ENGWIRDA and THE OWNERS OF QUEENS RIVERSIDE STRATA PLAN 55728 - [2020] WASAT 39

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL
ACT:   STRATA TITES ACT 1985 (WA)
CITATION:   ENGWIRDA and THE OWNERS OF QUEENS RIVERSIDE STRATA PLAN 55728 [2020] WASAT 39
MEMBER:   MS P LE MIERE, MEMBER
HEARD:   23 JANUARY 2020
DELIVERED          :   8 APRIL 2020
PUBLISHED           :   8 APRIL 2020
FILE NO/S:   CC 1005 of 2019
BETWEEN:   JENNIFER ENGWIRDA
Applicant
AND
THE OWNERS OF QUEENS RIVERSIDE STRATA PLAN 55728
First Respondent
CHIN-CHANG WANG
Second Respondent
FORMOSA (PERTH) PTY LTD
Third Respondent

Catchwords:

Strata Title Act 1985 (WA) - Formal requirement for signing a licence - Term of licence - Licence for alfresco dining on common property - Licence to remove boundary wall for the term of a licence - Temporary destruction of common property

Legislation:

Interpretation Act 1984 (WA), s 61(1)(a), s 61(1)(d)
Property Law Act 1969 (WA), s 9(2)
Strata Titles Act 1985 (WA), s 7, s 19, s 19(10), s 28(3), s 32(3)(d), s 35(1)(b), s44(1), s 83, s 94

Result:

Application dismissed

Category: B

Representation:

Counsel:

Applicant	:
First Respondent	:	CPK Russell
Second Respondent	:
Third Respondent	:

Solicitors:

Applicant	:	In Person
First Respondent	:	Wotton + Kearney Lawyers (Perth)
Second Respondent	:	In Person
Third Respondent	:	In Person

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

Clay & Ors and Pearce & Ors [2016] WASAT 107
Fraser Queens Pty Ltd and Tan [2018] WASAT 114
Gianatti and Owners of Victoria Apartments Strata Plan 2356 [2011] WASAT 21
Miller v Brown & Ors [2010] WADC 102
Monaco & Anor v Arnedo Pty Ltd (1994) 13 WAR 522
Radaich v Smith [1959] HCA 45; (1959) 101 CLR 209
Tipene v The Owners of Strata Plan 9485 [2015] WASC 30

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

This application concerns the use of common property being an area outside two lots in the Queens Riverside Strata Plan 55728 (Strata Plan) as an alfresco eating area. There has been a significant amount of litigation and proceedings in the Tribunal concerning the use of these two lots as a restaurant.
The applicant, Ms Jennifer Engwirda one of the registered proprietors of Lot 431 on the Strata Plan, is of the view that the use of the lots in the manner proposed, for a variety of different reasons, is not permitted or is unlawful.
The first respondent (respondent) are the Owners of the Strata Plan. The second respondent is the registered proprietor of Lot 525 on the Strata Plan (Lot 525) and Lot 526 on the Strata Plan (Lot 526 and together referred to as Lots). The third respondent is alleged by the applicant as the entity that has the City of Perth/MRA permits to redevelop the Lots and will operate the licences the subject of these proceedings.
The licences were entered into by the respondent and Mr ChinChang Wang as Trustee for the Wang Yu Family Trust (licensee).
The two licences essentially have the same terms and conditions. One is for the use of common property outside Lot 526 as an alfresco eating area (Alfresco Licence) and the other to use common property outside Lot 525 as an alfresco eating area together with common property inside Lot 525 (Wall Licence). The common property inside Lot 525 is the inner space of the adjoining wall between the Lots.
Relevant to the application the licences provide:
(a)Wall Licence (Lot 525):
i.For the use of the alfresco area for the purpose of an outdoor eating area for a restaurant or cafe operated on the Lots 525 and 526;
ii.The use of the wall area the cubic space occupied by the boundary wall between the Lots to enable unrestricted access between the Lots for the purpose of the restaurant or cafe operated on the Lots.
(b)Alfresco Licence (Lot 526);
i. Use of the alfresco area for the purpose of an outdoor eating area for a restaurant or cafe operated on the Lots.
The applicant says the Alfresco Licence and the Wall Licence (together referred to as the Licences) are not valid because they are leases not licences.
If they are leases, pursuant to s 19 of the Strata Titles Act 1985 (WA) (ST Act), approval for the respondent to enter into the agreements must be obtained by the respondent at a general meeting by a resolution without dissent. It is not contested that no general meeting was or has been so convened.
The applicant also alleges that regardless of whether they are licences or leases the respondent does not have power to grant the Wall Licence because it purports to permit the destruction of common property namely the boundary wall between the Lots.
Further, the applicant says that the Licences are for 10 years and one day and therefore regardless of whether they are licences or leases they need approval from the Western Australian Planning Commission and the local government of the district in which the Strata Plan is situated.

Background

On 12 July 2019 the applicant filed an application with the Tribunal under s 83(1) of the ST Act together with submissions in support of her application.
On the same date the applicant also filed an interim application seeking interim orders to, in summary, prevent the second respondent and/or third respondent from carrying out any works permitted by the Licences and in particular the removal of the boundary wall between the Lots.
On 25 July 2019 a directions hearing was held at which time the then second applicant Mr Jing Zhi Wong withdrew from the application and from the interim application.
The interim application was heard at that directions hearing and dismissed. Proposed orders 2 and 4 of the orders sought in the substantive application were withdrawn. Various other programming orders were also made at the directions hearing. An amended application was subsequently filed on or about 16 August 2019 (amended application).
On 12 September 2019 a further directions hearing was heard and various programming orders made.
On 22 November 2019 at a further directions hearing, the matter was listed for hearing on 23 January 2020 for the duration of one day.

Legislative framework

Section 32(3)(d) of the ST Act sets out the duties of a Strata company:
A strata company
(d)[m]ay do and suffer all things that bodies corporate generally may, by law, do and suffer and that are necessary for or incidental to the purposes for which a strata company is constituted.
Section 35 (1)(b) of the ST Act
A strata company shall
(b)[c]ontrol and manage the common property for the benefit of all the proprietors; an[d]
Section 44(1) of the ST Act sets out the functions of the Strata Council's:
(1)The functions of a strata company shall, subject to this Act and to any restriction imposed or direction given at a general meeting, be performed by the council of the strata company[.]
Section 19 of the ST Act sets out when a Strata company may transfer or lease common property:
(1)Except as otherwise provided in this section
(a)no share in the common property may be disposed of except as appurtenant to the lot of the proprietor thereof; and
(b)an assurance of a lot operates to assure the share of the disposing party in the common property, without express reference thereto.
(2)Subject to subsection (10), a strata company may, pursuant to a resolution without dissent (or unanimous resolution, in the case of a two-lot scheme) and where satisfied that all persons concerned have consented in writing to the transfer or lease, execute a transfer or lease of common property, other than common property the subject of a lease accepted or acquired by the strata company under s 18(1).
(3)Subject to subsection (10), a strata company, pursuant to a resolution without dissent (or unanimous resolution, in the case of a two-lot scheme) and where satisfied that all persons concerned have consented in writing to the transfer, may, if not prevented by the terms of the lease, transfer a lease of common property accepted or acquired by the strata company under s 18(1) or grant, by way of sub-lease, a lease of its estate or interest in common property the subject of a lease so accepted or acquired.
…
(10)Subject to subsections (11), (12) and (13)
(a)a transfer or mortgage of the common property or part of the common property; or
(b)a lease or licence, or lease and licence, to use or occupy the common property or part of the common property, for any term or terms exceeding the prescribed period in the aggregate including an option to extend or renew the term of a lease or licence granted in respect of the common property or part thereof,
is not effective unless it has been approved in writing by the Commission and the local government.
Section 83 of the ST Act sets out the general powers of SAT to make orders in relation to a dispute involving a Strata company:
(1)The State Administrative Tribunal may, pursuant to an application of a strata company, an administrator, a proprietor, a person having an estate or interest in a lot or an occupier or other resident of a lot, in respect of a scheme, make an order for the settlement of a dispute, or the rectification of a complaint, with respect to the exercise or performance of, or the failure to exercise or perform, a power, authority, duty or function conferred or imposed by this Act or the by-laws in connection with that scheme on any person entitled to make an application under this subsection or on the council or the chairman, secretary or treasurer of the strata company.
…
(4)Nothing in subsection (1) empowers the State Administrative Tribunal to make an order under that subsection for the settlement of a dispute, or the rectification of a complaint, with respect to the exercise or performance of, or the failure to exercise or perform, a power, authority, duty or function conferred or imposed on the strata company by this Act where that power, authority, duty or function may, in accordance with any provision of this Act, only be exercised or performed pursuant to a unanimous resolution, resolution without dissent or a special resolution.
(5)Nothing in this Part authorises the State Administrative Tribunal to make an order of the kind that may be made under s 28, s 29, s 29A or s 31.
(6)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 94 of the ST Act lists the orders that can be made by the Tribunal in respect of licenses:
(1)Pursuant to an application by a proprietor for an order under this section, the State Administrative Tribunal may, subject to this section, order that the applicant, and any occupier or other resident of the lot of which the applicant is the proprietor, may use specified common property in such a manner, for such purposes, and upon such terms and conditions, if any, as are specified in the order.
(2)The State Administrative Tribunal shall not make an order under subsection (1) unless satisfied
(a)that the lot of which the applicant is proprietor is incapable of reasonable use and enjoyment by the proprietor, occupier, or other resident of the lot unless the order is made; and
(b)that the strata company has refused to grant a licence to use common property in such a manner, for such purposes, and upon such terms and conditions as would enable that proprietor or such an occupier or other resident reasonably to use and enjoy that lot.
(3)An order under subsection (1), when recorded under s 115, has effect, subject to any order with respect thereto made by a superior court, as if its terms were a by-law.

Issues to be determined by Tribunal

•Have the formal requirements required for the signing/execution of the Licences been complied with?
•Are the Licences leases or licences?
•Is the term of the Licences for 10 years or 10 years and one day?
•Does the right conferred on the licensee by the Wall Licence to take down the boundary wall between the Lots for the period of the licence amount to the destruction of the boundary resulting in the loss and integrity of the separate cubic space of the Lots?
•If the answer to the above question is yes can the respondent grant the Wall Licence to the licensee?
•If the removal of the boundary wall between the Lots destroyed the Lots does the Tribunal have power to order it to be rebuilt?

The facts

At a meeting of the respondent held on 13 May 2019 the Licences were discussed and the respondent resolved that it would obtain legal advice regarding the Licences and if it determined to grant the Licences it would require:
•a bond from the owners in relation to the reinstatement of the boundary wall between the Lots held on to the expiry of the Wall Licence; and
•the costs associated with obtaining the approval by be recovered from the lot owner.
At a meeting of the respondent on 27 May 2019 it resolved that it would proceed to seek advice from GV Lawyers Pty Ltd in relation to the Licences.
On 6 June 2019 GV lawyers Pty Ltd provided their advice to the respondent regarding the Licences.
At the meeting of the respondent on 17 June 2019 it resolved to grant the Licences.
The respondent says it granted the Licences on 17 June 2019 pursuant to s 32(3)(d), s 35(1)(b), s 44(1) and s94 of the ST Act.
Work commenced on the refurbishment of the Lots as a restaurant and on or about 28 June 2019 the boundary wall between the Lots was removed.
A copy of the Licences were provided to the applicant on 18 July 2019 that did not have the respondent's common seal affixed to it.
A copy of the Licences was provide to the Tribunal on 16 September 2019 with the respondent's common seal affixed.

The evidence

Before the Tribunal were the following:
(1)Exhibit 1: Respondents Book of Documents filed on 16 August 2019;
(2)Exhibit 2: 'Alfresco Area Licence' to commence on 1 July 2019 signed and with the seal affixed;
(3)Exhibit 3: 'Alfresco Area and Wall Area licence' to commence on 1 July 2019 signed and with the seal affixed;
(4)Exhibit 4: 'Copies of Common Seal';
(5)Exhibit 5: 'Copy of Seals';
(6)Exhibit 6: Amended application filed on 16 August 2019;
(7)Exhibit 7: Applicant's Submission and Applicant's Authorities filed on 14 October 2019; and
(8)Exhibit 6: 'Notification of Change of by-laws' form

Hearing

The applicant was self-represented.
The second and third respondent filed a response to the application on 16 August 2019 denying the applicant's allegations and joined with the respondent in all the facts and submissions made by the respondent in so far as they related to them and took no further part in the proceedings.
At the hearing the applicant and respondent spoke to their written submissions but did not formally call any witnesses. The applicant however, orally provided explanatory or additional information to matters in her written submissions. Accordingly, the applicant was affirmed and the respondent was provided with the opportunity to crossexamine her.
The applicant and respondent were also given the opportunity to file closing submissions covering the issues traversed at the hearing.
The applicant and respondent filed further submissions. The Tribunal has not considered any matters raised in the applicant's closing submissions which sought to re-litigate matters dealt with in earlier proceedings or which were not traversed at the hearing.

The applicant's submissions

Execution of Alfresco Licence and Wall Licence

The applicant alleges that the Licences (Exhibit 2 and Exhibit 3) are deeds and therefore are required pursuant to s 9(2) of the Property Law Act1969 (WA) (Property Law Act) to be executed and affixed with the common seal of the respondent.
At the hearing the applicant also raised an issue not in her amended application namely that to be a legally binding document the common seal of the respondent was required to be affixed in the presence of the members of the Council of the respondent (COO) that signed the Licences at the same time as the members of the COO signed the Licences because that is what the signing clause (set out below) stipulated:
'EXECUTED BY THE PARTIES
The COMMON SEAL of
THE OWNERS OF QUEENS RIVERSIDE STRATA PLAN 55728 was affixed in the presence of:'
Further that if the common seal was not affixed at the time the Licences were signed then the COO members were not authorised to sign the Licences.
The applicant raised a further issue also not in her amended application, namely that when she viewed the respondent's records (as she was entitled to do) there was no note that the COO members who were signing the Licences were authorised to sign them. The applicant says therefore the Tribunal should infer that no such document exists.
The applicant also sought to raise the issue as to whether the meeting that was held that approved the respondent entering into the Licences was validly constituted and therefore whether motions passed were or were not validly passed.
This was not an issue raised in the applicant's amended application. The Tribunal enquired of the applicant if she wished to amend her amended application to include this matter. She declined to do so and the Tribunal declined to consider the matter further.
It is the applicant's contention that she received copies of the Licences on 18 July 2019 that did not have the common seal of the respondent 'affixed'. The applicant submitted that the Tribunal should therefore infer that at the time the Licences had been signed the common seal of the respondent had not been affixed. Further that as the Licences had not, when initially signed, had the common seal affixed and the common seal was affixed at a later time, the Licences were invalid.

Licences or leases

The applicant contends that the Licences are in fact leases because what in fact has been granted to the licensee by the Licences is exclusive possession.
The applicant refers to many authorities in respect of what is a lease as opposed to a licence. The thrust of these authorities is that if a party to an agreement is granted exclusive possession of premises then it is a lease not a licence.
In addition the applicant relies upon Radaich v Smith [1959] HCA 45; (1959) 101 CLR 209 (Radaich) as authority for the proposition that because the area the subject of the Licences are to be used as a restaurant what has been granted must be a lease.
The applicant asserts that it is what the documents (Licences) say rather than what the parties intended it to say that the Tribunal must consider.
The applicant at hearing went through each of the clauses of the Licences that she said meant the document in fact must be a lease. In particular she submitted that because there are tables and chairs in the alfresco area and that they may remain there this in itself means the licensee must have exclusive possession of that area.
A further feature of the Licenses that the applicant says means it is a lease is the permission granted in the Wall Licence to the licensee to remove the boundary wall between the Lots. The applicant says this is a right to build which is a feature associated with exclusive use.
In the applicants written submissions she asserts that the respondent does not have power to grant the Wall Licence because it permits and/or authorises the destruction of common property and further that the destruction/removal of the wall means the boundary between the walls has been destroyed and thus Lot 525 and Lot 526 are no longer lots within the meaning of the ST Act (Exhibit 6 [18]).
When asked by the Tribunal about this submission and the possible consequences in light of the decision in Tipene v The Owners of Strata Plan 9485 [2015] WASC 30 (Tipene) the applicant confirmed that her submission was that the Lots had been destroyed (ts 55-56, 23 January 2020) but declined to comment on the consequences a finding of the destruction of the Lots would have on any orders the Tribunal could make for its re-instatement.

Length of term of the Licenses

It is the applicant's submission that the length of time the Licenses are initially granted for is 5 years plus one day with a right to renew for a further 5 years thus the Licenses are for a period of 10 years and one day. Further that pursuant to s 19(10) of the ST Act they are not effective as no approval has been given by the Western Australian Planning Commission and the local government.

Respondent's submissions

Execution of Alfresco Licence and Wall Licence

The respondent was under the misapprehension in its written submissions that the applicant had abandoned her complaint that the Licences had not been properly signed and/or the formal requirements of signing/executing the Licences complied with.
At the hearing the respondent made oral submissions to the effect that as the Licences do not purport to be deeds they are not required to be signed under seal and it is therefore irrelevant as to whether the common seal was affixed when the documents were signed.
Further that if the Tribunal found the Licences to be leases then no resolution without dissent was passed so the Licences would not be validly signed anyway.
The applicant did not specifically address the applicant's submission that the Licences needed to have the common seal affixed at the same time as they were signed because the document itself says it was.
The respondent referred the Tribunal to the minutes of the COO meeting dated 13 May 2019 and to COO meeting on 17 June 2019 (Exhibit 1) as being evidence the two council members had authority to sign the Licences.

Licences or leases

The respondent agreed the main legal principal in differentiating a lease from a licence is whether exclusive use is granted by the agreement.
The respondent says the Licences do not grant exclusive use of the common property to the licensee. It accepts there is a difference between the Alfresco Licence and the Wall Licence. With regards to the Alfresco Licence it points to cl 2 of the Licences which only grants a right to use the common property and cl 5 of the Alfresco Licence specifically provides that the licensee 'must not interfere with or obstruct the movement of any person gaining access to or from the Scheme.'
Nothing in the Licences grant an interest in the land and cl 6 in the Alfresco Licence and cl 7 in the Wall Licence makes it clear the Licences are not transferable. With regard to the Wall Licence the respondent says that there is no permanent destruction of the wall between the Lots. It says it is distinguishable from the situation in Clay & Ors and Pearce & Ors [2016] WASAT 107 where the intention was to permanently remove glass walls with no intention of replacing them.
The respondent submits that there is nothing in the Licences that is inconsistent with them being licences.
In the event the Tribunal finds the Licences are ineffective for any reason the respondent says it ought to be given the opportunity to regularise them. Additionally the respondent says the Tribunal may not have jurisdiction to order reinstatement of the wall between the Lots if the Tribunal finds the Lots have been destroyed.

Length of term of the Licences

The respondent does not dispute that if the Licenses are for more than 10 years that under s 19(10) of the ST Act they are not effective as no approval has been given by the Western Australian Planning Commission and the local government.
The respondent denies that the Licences are for 10 years and one day. The respondent made the oral submission to the Tribunal at hearing that the licensee is required to give notice of its intention to renew the Licences one month before their expiry (cl 12 of the Licences Exhibit 1) thus the date of the commencement of the new licences is not certain and therefore the expiry date of the new licences not known.
In its written submissions the respondent draws the Tribunal's attention to the fact that the Licences were drawn by experienced lawyers who would not have intended the Licences to have been for 10 years and one day.

Consideration

Was the Alfresco Licence and Wall Licence properly executed?

The Tribunal had before it copies of the Alfresco Licence and Wall Licence (Exhibit 2 and Exhibit 3) which appear to have been signed under seal as they have the common seal affixed.
The Licences do not on their face purport to be deeds. There is no evidence that the Licences are deeds or were intended to be deeds. Unless they are deeds they are not required by the Property Law Act to be signed and the common seal affixed.
The applicant does not suggest that the Licences were not signed by the named COO members but rather that they did not sign the Licences at the same time as the common seal was affixed.
The gravamen of the applicant's contention is that at some time after the Licences were signed the common seal of the respondent was affixed to the Licences. The applicant says the common seal must have been affixed after she was sent a copy of the Licences without the common seal affixed on 18 July 2019 and before 16 September 2019 when a copy of the Licences with the common seal affixed was produced to her and the Tribunal.
The applicant says the consequence of the common seal of the respondent being affixed after the Licences were signed is that the Licences are not valid as required by the signing clause of the documents.
The Tribunal does not have evidence as to whether the common seal of the respondent was affixed in the presence of the members' of the COO who signed the Licences. It appears possible that the seal was affixed at a time after the Licences were signed. In the absence of evidence to the contrary the Tribunal declines to infer that the common seal was not affixed in the presence of the members' of the COO who signed the Licences. The Tribunal does not know when the common seal of the respondent was affixed.
The applicant did not refer the Tribunal to any authority that says the inclusion of a reference in an execution clause in a document to the common seal of the entity being affixed results in the document needing to have the common seal of the entity affixed to make the document valid or enforceable.
The applicant also raised the issue of whether the COO members were authorised to sign the Licences. This is not an issue that was raised in the Amended Application but was raised by the applicant in her oral submissions to the Tribunal at hearing. It is therefore not a matter the Tribunal considers properly before it. However, the Tribunal is satisfied that the minutes of the COO meetings of 27 May 2019 and 17 June 2019 disclose that the COO had considered and determined to enter into the Licences.
The further issue as to whether any of the persons present at the COO were duly elected to those positions is not a matter raised in the applicant's amended application (Exhibit 6), or the applicant's submissions filed on 14 October 2019 (Exhibit 7), and the Tribunal is not therefore in a position to consider it.

Is the Alfresco Licence and Wall Licence a lease or a licence?

In essence both parties are in agreement that what distinguishes a lease from a licence is whether the agreement or instrument grants exclusive use to a party and that if exclusive use has been granted in the Licences by the respondent to the licensee then the Licences are leases.
In the applicant's submissions she has referred to Radaich as authority that the carrying on of a restaurant or a food business necessarily means that exclusive use has been granted to the persons carrying on the business.
In Radaich their Honours specifically referred to the fact that the food business the subject of the matter, a milk bar, was a 'lock up shop'[1] and that exclusive possession had in fact been granted to the purported licensee. The Court in its reasons for coming to the conclusion referred to the nature of the activity/business carried out at the premises necessitated it being able to exclude person from its premises.
[1] Radaich at [5].
This is a very different situation. We are here talking about an alfresco area that is used for the consumption of food that is cooked, served and (to any degree necessary) stored in other premises that are owned by the licensee.
The Alfresco Licence does not on its face grant exclusive use of the area the subject of the Alfresco Licence to the licensee. Clause 5 of the Alfresco Licence specifically prohibits the respondent from interfereing with or obstructing the movement of any person gaining access to or from any part of the Scheme.
The respondent is only permitted to use the area for the designated purpose of an alfresco eating area.
The applicant submits that the movement of persons is obstructed because they can no longer walk under the shade of the building. She says the tables and chairs are also in her way when she walks in the area. It is the applicant's submission that because the tables and chairs are allowed to remain in the alfresco area this also points to exclusive use being granted to the licensee.
The Tribunal is not persuaded that the presence of the tables and chairs is indicative of exclusive use being granted to the licensee. The tables and chairs are not permitted to be affixed and are easily movable. Additionally the licensee is required by the permit issued by the City of Perth for an outdoor entertaining area to ensure that the outdoor furniture (the tables and chairs) are not left in the common area outside of trading hours. The Alfresco Licence requires the licensee to comply with the bylaws of the respondent and all relevant authorities.
Pedestrians can walk through the area where the tables and chairs are situated regardless of whether it is for the purpose of accessing the alfresco eating area. This is made plain from the wording of the Licences.
The reliance on Raddich by the applicant as authority for the proposition that an alfresco eating area means exclusive use has been granted to the licensee is misconceived. The Tribunal is not persuaded that the use of the common area by the Alfresco Licence as an alfresco eating area is inconsistent with the granting of a licence rather than a lease.
Clause 7 of the Alfresco Licence permits the licensee to sub licence not transfer the Alfresco Licence and then only at the absolute discretion of the respondent.
In practice the use of an area for alfresco dinning does not have the same characteristics as an area inside a building that is or can be locked up and from which people can be excluded at any time of the day or night at the discretion of the owner of the business.
A number of cases in the applicants' submissions including Monaco & Anor v Arnedo Pty Ltd (1994) 13 WAR 522 do not support the applicant's assertion that the carrying out of a café or restaurant business necessarily means the use of the common area for alfresco dinning means it must be a lease.
The applicant also relies upon cl 7 and cl 8 of the Alfresco Licence as indicative of the Alfresco Licence being a lease because the licensee is required to take out its own insurance. The applicant also stated that she had checked the respondent's records and it appeared it was still holding insurance over the area the subject of the Alfresco Licence.
It is the applicant's assertion that the fact the licensee is required to have its own insurance means it has 'exclusive control and dominion over these areas'. Further that the taking out of its own insurance indicates it is responsible for whatever happens in that area. (Exhibit 7 at [14]) This is not supported either factually or by authorities.
It is not clear to the Tribunal how the fact that the respondent has not sought to have that area excluded from its insurance is indicative of the Alfresco Licence being a lease as opposed to a licence (applicant's oral submissions at hearing). Indeed one may take the view that if the respondent still has the area insured it is because it still has some legal liability in respect of the area.
The Tribunal does not accept the applicant's assertions in relation to the issues of insurance.
The Tribunal does not accept the applicant's submissions that the licensee has been granted exclusive possession either intentionally or as consequence of the rights of the licensee under the Alfresco Licence. It is clear that others may enter upon the area over which the Alfresco Licence has been granted for purposes other than those of attending the licensees' restaurant, that the licensee is not granted an unrestricted right to transfer its interest in the licence to another and the licensee does not have an interest in the land over which the Alfresco Licence is issued.

Is the Wall Licence a licence or a lease?

In relation to the alfresco area that is part of the Wall Licence the same principals, comments and findings apply as with regard to the Alfresco Licence.
The wall and wall space part of the Wall Licence are somewhat different and certainly novel.
The applicant referred the Tribunal to authority[2] for the proposition that the right to build or demolish is inconsistent with the rights granted by a licence. The paragraph referenced reads as follows:
Given the arrangements allowing the respondents to build on the land, and the circumstances of the creation of the 'village' with John Miller granting exclusive possession to the occupier of each lot, I find that this was not a licence situation[:]
[2]Miller v Brown & Ors [2010] WADC 102 at [48].
The Tribunal does not accept that this case does support such a proposition. The Tribunal does however accept that it would for instance, be unusual to find the right to build a house in a licence. However the right to put up or take down shelves might not. It is necessary in each case to consider what is being permitted or approved to determine the effect it will have on the leased or licenced premises to determine if the activity is inconsistent with that the right purported to be granted.
The Tribunal is not persuaded that the right to remove the physical elements of the boundary wall is inconsistent with the Wall Licence being a licence.
The real issue is not whether it is a lease or a licence with respect to the Wall Licence but whether a licence can be issued for the purpose of consenting to the removal of common property on a temporary or permanent basis.
At no time could the common area of the wall or wall space be used by any member of the respondent in a day to day practical sense. Theoretically the wall space could be used for the installation of wires or piping with the consent of the respondent pursuant to s 7 of the ST Act.
The Tribunal does not understand it to be in dispute that the respondent does not have power pursuant to s 32(3)(d), s 35(1)(b), s 44(1) or s 94 of the ST Act to authorise by licence or otherwise the destruction and rebuilding of common property.
The applicant says that the licence does purport to authorise the destruction of common property.
The respondent denies this and says it merely permits the temporary removal of common property with a requirement that it be reinstated.
It is common ground that the Wall Licence is for a period of 10 years or 10 years and one day and that during that time it is contemplated that the common property, having been removed will not be reinstated until close to one week before the end of the term of the Wall Licence.
If the applicant's position is correct that in taking down the wall the boundary and integrity of the cubic space of each of the Lots has been destroyed then the Lots as individual lots no longer exist. A change in the boundaries of a lot or lots is, in effect, a re-subdivision within a scheme and would necessarily require a new strata plan to be registered.[3]
[3]Tipene at [104].
Section 28(3) of the ST Act grants jurisdiction to the District Court of Western Australia to vary a strata scheme and concerns the consequences of damage to or the destruction of a building that has already occurred. In this instance the damage or destruction of the wall has already occurred.
Whether lot owners can approve an alteration that temporarily affects the boundaries of a lot or lots under s 7 of the ST Act was not decided in Tipene.[4]
[4]Tipene at [105].
What is not being purported to be authorised by the Wall Licence is the destruction of the boundary wall but the granting of a licence to use the common area space in the boundary wall to allow unrestricted access between the Lots. For the purpose of using the wall space the licensee or owner of the Lots is permitted to take down the physical elements of the boundary wall.
The Tribunal is satisfied that the respondent could not authorise the destruction of common property that would cause the destruction of the boundaries of a lot or lots.[5]
[5]Tipene at [104].
If the Tribunal found that the licence sought to authorise the destruction of the boundary between the Lots then this is not something the respondent is able to do pursuant to s 32(3)(d), s 35(1)(b), s 44(1) or s 94 of the ST Act and the licences would be invalid.
The invalidity could not be cured because it is simply something the owners of a strata plan cannot do pursuant to the ST Act.
The Tribunal therefore needs to determine:
•Is what is proposed in the Wall Licence a temporary or permanent removal/ destruction of the boundary wall between the Lots; and
•If it is temporary can the respondent issue a licence for the use of common property that necessarily involves the temporary destruction of a boundary wall.
While it is may be relevant to look at the intention of parties when interpreting a written agreement it is necessary to consider what the written agreement says.
We are told by the respondent that the intent of the parties was for the destruction / removal of the wall to be temporary. The agreement does state that the removal of the wall is only for or during the term of the Wall Licence and therefore is for a finite time.
The Tribunal can have confidence that the boundary wall will be replaced at the end of the term of the Wall Licence because of the requirement that it is to be rebuilt and that a bond has been paid to ensure there are funds to do so.
In every instance a decision in a matter will depend upon the particular circumstance and the relevant facts.
The Tribunal finds that the Wall Licence permits the temporary removal of the physical elements of the boundary wall.
The Tribunal has previously determined there is no reason why as part of structural alterations within a lot a part of a boundary wall may be temporarily destroyed without destroying the lot.[6]
[6]Fraser Queens Pty Ltd and Tan [2018] WASAT 114 at [165].
The Tribunal is not persuaded that the temporary removal of the physical elements of the boundary wall has or will destroy the Lots.

What is the term of the Licences?

Section 61(1)(a) of the Interpretation Act 1984 (WA) (Interpretation Act) states that:
In computing time for the purposes of a written law
(a)where a period of time is expressed to begin at, on, or with a specified day, that day shall be included in the period;
Section 61(1)(d) of the Interpretation Act states that:
In computing time for the purposes of a written law
(d)where a period of time is expressed to end at, on, or with a specified day or to continue to or until a specified day, that day shall be included in the period.
Thus in calculating the term of the lease the 1st of July 2019 is included, as is the 1st day of July 2024 the initial term of the Licences is therefore for 5 years and one day.
Clause 11 of the Licences grants an option to renew the Licences for the further term mentioned in the First Schedule to the Licences. The further term is 5 years.
Notice of the exercise of the option is to be given by the licensee no less than one month before the expiry date (1 July 2024). Clause 11(4) refers to the commencement date of the further term. The commencement date and expiry date of the further term has been left blank in the First Schedule and therefore provides no assistance.

The Tribunal cannot know if the further term would commence on 1 July 2014 or any other date as that could subsequently be agreed by the parties. In the event there was a dispute between the parties as to when the further term commenced and a court had to determine the issue it may look to the intent of the parties as a factor in its considerations.
The parties say it was their intention that the Licences were to be for 10 years (the respondent made submissions it was for a total of 10 years and the second respondent concurred with the respondent's submissions). This is consistent with the conduct of the parties in not obtaining the appropriate consents that would have been required if the Licences were for more than 10 years.
It is still open to the parties to agree to amend the Licences to ensure there is no ambiguity as to whether the term is for 10 years or 10 years and one day.

Conclusion

Execution of Alfresco Licence and Wall Licence

The applicant provided no evidence that a licence granted by the respondent is required to be signed under seal.
The evidence before the Tribunal is that as of the date of hearing the licences were signed under seal in that the common seal of the respondent was affixed to the licences.
The applicant has not provided any authority to the Tribunal as to how it is relevant when the licences had the seal affixed.
The Tribunal is not persuaded that when the common seal was affixed it has any relevance to the validity of the Licences.
For the reasons set out above, the Tribunal is not persuaded that the Licences were not properly signed or that any required formalities were not complied with.

Are the Licences licences or leases?

The parties have agreed, as does the Tribunal, that an agreement granting exclusive possession is generally regarded as a lease.
The Tribunal is not persuaded that the various clauses in the Licences referred to by the applicant point to the Licences granting exclusive possession of the common area of the respondent to the licensee.
The Tribunal for the reason set out previously is not satisfied that the Licences grant exclusive possession of the alfresco area to the licensee.
The Tribunal is not persuaded that the Alfresco Licence is in fact a lease not a licence.
In regards that part of the Wall Licence that relates to the alfresco eating area outside of Lot 525 the findings in respect of the Alfresco Licence (the alfresco area outside Lot 526) apply to the Wall Licence.
Although the Wall licence to some extent could be regarded as granting exclusive possession of the common area of the wall space to the licensee as it is in an area which the licensee owns, possession of the wall space has not changed in a practical sense from before the Wall Licence was granted.
As set out previously the Tribunal finds the Wall Licence is for the temporary removal of the physical elements of the boundary wall between the Lots.
The Tribunal has also found that the Wall Licence involved the temporary removal of the physical elements of the boundary wall and did not destroy the Lots or result in the permanent destruction of common property.
The Tribunal is not persuaded that a licence cannot be granted for the use of the common property being the wall space for the term of the Wall Licence.
The Tribunal is not satisfied that the Wall Licence is a lease.
However had the Tribunal found, as it is urged to do by the applicant, that the Licences were leases the Tribunal would not have jurisdiction to make any consequential orders.
If the Licences are leases, the leases would, all parties agree, need to be approved/consented to by the respondent pursuant to a resolution without dissent.
On the proper construction of s 83(4) of the ST Act and having regard to the scheme of the ST Act, that subsection operates to preclude the Tribunal from exercising its general dispute resolution powers under s 83(1) of the ST Act where the disputed complaint relates to the performance of a function which could only be exercised and performed pursuant to resolution without dissent. [7]
[7]Gianatti and Owners of Victoria Apartments Strata Plan 2356 [2011] WASAT 21
The Tribunal would therefore not have jurisdiction to determine any issues arising from the respondent's performance or non-performance of that function or power. This jurisdiction is reserved to the District Court.

The term of the Licences

The applicant's position that the Licences are for 10 years and one day is based on the reading of the initial term of the Licences being for 5 years and one day. The parties to the Licences say that the term of the Licenses is for 10 years not 10 years and one day. Given the end date and possible the start date of the Further Term is not yet fixed or alternatively it is open to the parties to amend the Licences to remove any ambiguity as to the term of the Licences the Tribunal is not persuaded that the term of the Licenses is for 10 years and one day and therefore not effective.
In any event, 'not effective' is not the same as 'invalid' and therefore if the the Licences are for more than 10 years the respondent may be able to obtain approval from the Western Australian Planning Commission and the local government of the district in which the Strata Plan is situated.
The Tribunal is not persuaded that the Licences are not properly executed.
The Tribunal is not persuaded that the Licences are leases.
The Tribunal is not persuaded the term of the Licences is for more than 10 years.
The application is dismissed.

Orders

1.The application is dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS P LE MIERE, MEMBER
8 APRIL 2020