Fisher and the Owners Of Esplanade Court - Strata Plan 363 - [2008] WASAT 301

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: STRATA TITLES ACT 1985 (WA)

CITATION: FISHER and THE OWNERS OF ESPLANADE COURT - STRATA PLAN 363 [2008] WASAT 301

MEMBER: DR B DE VILLIERS (MEMBER)

HEARD: 18 NOVEMBER 2008

DELIVERED : 18 DECEMBER 2008

FILE NO/S: CC 1376 of 2008

BETWEEN: MURRAY CLEMENT FISHER
Applicant
AND
THE OWNERS OF ESPLANADE COURT - STRATA PLAN 363
First Respondent
HARRY WALTER GAYFER & ORS
Second Respondents

Catchwords:

Property - Strata titles - Use of common property - Special resolution by-law - Placing of pot plants - Exclusive use of common property by placing pot plants - What type of by-law or authorisation is required to authorise the placing of pot plants on common property - What is the effect if time for lodgement of a by-law with the Registrar of Titles has lapsed due to Tribunal proceedings

Legislation:

Strata Titles Act 1986 (WA), s 3B, s 3B(5), s 17(1), s 19, s 35, s 42(2a), s 42(4)(a), s 42(8), s 81(2), s 82, s 93, s 94, Sch 1, Sch 1 bylaw 2, Sch 2, Sch 2 bylaw 1, Sch 2 bylaw 3(b)

Result:

The application succeeds

Summary of Tribunal's decision:

The application concerned the question whether the decision of the strata company to authorise the placing of pot plants or ornaments on certain parts of common property was made within powers. The strata company enacted a Sch 2 bylaw by way of a special resolution. In the bylaw, approval is given to certain lot owners or occupiers to place a pot plant or an ornament outside their front door on common property. The applicant contended that the bylaw was made without power since it purported to grant exclusive use or special privileges to the beneficiaries and therefore required a resolution without dissent bylaw in accordance with s 42(8) of the Strata Titles Act 1985 (WA). The applicant also contended that the bylaw should not have been made had the interests of all the proprietors been given proper regard since the placing of the pot plants may increase the public liability of the strata company. The first respondent did not take an active part in the proceedings. The second respondents were a group of owners who opposed the application. According to them, the bylaw did not grant exclusive use rights or special privileges; the strata council retained supervision over the placing of the plants or ornaments; and the insurance broker had approved the bylaw. The second respondents also noted that the strata company had in the past and continues to do so, afforded proprietors certain uses of common property for example for storage, without a s 42(8) bylaw authorising such use. The Tribunal upheld the application on grounds that it was satisfied that the by-law did purport to provide exclusive use and special privileges to the owners of the three bedroom units and therefore had to be made in compliance with s 42(8) of the Strata Titles Act 1985 (WA) which requires a resolution without dissent. Although the Tribunal understands the desire by the respondents that matters such as the placing of a pot plant or affixing of an ornament should be dealt with by 'common sense' and with as little technical burdens as possible, s 42(8) of the Strata Titles Act 1985 (WA) specifically mandates that if rights such as those set out in the by-law are granted, then a Sch 1 by-law must be enacted. Another matter that arose was whether the proceedings should be determined in favour of the applicant since the time within which a new by-law must be lodged with the Registrar of Titles, had lapsed. Section 42(4) of the Strata Titles Act 1985 (WA) determines that a new by-law must be lodged within three months from the date upon which it was approved by the strata company. Mr Kronberger, acting for the applicant, contended at the hearing that the time for lodgement had lapsed and that the orders as sought by the applicant should be made. Mr Kyle who acted for the second respondents expressed surprise since Mr Kronberger had accepted an undertaking given by the first respondent not to lodge the by-law pending the outcome of these proceedings. The first respondent acted in good faith when they agreed not to lodge the bylaw. The Tribunal shared the surprise expressed by Mr Kyle that Mr Kronberger would later rely on the failure to submit the by-law after he had agreed to the process. The Tribunal therefore proceeded with the hearing. In light of the finding of the Tribunal that the bylaw is not valid, no further findings or orders need to be made in regard to this issue.

Category: B

Representation:

Counsel:

Applicant:     Mr R Kronberger
First Respondent           :     Mr A Metaxas
Second Respondents     :     Mr P Kyle

Solicitors:

Applicant:     Atkinson Legal
First Respondent           :     Metaxas & Hager
Second Respondents     :     Kyle & Company

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

Hooper and The Owners of the Pines at Ellenbrook Strata Plan 37402 [2007] WASAT 145

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

The application concerned the question whether the decision of the strata company to authorise the placing of pot plants or ornaments on certain parts of common property was made within powers. The strata company enacted a Sch 2 bylaw by way of a special resolution. In the bylaw, approval is given to certain lot owners or occupiers to place a pot plant or an ornament outside their front door on common property.
The applicant contended that the bylaw was made without power since it purported to grant exclusive use or special privileges to the beneficiaries and therefore required a resolution without dissent bylaw in accordance with s 42(8) of the Strata Titles Act 1985 (WA). The applicant also contended that the bylaw should not have been made had the interests of all the proprietors been given proper regard since the placing of the pot plants may increase the public liability of the strata company.
The first respondent did not take an active part in the proceedings.
The second respondents were a group of owners who opposed the application. According to them, the bylaw did not grant exclusive use rights or special privileges; the strata council retained supervision over the placing of the plants or ornaments; and the insurance broker had approved the bylaw. The second respondents also noted that the strata company had in the past and continues to do so, afforded proprietors certain uses of common property for example for storage, without a s 42(8) bylaw authorising such use.
The Tribunal upheld the application on grounds that it was satisfied that the by-law did purport to provide exclusive use and special privileges to the owners of the three bedroom units and therefore had to be made in compliance with s 42(8) of the Strata Titles Act 1985 (WA) which requires a resolution without dissent. Although the Tribunal understands the desire by the respondents that matters such as the placing of a pot plant or affixing of an ornament should be dealt with by 'common sense' and with as little technical burdens as possible, s 42(8) of the Strata Titles Act 1985 (WA) specifically mandates that if rights such as those set out in the by-law are granted, then a Sch 1 by-law must be enacted.
Another matter that arose was whether the proceedings should be determined in favour of the applicant since the time within which a new by-law must be lodged with the Registrar of Titles, had lapsed. Section 42(4) of the Strata Titles Act 1985 (WA) determines that a new by-law must be lodged within three months from the date upon which it was approved by the strata company. Mr Kronberger, acting for the applicant, contended at the hearing that the time for lodgement had lapsed and that the orders as sought by the applicant should be made. Mr Kyle who acted for the second respondents expressed surprise since Mr Kronberger had accepted an undertaking given by the first respondent not to lodge the by-law pending the outcome of these proceedings. The first respondent acted in good faith when they agreed not to lodge the bylaw. The Tribunal shared the surprise expressed by Mr Kyle that Mr Kronberger would later rely on the failure to submit the by-law after he had agreed to the process. The Tribunal therefore proceeded with the hearing. In light of the finding of the Tribunal that the bylaw is not valid, no further findings or orders need to be made in regard to this issue.

Issue

The issue in dispute is whether the Sch 2 bylaw (bylaw) approved by the strata company at an extraordinary general meeting held on 3 August 2008, was valid. The bylaw authorises that the proprietors or tenants of the three bedroom units may place pot plants and ornaments on parts of common property outside their front doors.
The bylaw provides as follows:
The proprietors and occupiers of each 3 bedroom end unit shall be entitled to keep one pot plant or similar ornament on the common property next to the doorway of their unit provided that such a pot plant or ornament does not cause an obstruction to the free passage of persons to and from the unit and provided further that the proprietors and occupiers of the unit shall be responsible for the maintenance of the pot plant or ornament and for any damage to the common property caused thereby. No other pot plant shall be permitted in common areas other than the foyer of the building.
The by-law was adopted by way of special resolution pursuant to s 3B of the Strata Titles Act 1985 (WA) (ST Act).
Forty five of the 63 lots voted in favour of the bylaw and five of the 63 lots voted against it. Seventy one per cent of aggregate unit entitlement voted in favour of the bylaw. The chairperson informed the meeting that any proprietor who had not voted in person or through proxy was entitled to have its vote recorded within 28 days after the meeting pursuant to s 3B(5) of the ST Act. No further votes were recorded against the resolution at the expiry of the period.
The Tribunal is called upon by the applicant to make a finding that the bylaw was invalid since it seeks to grant exclusive rights and special privileges to certain proprietors and that a resolution without dissent should have been enacted in accordance with s 42(8) of the ST Act.
The second respondents contend that the bylaw is valid; that it does not confer exclusive use or special privileges; that it falls within the matters that could be dealt with under Sch 2 of the ST Act; and that the application should therefore be dismissed.

Background to the application

The application was lodged on 27 August 2008. At the first directions hearing held on 4 September 2008, programming orders were made for the matter to be heard. The matter was not referred for mediation since an earlier, related matter, had not settled in mediation. That matter has been adjourned pending the outcome of these proceedings. There was no reasonable prospect that this matter would settle. The parties were therefore in agreement that the dispute should proceed to a hearing.
At the directions hearing held on 6 October 2008 various arrangements were made in regard to the conduct of the proceedings:
•Firstly, several proprietors (37 in total) indicated their desire to be joined in the proceedings as respondents. It was agreed that all those persons be referred to collectively as 'second respondents' but that for practical purposes the group would be listed under Mr Gayfer's name since the interests of the other proprietors were consistent with his position. The entire group of second respondents is represented by Mr Kyle.
•Secondly, in response to an urgent application sought by Mr Fisher to prevent the strata company from lodging the bylaw the subject of the dispute with the Registrar of Titles (Registrar), the strata company gave an undertaking that it would not, until the conclusion of these proceedings, lodge the by-law for registration. An order was therefore made for the strata company not to lodge the bylaw until the conclusion of the proceedings.
•Thirdly, the strata company indicated that it would not take an active role in the proceedings and that it would abide by the decision of the Tribunal. The strata company therefore did not make any further submissions in the proceedings.
The matter was heard on 18 November 2008 and the decision was reserved at the conclusion of the hearing.
Prior to the conclusion of the hearing, orders were made for the parties to file and serve the measurements of the glass enclosures of the walkways. The reason for the orders was that the parties were in dispute as to the exact height of the balcony wall as well as the extent to which the passageway is enclosed by glass. Mr Fisher filed an affidavit on 20 November 2008 in which the exact measurements were provided. The content of the affidavit was not disputed by the respondents.

Description of the scheme

The strata scheme comprises a sixteen level building with 63 units. It is situated in South Perth. The scheme was registered on 21 July 1970. All areas outside the lots, including the passage ways, are common property. At the end of the passage way of each level is a three bedroom lot. The proprietors or residents of these lots may pursuant to the bylaw place a pot plant or ornament outside their door on common property.

Legal framework

The application was brought pursuant to s 93 of the ST Act.
The section provides as follows:
(1)Any person entitled to vote at a meeting of a strata company (including both a first mortgagee and a proprietor who is a mortgagor of a lot) may apply to the State Administrative Tribunal for an order under this section.
(2)An order under this section is an order for one or more of the following -
(a)a declaration that a by-law or an amendment or repeal of a by-law is invalid;
(b)the repeal of a by-law;
(c)the repeal of an amendment to a by-law;
(d)the re-instatement of -
(i)a by-law that was repealed or deemed by subsection (4) to be repealed; or
(ii)any provision of a by-law that was amended or deemed by subsection (4) to be amended.
(3)On the making of an application under subsection (1) the State Administrative Tribunal may make an order under this section if satisfied that the by-law or the repeal or amendment of a by-law -
(a)was made without power;
(b)was not made in accordance with this Act or the regulations or any other requirement that ought to have been observed; or
(c)should not have been made having regard to the interests of all proprietors in the use and enjoyment of their lots or the common property.
(4)An order under this section, when recorded under section 115, has effect according to its tenor and subject to any order with respect thereto made by a superior court; and in particular an order has effect -
(a)where subsection (2)(a) applies, as if its terms were an exercise of the power to repeal or amend the by-laws; and
(b)in any other case, as if it were the exercise by the strata company of its powers in respect of by-laws.
(5)This section does not apply with respect to a by-law made or deemed to be made under section 42(8).

Section 42(8) of the ST Act provides as follows:

Without limiting the generality of any other provision of this section other than subsection (1), a strata company may, with the consent in writing of the proprietor of a lot, pursuant to a resolution without dissent (or unanimous resolution, in the case of a twolot scheme) make, under this subsection only and not otherwise, a bylaw in respect of that lot conferring on that proprietor the exclusive use and enjoyment of, or special privileges in respect of, the common property or any part of it upon such terms and conditions (including the proper maintaining and keeping in a state of good and serviceable repair of the common property or that part of the common property, as the case may be, and the payment of money by that proprietor to the strata company) as may be specified in the bylaw and may, pursuant to a resolution without dissent (or unanimous resolution, in the case of a twolot scheme), make a bylaw amending or repealing any bylaw made under this subsection.

Submissions by Mr Fisher

Mr R Kronberger, acting for Mr Fisher, contends that the bylaw is invalid on grounds that it seeks to provide exclusive use of common property and create special privileges to some proprietors and that it should therefore comply with the requirements of s 42(8) of the ST Act. Section 42(8) of the ST Act requires a resolution without dissent for a bylaw in regard to the exclusive use of common property to be lawfully enacted. The bylaw should have been classified as a Sch 1 bylaw.
The main elements of Mr Kronberger's contentions are as follows:
•The strata company can only amend its Sch 1 bylaws by means of a resolution without dissent and not by means of special resolution bylaw:
•The by-law should have been classified as a Sch 1 bylaw and not as a Sch 2 bylaw since it provides exclusive use rights and creates special privileges in regard to common property to the proprietors and tenants of the three bedroom units;
•Common property is held by all proprietors as tenants in common and special rights and privileges as proposed in the by-law can only be given if the requirements of the ST Act are complied with;
•Only two options are available for the use of common property in the manner proposed by the by-law, namely an exclusive use by-law pursuant to s 42(8) of the ST Act or a lease.
•Section 42(8) of the ST Act requires that exclusive use or special privileges in regard to common property may only be granted by means of a resolution without dissent. In this matter there were five dissenting votes and therefore the by-law does not meet the requirements of a resolution without dissent;
•No lease has been entered into in regard to the pot plants and ornaments;
•The by-law is vague in terms of who it applies to, it does not give adequate specification of what parts of common property may be affected, and it is inadequate as to what is meant by the use of the works 'pot plant or any similar ornament'; and
•The pot plants or ornaments may constitute a hazard or obstruction to persons walking in the passage way. The strata company may therefore face additional public liability exposure by allowing such items to be placed on common property.

Submissions by the second respondents

Mr P Kyle, acting for the second respondents, contends that the bylaw was valid and properly characterised as a Sch 2 bylaw for which a special resolution is required.
The main elements of Mr Kyle's contentions are as follows:
•The strata company does not purport to confer any exclusive rights or special privileges to the owners of the three bedroom units. It is therefore appropriate for the bylaw to be approved by special majority rather than a s 42(8) ST Act exclusive use by-law.
•The permission to place a pot plant or ornament on common property is limited to the three bedroom units at the end of the passageways. The privilege remains subject to oversight and supervision of the strata company. The by-law could be revoked or amended by a special resolution.
•The approval to place a pot plant or ornament should be assessed in the same light than other Sch 2 of the ST Act uses of common property, for example making of a garden for private use and parking of a vehicle.
•The strata company acted properly by classifying the topic as a Sch 2 bylaw which requires a special resolution. Section 42(8) of the ST Act provides for a more permanent and exclusive use of common property and does not intend to regulate such matters as the placing of a pot plant. A 'common sense' approach that reflects the realities of living in a strata scheme is therefore required.
•The insurance company has provided a report in which it describes the possible risk that the pot plants and/or ornaments may hold as 'not an obstruction or hazard' since the area in which it may be placed is not a walkway.
•There are several other examples where the strata company in this scheme has already allowed proprietors to use common property for storage for private purposes without the support of a s 42(8) ST Act by-law.

Consideration

The Tribunal will commence by summarising the matters on which the parties are in agreement before it deals with the issues in dispute.
The parties are in agreement in regard to the following:
•The common property is held by the proprietors as tenants in common in shares proportional to the unit entitlements of their respective lots. This is consistent with s 17(1) of the ST Act.
•The areas where the pot plants and ornaments may be placed are part of common property.
•The strata company has in the past (and continues to do so) allowed proprietors to use parts of common property for storage of material of proprietors and other purposes without a s 42(8) ST Act by-law to authorise such use. Such approval is generally regarded as a 'licence to use' under the ST Act and can be revoked at any time by the strata company.
•The strata company has adopted 'House Rules' in which certain practical arrangements are made, for example that proprietors may install cupboards for storage on the common property in the drying rooms and that such cupboards may be locked (House Rule 10(b)). Basement storage on common property is also available to residents at payment of a fee (House Rule 12). The House Rules are a type of 'licence to use' that can be revoked or amended by the strata company by an ordinary majority.
•The ST Act allows in Sch 2 that the strata company may give approval for common property to be used for purposes of parking (By-law 1) or for making a garden for private purposes (By-law 3(b)).
•The glass windows that enclose the common property walkway extend for 2.63 metres from the front door of the three bedroom units. There remains an un-enclosed portion of walkway measuring 2.3 metres. The height of the walkway wall is 1.1 metres.
•A s 42(8) ST Act bylaw is required when exclusive rights and special privileges are granted to any proprietor or resident for the use of common property.
•The by-law does not comply with the requirements of s 42(8) of the ST Act since a resolution without dissent was not obtained.
•No lease has been entered into between the strata company and the proprietors of the three bedroom units for placing a pot plant or ornament on common property.
The issues on which the parties are in dispute are whether the subject matter should have been regulated by s 42(8) of the ST Act and thus classified as a Sch 1 bylaw; whether the by-law was made in accordance with the ST Act; and whether the bylaw should not have been made having regard to the interest of all proprietors.
The Tribunal will now deal with each of these issues separately.

Does the by-law confer exclusive rights or special privileges in regard to the use of common property?

The ST Act does not define in detail an exact list of matters that should be regulated by respectively a Sch 1 or a Sch 2 bylaw. The ST Act only requires that any addition to or amendment of a by-law must be classified as either a Sch 1 or a Sch 2 bylaw (s 42(2a) of the ST Act) on the basis of the type of rights that are recognised by a resolution.
In general the Sch 1 by-laws deal with the governance of the strata company while the Sch 2 by-laws deal with the behaviour of residents. Refer in this regard to the discussion in Hooper and The Owners of the Pines at Ellenbrook Strata Plan 37402 [2007] WASAT 145 at [34] [35]. This distinction is in itself not watertight since both Sch 1 and Sch 2 bylaws deal with the use of common property.
If a bylaw purports to confer exclusive use or any special privileges in respect to common property an exclusive use by-law in accordance to s 42(8) of the ST Act must authorise such use. Such a by-law must be recorded as an amendment to the scheme's Sch 1 bylaws. A strata company therefore cannot seek to recognise exclusive use or any special privileges for some proprietors in regard to common property in any other way than by means of s 42(8) of the ST Act.
If, however, a strata company does not grant exclusive use or special privileges in regard to the use of the common property, then an ordinary majority could grant the proprietor or tenants permission to use common property in what amounts to a 'licence' to use. Such a licence would be subject to conditions imposed by the strata company and could be revoked by an ordinary majority. The ST Act further empowers the Tribunal to make orders in regard to a licence for the use of common property and for such an order to be recorded as if its terms were a bylaw (s 94 of the ST Act).
In summary, the position under the ST Act is that if exclusive use or any special privileges on common property are conferred on any proprietor, s 42(8) of the ST Act is the only pathway to follow. No other by-law such as a special resolution bylaw can be used to grant exclusive use or any special privileges in regard to common property. If a licence to use common property is granted but without exclusive use or any special privileges, then no by-law is required. Such approval can, however, be revoked or new conditions can be imposed by the strata company through an ordinary majority.
A close inspection of the standard Sch 1 and Sch 2 bylaws as contained in the ST Act and applicable to this scheme, show that both Sch 1 and Sch 2 allow the strata company to regulate aspects of the use of common property. The use of common property is therefore a continuum of possibilities that may fall within Sch 1 or Sch 2 of the ST Act. For example:
•Schedule 1 by-law 2 places an obligation on a proprietor and resident to use common property in a manner that does not unreasonably interfere with the use thereof by others and to take reasonable steps to ensure visitors comply with by-laws relating to the parking of vehicles.
•Schedule 2 by-law 1 provides that the strata company may regulate the parking of vehicles on common property. Schedule 2 by-law 3(b) provides that the strata company may grant approval to a proprietor or resident to use any portion of common property 'for his own purposes as a garden'.
Schedule 2 clearly provides the strata company with the authority to allow certain activities on common property. Such activities include the parking of vehicles on common property and the growing of a garden for own use on common property. The conditions upon which such use is permitted remain within the authority of the strata company.
It seems to the Tribunal that the essential difference between Sch 1 and Sch 2 bylaw when it comes to the use of common property is as follows: if a general power is given to the strata company to regulate the use of common property, a Sch 2 bylaw can be enacted by means of a special resolution. If, however, exclusive use or any special privileges of proprietors in regard to the use of common property are recognised in a by-law, it must comply with s 42(8) of the ST Act and thus classified as a Sch 1 by-law.
There are essentially four main ways in which to deal with the use of common property by proprietors - resolution without dissent pursuant to s 42(8) of the ST Act; special resolution pursuant to s 3B of the ST Act, a lease pursuant to s 19 of the ST Act and a licence pursuant to the inherent powers of a strata company to manage and control common property (s 35 of the ST Act).
The contention by Mr Kronberger that common property can only be dealt with by way of a s 42(8) ST Act bylaw or by a lease is not consistent with the ST Act. The Tribunal is of the view that the ST Act does not mandate that any use of common property should automatically be the subject of a Sch 1 bylaw. It depends on the nature and scope of rights and privileges afforded to a proprietor.
Although the Tribunal appreciates the plea of Mr Kyle that a 'common sense' approach should be used to deal with something as relatively trivial as the placing of pot plants, the question is, what are the rights and privileges that are bestowed on the beneficiaries? The principle of dealing with exclusive use and special privileges of common property must guide the Tribunal regardless of the subject matter.
In these proceedings, the strata company has so far adopted a pragmatic approach by dealing with the use of common property. It is undisputed that parts of the common property are set aside for storage by proprietors and residents. In fact, Mr Fisher confirmed in evidence that he has a lockable cabinet on common property in which he stores personal items. He explained that in accordance with the House Rules every resident has a drying cupboard on common property in which it may store personal items. He also confirmed that cabinets have been installed in parking bays for purposes of storage. The cabinets strictly speaking fall outside the permissible use of a parking bay.
The above examples of uses of common property in accordance with the House Rules are not the subject of a s 42(8) ST Act bylaw because exclusive rights or special privileges are not granted to specific proprietors. The strata company is entitled to regulate such matters by way of a licence.
The by-law the subject of this application falls in a different category.
The by-law seeks, as far as the Tribunal is concerned, to confer exclusive use or special privileges to a certain category of owners. It is only the owners of the three bedroom units that would benefit from the by-law. No other owners would be authorised to place pot plants or ornaments outside their doors. This must constitute a 'special privilege' within the meaning of s 42(8) of the ST Act. The bylaw further purports to give an exclusive right to those owners by guaranteeing they are 'entitled' to use a part of common property for the placing of a pot plant or an ornament. This is, in effect, a right to exclusive use a part of the common property subject to the pot plant not causing an obstruction and the owner being responsible for any damage that may be caused to common property. It could also redirect the access of other owners to the part of common property where the pot plant or ornament is located.
The rights conferred by the by-law are exclusive use rights and special privileges within the meaning of s 42(8) of the ST Act.
The Tribunal finds that the rights and privileges conferred by the by-law are such that it should have been enacted pursuant to s 42(8) of the ST Act and classified as a Sch 1 bylaw.
The answer to the first question is therefore that the by-law purports to confer exclusive use and special privileges in regard to the use of common property on a specific category of owners and that can only be done by means of s 42(8) of the ST Act.
If the strata company had enacted a Sch 2 by-law with general powers to authorise the strata council to grant approval for placing pot plants in words similar to that of Sch 2 bylaw 3(b), it might have been consistent with the ST Act but that is not a matter to be determined in these proceedings.
The Tribunal finds therefore that the by-law as made is without power.

Was the by-law made in accordance with the ST Act?

It is uncontested that the by-law did not comply with the requirements of a resolution without dissent.
In these proceedings, the following facts are uncontested in regard to the extraordinary general meeting which took place on 3 August 2008:
•A quorum was present.
•Forty five of 63 votes were cast in favour of the special resolution. That constitutes 71% of the lots.
•The unit entitlements of those in favour of the special resolution were 117,240 of 164,640 which represent 71% of aggregate unit entitlement.
•Five of 63 votes were cast against the resolution. That constitutes 7.9% of the lots.
•The unit entitlements of those against the special resolution were 14,025 out of 164,640 which represent 8.24%.
The requirements of resolution without dissent were not met.
The Tribunal finds that the bylaw was not made in accordance with s 42(8) of the ST Act.

Should the by-law have been made having regard to the interests of all proprietors in the use and enjoyment of their lots or the common property?

This question falls away since the Tribunal has already found that the by-law was made without power and not in accordance with the ST Act.

Limitation of time for registration of the by-law

Section 42(4)(a) of the ST Act provides that no additional by-law has effect until the strata company has, not later than three months after the passing of the resolution, lodged a notice with the Registrar of Titles.
The Tribunal noted above, that Mr Kronberger sought an interim order pursuant to s 82 of the ST Act to prevent the strata company from lodging the bylaw prior to the conclusion of these proceedings.
The strata council agreed at the hearing of the interim application not to lodge the bylaw with the Registrar. Mr Kronberger subsequently sought leave to withdraw the interim application on the basis of the undertaking given by the strata council. The Tribunal granted such leave. The strata company was therefore ordered not to submit the by-law to the Registrar until these proceedings were concluded.
At the hearing on 18 November 2008, Mr Kronberger unexpectedly sought an order for the proceedings to be determined without a further hearing in favour of the applicant on grounds that the time for lodging the bylaw with the Registrar has expired.
This proposition came as a surprise to Mr Kyle and to the Tribunal since Mr Kronberger had been so active in seeking agreement from the strata company not to lodge the bylaw. He consented to the orders of the Tribunal and at no stage did he raise any concern that the time may lapse for the bylaw to be lodged should its validity be upheld.
The Tribunal rejected the submission of Mr Kronberger and continued to deal with the application on its merits.
In light of the finding of the Tribunal that the by-law was made without power and not in accordance with the ST Act, there is no need to make any further findings on the time limit for registration.

Conclusion

The Tribunal concludes that the application should succeed on grounds that it is satisfied that the making of the bylaw was not within the power of the strata company and the bylaw was not made in accordance with the ST Act.

Orders

The Tribunal therefore makes the following orders:
1.The application succeeds.
2.The by-law enacted by the strata company at the annual general meeting held on 3 August 2008 is invalid.
3.The by-law must not be submitted to the Registrar of Titles for registration.

I certify that this and the preceding [61] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
DR B DE VILLIERS, MEMBER