COULSON and SEOW - [2008] WASAT 26

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: STRATA TITLES ACT 1985 (WA)

CITATION: COULSON and SEOW [2008] WASAT 26

MEMBER: MR C RAYMOND (SENIOR MEMBER)

HEARD: DETERMINED ON THE DOCUMENTS

DELIVERED : 8 FEBRUARY 2008

FILE NO/S: CC 1645 of 2007

BETWEEN: NATALIE ANN COULSON
Applicant
AND
JUNE EWE-CHYE SEOW
Respondent

Catchwords:

Strata titles - Application for order to achieve merger of common property - Whether relief can be granted under s 83(1) of Strata Titles Act 1985 (WA)

Legislation:

State Administrative Tribunal Act 2004 (WA), s 7, s 9, s 32
Strata Titles Act 1966 (WA)
Strata Titles Act 1985 (WA), s 7(5), s 21Q, s 21T, s 53(1)(a), s 81(1), s 83, s 103C, Pt VI, Sch 2
Strata Titles Amendment Act 1996 (WA)

Result:

Application dismissed

Category: B

Representation:

Counsel:

Applicant: Mr IR Gillon
Respondent: Self-represented

Solicitors:

Applicant: Lawton Gillon
Respondent: Self-represented

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

Seow and Coulson [2006] WASAT 32

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

The applicant, Ms Coulson, initially applied under s 83(1), and alternatively, s 103C of the Strata Titles Act 1985 (WA), for an order that a resolution to merge land that is common property be deemed to have been duly passed by the strata company as a unanimous resolution.
Following an initial directions hearing before the Tribunal, Ms Coulson was afforded an opportunity to put a proposal to the strata company for the merger of the common property. There was no evidence that Ms Coulson ever followed that course, although the respondent, Ms Seow, obliquely referred to having voted on an application to convert the strata plan to a survey strata plan scheme. Ms Coulson subsequently based her claim for relief solely under s 83 of the Strata Titles Act 1985.
The Tribunal found that it had no power under s 83 of the Strata Titles Act 1985 to grant any order aimed at achieving a merger of common property. That was a matter referred to in s 103C of the Strata Titles Act 1985 and s 83(6) of the Strata Titles Act 1985 expressly excluded the use of the general power bestowed under s 83(1) in respect of any matter referred to in any other section of Pt VI of the Strata Titles Act 1985, which included s 103C.
Notwithstanding the above conclusion, the Tribunal considered whether there might be any benefit in adjourning the proceedings to enable the application to be advanced under s 103C. The Tribunal concluded that there was not any prospect of it being shown that Ms Seow's objection to merge is unreasonable having regard to the nature of the buildings, even if the proper procedures had been followed. The buildings were approximately 106 years old, and according to Ms Seow, would qualify for heritage listing. Whether that was true or not, the Ms Seow had a justifiable concern to maintain the present level of control which she had in relation to any proposed alterations, either to the buildings or common property. The Tribunal also concluded that it had discharged its obligation under s 9 and s 32 of the State Administrative Tribunal Act 2004 (WA) by raising the need to comply with the procedures contemplated under s 103C of the Strata Titles Act 1985 and by affording Ms Coulson, who was legally represented, with an opportunity to put forward a proposal for a merger of the common property, which the Ms Coulson failed to do. The application was accordingly dismissed.

Order sought

The applicant (Ms Coulson) seeks an order:
"Pursuant to section 83(1) and alternatively, section 103C of the Act [reference to the Strata Titles Act 1985 (WA)], an order that a resolution to merge land that is common property in strata plan 12120 into each individual lot be deemed to have been duly passed by the strata company as a unanimous resolution."

Background

Ms Coulson and the respondent (Ms Seow) are respectively the owners of Lots 1 and 2 on strata plan 12120 which was registered on 11 July 1984 pursuant to the Strata Titles Act 1966 (WA) (1966 Act). The 1966 Act was repealed and replaced by the Strata Titles Act 1985 (WA) (ST Act) and as a result of the ST Act, and subsequent amendments effected by the Strata Titles Amendment Act 1996 (WA), the boundaries of the lots shown on the strata plan are the external surfaces of those buildings and the centreplane of the common or party wall which divides the two lots.
The two lots are mirror images of each other and are bounded by common property comprising a rectangular portion of land on the western side adjacent to Campbell Street, two relatively narrow corridors on the northern and southern sides, which widen at the point where the lots each take a step in away from the boundary and a further larger rectangular portion of land at the rear on the eastern side.
Although not shown on the strata plan, a building plan prepared for Ms Coulson, but submitted by Ms Seow, shows that a common wall separating the lots continues to divide the common property on the eastern side of the parcel.
Ms Seow's statement of facts, read with the building plan, reveals that the common wall between the lots is, for most of its length, a double leaf brick wall, which becomes a single leaf brick wall dividing the bathroom and laundry, on the eastern section of each lot. Those rooms were previously an outhouse of the main building. The single leaf wall continues to divide the common property through to the eastern boundary of the parcel.
The building plan also shows that there is a carport and a storeroom within the common property adjacent to the eastern boundary of the parcel on both sides of the dividing wall.
At an initial directions hearing, the Tribunal noted that the strata plan which had been lodged was not in compliance with the Tribunal's practice note 1, which requires that a recent copy of the whole of the relevant strata plan, being not older than 10 days, be lodged in support of the application. However, both parties confirmed that the copy of the strata plan filed in support of the application could be relied upon, as nothing had occurred which would affect its accuracy.
The record of certificate of title filed by Ms Coulson shows that she has been the registered proprietor of Lot 1 since 22 July 2002. It can be inferred from Ms Seow's statement of issues, facts and contentions that she has owned Lot 2 since 1984. Ms Seow states that the building comprising the two lots was built in 1906 and she describes them as being "a unique duplex pigeon pair and one of the last remaining few duplexes in Subiaco. It has been well maintained and was renovated by the former owners and also by the Respondent. The property can be considered for heritage listing if an application is made."
Whether the above is correct or not, it reflects the importance which Ms Seow has placed on the maintenance of the appearance of the lots as a pigeon pair. It is apparent that there has been ongoing conflict between the parties for some years. In previous proceedings before the Tribunal, Ms Seow sought relief against Ms Coulson in respect of alterations effected to Ms Coulson's lot, which Ms Seow considered affected the structural soundness of the building: see Seow and Coulson [2006] WASAT 32. The reasons for decision in that matter reflect that the parties had been involved in claims and counterclaims made in correspondence over a period, then, of some four years.

The application

As indicated by the order sought above, Ms Coulson applied for an order aimed at achieving a merger of the common property into the respective lots. The documentation filed in support of the application did not reflect that any proposal had been formally put to the strata company as a resolution under s 21Q of the ST Act. At the initial directions hearing, to which reference has already been made, the Tribunal also raised with Ms Coulson that it appeared that no proposal had been put forward and that there was no information as to what was proposed in relation to the cost of complying with the statutory requirements, including the provision of a sketch plan, as required by s 21T of the ST Act. At that stage, Ms Coulson indicated that she did wish to pursue relief under s 103C of the ST Act. By agreement, the matter was referred to mediation but directions were made to provide for a proposal to be put to the strata company prior to the mediation.
The attempt at mediation was unsuccessful and the matter was accordingly listed for further directions, when the Tribunal directed the parties to file statements of issues, facts and contentions setting out their respective positions. Ms Coulson's statement of issues, facts and contentions, as filed, placed no reliance on s 103C, but asserted that the Tribunal had jurisdiction to deal with the matter under s 83 of the ST Act. Ms Seow's statement of issues, facts and contentions reflects only that she voted against a proposal to convert the present strata plan to a survey strata plan. Neither party has put forward any statement of fact indicating that a proposal was considered by the strata company for the merger of common property. This appears to explain the course followed by Ms Coulson in relying solely on s 83 of the ST Act.

The parties' contentions

The Tribunal has considered all of the issues, facts and contentions raised by the parties' respective statements. It is not necessary to repeat them. The differences between the parties centre around their different views concerning two principal issues, insurance and any future alterations which Ms Coulson might wish to carry out to her lot, incorporating the merged common property. There are other contentions raised as to whether or not a merger would increase or decrease the value of the respective lots, but in the absence of expert evidence, the Tribunal can place no weight on what is no more than the opposing assertions made by the parties. While Ms Coulson expresses the hope that the parties would meet all costs of engaging a surveyor in order to carry out the formalities of complying with statutory requirements, Ms Coulson indicates that she will, if necessary, bear such costs.
Ms Coulson has, in the past, failed to contribute towards joint insurance of the common property, and Ms Seow states that this has resulted in there currently being no joint insurance for the common property of the strata plan. Ms Coulson states that she does not see why she should be liable for the activities of Ms Seow's tenants on that part of the common area occupied on a de facto basis exclusively by them.
Ms Seow is concerned that merger of the common property would result in a further reduction of the consultation process for alterations to the buildings "that benefit both parties in terms of preserving an aesthetic symmetrical historical structure and colour". Ms Seow considers that the engagement of a surveyor as an unnecessary expenditure for both parties. The Tribunal understands this, in effect, to be a submission that the cost incurred in effecting a merger is unnecessary and does not secure any adequate benefit for the parties. Ms Seow points out that Ms Coulson, in her statement, although asserting that she has no intention to alter the external appearance of her property, offers a covenant only aimed at precluding alterations to the Campbell Street (western) façade. Ms Seow states that Ms Coulson had indicated through her builder that she intended to carry out further alterations in addition to the alterations which had been the subject of previous proceedings.
Ms Seow also contends that s 83 does not empower the Tribunal to make any order having the effect sought by Ms Coulson.
It should be noted that the Tribunal has ignored various references made in Ms Seow's statement relating to the mediation.

Consideration

Unless otherwise indicated, all references to sections are to sections of the ST Act.
Section 83(6) expressly provides:
"Nothing in this Part affects the generality of subsection (1), but an order in respect of any matter referred to in any other section of this Part shall not be made under this section."
Section 83(1) provides a general power for the Tribunal to make an order for the settlement of a dispute. By reason of s 83(6) that general power cannot be used in respect of any matter referred to in any other section of Pt VI of the ST Act which deals with resolution of disputes. Section 103C is within Pt VI, and s 103C(2) refers to a resolution deemed to have been duly passed by the strata company as a unanimous resolution for the purposes, relevantly, of s 21Q. Accordingly, it is not open for the Tribunal to make an order under s 83(1) that a resolution to merge land that is common property in strata plan 12120 into each individual lot be deemed to have been duly passed by the strata company as a unanimous resolution.
Even if an opportunity was to be provided to amend the form of order sought so as not to fall foul of s 81(1) of the ST Act, which allows the Tribunal to make an order in terms different from that sought, so long as it does not differ in substance from the order sought, that would not resolve the difficulty. The substance of the application is to achieve a merger of land in respect of a two-lot scheme, and s 103C(2)(b) specifically provides for an order to be made which deems the unanimous resolution to have been passed for the purposes of s 21Q. It is only through the mechanism prescribed by s 21Q that a merger of common property can be effected. The Tribunal accordingly lacks any power to make an order under s 83(1) of the ST Act dealing with the merger of common property.
It follows that the application, as framed, must be dismissed. However, it is necessary to consider whether it would be appropriate to adjourn, rather than dismiss, the proceeding, to enable the application to be properly mounted under s 103C of the ST Act. This is because the Tribunal is charged by s 9 of the State Administrative Tribunal Act 2004 (WA) (SAT Act) to achieve the resolution of disputes fairly and according to the substantial merits of the case. By s 32(6) and s 32(7) of the SAT Act, the Tribunal is also required to take measures that are reasonably practicable to ensure that the parties understand the nature of the assertions made in the proceeding and the legal implication of those assertions, and must ensure that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in a proceeding.
The Tribunal considers that the insurance issue is illusory. Whether or not a merger were to occur, the parties have an interest in cooperating to ensure that sufficient insurance is held by the other. Any significant damage to one lot carries a risk of damage to the common wall and to the other lot.
Ms Coulson says that she has no intention of carrying out any alterations to the external appearance of her property and "is prepared to have a covenant on the strata title to the effect that neither owner may alter the external façade (being the Campbell Street front façade) of the property without the consent of the other owner, which consent may not be unreasonably withheld". Presumably, this is intended to convey that Ms Coulson would consent to a new by-law imposing such a level of control. It is doubtful that this would provide Ms Seow with any more effective control than that presently provided under s 7 of the SAT Act, if the proposed alteration relates to a structure to be erected, or is an alteration of a structural kind, which is visible from outside the lot and is not in keeping with the rest of the development, and under the standard Sch 2 By-law 13 and By-law 14 of the ST Act, which apply. By-law 13 requires that a proprietor shall not alter the structure of a lot except as may be permitted and provided for under the ST Act and the by-laws, and in any event, shall not alter the structure of the lot without giving to the strata company, not later than 14 days before commencement of the alteration, a written notice describing the proposed alteration. By-law 14 provides that a proprietor shall not, without the written consent of the strata company, maintain within the lot anything visible from outside the lot that, viewed from outside the lot, which is not in keeping with the rest of the building.
Further, at present, no alterations can presently be effected to any of the common property without the consent of Ms Seow.
The Tribunal cannot make any finding that Ms Coulson does intend to carry out any further alterations, in the face of her statement that she does not intend to do so. However, it is clear that Ms Seow has a genuine concern that the uniform appearance of the development be maintained and that Ms Coulson intends to carry out further alterations. Ms Coulson has shown a propensity to proceed with unauthorised alterations. Ms Seow pointed to the previous proceedings between the parties and provided a copy of the decision in Seow and Coulson. In that matter, the presiding member, Dr de Villiers, stated at [20]:
"The Tribunal finds that Ms Coulson acted in breach of s 7(2) of the Act when she commenced with the works without the necessary approval of Ms Seow or the local authority. The Tribunal does not accept Ms Coulson's explanation that she was unaware that approval was required since the work only affected her lot and was minor in nature."
Section 103C(3) empowers the Tribunal to make an order deeming the relevant resolution to have been passed if satisfied that the other proprietor has acted unreasonably in refusing to agree to the resolution.
In the context of a very old pair of buildings, described by Ms Seow as a pigeon pair, it is easy to understand that an owner may place a very high value on the ability to better control any alteration to the buildings, or even any other part of the common property, than might be the case in other developments. In essence, the differences between the parties can be stripped down to Ms Coulson wishing to have more control over what is now common property, and Ms Seow wishing to retain the same degree of control as has always vested in the owners since registration of the strata plan. Regardless of what Ms Coulson's intentions may or may not be, once the common property is merged, the owner of each lot would be able more easily to alter a building so as to encroach on what was previously common property. The other owner's rights to object would be limited to those stated in s 7(5) of the ST Act.
It is a significant consideration that Ms Coulson must be taken to have been aware of the restrictions placed upon any attempt to alter the lot or common property at the time when she acquired Lot 1. The Tribunal is not satisfied that there is any prospect of Ms Coulson being able to demonstrate that Ms Seow's opposition to a proposal for merger of the common property would be unreasonable, if the proper procedure contemplated under s 103C of the ST Act were to be followed.
Consequently, no purpose would be served by adjourning the proceeding to allow Ms Coulson to put forward a proper proposal for merger of common property to the strata company. In any event, the Tribunal considers that it has discharged its obligation under s 9 and s 32 of the SAT Act by raising with Ms Coulson, who had the benefit of legal representation, the need for a proposal for merger to be made. Ms Coulson was then advancing an alternative case under s 103C of the ST Act, and the Tribunal had taken measures to ensure that the parties, and in particular Ms Coulson, understood the nature of the assertions made and the legal implications of those assertions, which meant that the requirements of s 103C and s 21T had to be met. With that knowledge, Ms Coulson elected to base her case solely on s 83 of the ST Act.

General

Under s 53C(1)(a) of the ST Act, the strata company is obliged to insure buildings that form part of the common property. The parties need to address this and, if necessary, the aid of the Tribunal should be sought if a party declines to vote in favour of any resolution necessary to enable the strata company to discharge its insurance obligations.

Order

For the above reasons, the Tribunal orders as follows:
1.The application is dismissed.
I certify that this and the preceding [35] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR C RAYMOND, SENIOR MEMBER