 49 of the SAT Act provides that, if a proceeding is dismissed under s 46, s 47 or s 48, another proceeding of the same kind in relation to the same matter cannot be commenced before the Tribunal without the leave of a judicial member. The issues raised in these proceedings have been finally determined. While it may be that, if relations between the parties do not improve, the applicant may wish to bring other proceedings of the same kind seeking access to records which are then current, or challenging subsequent budgets, they will not be proceedings 'in relation to the same matter', so that, on the face of it, in any event, leave of a judicial member will not be required. But if there was a dispute about the nature of the proceedings, a preliminary hearing before a judicial member would be required, with consequent delay and inconvenience. The Tribunal considers it unlikely that the applicant would attempt to reventilate the same matters determined in these proceedings. The scope for disagreement is illustrated by the respondent's contention that the claim to vary the interest rate was an abuse of process, which contention has been rejected.
It would be wrong to attempt to characterise any of the proceedings commenced by the applicant to date as vexatious. The applicant was entirely successful in matter No CC:2284/2005, and was substantially successful in achieving the result he sought in matter No CC:241/2009. The other applications, namely, matter No CC:95/2007 and matter No CC:930/2008, failed on their merits and, given that the applicant acted without legal representation, he cannot be criticised for pursuing the resolution of what he regarded, obviously, as genuine disputes.
But, in this application, the evidence has established that his practice of deliberately not attending and participating in general meetings and then seeking recourse before the Tribunal when decisions are made with which he disagrees, constitutes an abuse of the process of this Tribunal. While no practical purpose would be served by dismissing the proceedings under s 47 of the SAT Act, if the applicant commences further proceedings before the Tribunal without having first acted in a way which one would expect from a reasonable owner, by attending general meetings, and debating sensibly the business of the meeting, he can expect that the respondent will refer the Tribunal to the comments made in these reasons for decision. If the Tribunal then concludes that the applicant has continued with the practices criticised in this decision, he will run the risk that the proceeding will be dismissed as an abuse of process.
Given the high level of frustration of other owners, and in particular Mr Johnson, who has borne the brunt of having to deal with the applicant, there needs to be a conscious effort to act with courtesy and to facilitate the applicant's participation in general meetings. Otherwise, the majority of owners are likely to suffer further proceedings in this Tribunal and consequent inconvenience and expense.

Order

For the above reasons, the Tribunal will issue an order as follows:
The application is dismissed.

I certify that this and the preceding [82] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR C RAYMOND, SENIOR MEMBER