FRANCIS and THE OWNERS OF BROOME VACATION VILLAGE - [2006] WASAT 134

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: STRATA TITLES ACT 1985 (WA)

CITATION: FRANCIS and THE OWNERS OF BROOME VACATION VILLAGE [2006] WASAT 134

MEMBER: DR B DE VILLIERS (MEMBER)

HEARD: DETERMINED ON THE PAPERS

DELIVERED : 24 MAY 2006

FILE NO/S: CC 3686 of 2005

BETWEEN: STEPHEN JOHN FRANCIS
Applicant
AND
THE OWNERS OF BROOME VACATION VILLAGE
Respondent

Catchwords:

Strata titles – Use of common property – Revocation of by-law – Revocation of licence

Legislation:

State Administrative Tribunal Act 2004 (WA), s 9
Strata Titles Act 1985 (WA), s 35(1)(b), s 42(8), s 83, s 83(1), s 83(5), s 93, s 93(1), s 93(2), s 93(5), s 97

Result:

Application dismissed

Category: B

Representation:

Counsel:

Applicant: Mrs EM Wachmer
Respondent: Mr Mark Atkinson

Solicitors:

Applicant: Self-represented
Respondent: Atkinson and Associates

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

Nil

Case(s) also cited:

Nil

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

Mr Francis sought orders for a by‑law and licence affecting the use of common property to be revoked. Mr Francis contended that the terms of the by‑law and licence were not adequately explained or discussed at the 2004 Annual General Meeting, and that the terms thereof are not in the interest of all owners.
The Owners of Broome Vacation Village contended that the application should be dismissed since it fell outside the jurisdiction of the Tribunal to make the orders sought pursuant to s 93 of the Strata Titles Act 1985. The Owners of Broome Vacation Village further contended that even if the application was brought under s 83 or s 97 of the Strata Titles Act 1985, it should be dismissed since s 83 does not provide a basis for the orders sought and no breach has occurred under s 97 of the Strata Titles Act 1985.
The Tribunal found that the application should be dismissed since it falls outside the scope of s 93 Strata Titles Act1985 (WA). The Tribunal also considered the possible application of s 83 and s 97 of the Strata Titles Act 1985 and concluded that even if the application had been brought pursuant to those sections, it would have failed.
The application was dismissed and an order made.

Background

The applicant (Mr Francis) lodged the application on 26 November 2005 pursuant to s 93(1) of the of the Strata Titles Act 1985 (WA) (ST Act). The section deals with orders the Tribunal can make in regard to by‑laws enacted by a strata company. Section 93 of the ST Act authorises the Tribunal to make an order "that a by-law or an amendment or repeal of a by-law is invalid"; a repeal of the by‑law; a repeal of an amendment to a by‑law and/or the re‑instatement of a by‑law or amendment thereto.
Mr Francis sought orders to repeal or amend a by‑law (By‑Law 17) enacted in 2004 by the strata company and registered in 2005, and to revoke the licence approved by the strata company in 2004 and stamped in 2005 over the use of common property.
Mr Francis contended that the strata council has failed in its duty under s 35(1)(b) of the ST Act to consider the needs of all owners with regard to the use of large areas of common property that are the subject of the arrangement.
At the directions hearing held on 22 December 2005, the Tribunal invited Mr Francis to consider amending the application so as to ensure that it was brought under the most appropriate section of the ST Act. This suggestion followed the contention of Mr Atkinson (the Owners' counsel) at the directions hearing that s 93(5) of the ST Act precludes the authority of the Tribunal to make an order regarding the by‑law as sought.
A period of two weeks was afforded for Mr Francis to seek legal advice and amend the application if he deemed it necessary. In his letter dated 5 January 2006, Mr Francis informed the Tribunal that "we do not deem it necessary, at this stage, to amend our application".
The Tribunal hence proceeded with the application on the basis of s 93(1) of the ST Act.
The facts leading to the dispute can be briefly summarised as follows:
The strata company enacted By‑Law 17 and approved the Licence at its 2004 Annual General Meeting (2004 AGM).
The purpose of By‑Law 17 and the licence is, in short, to provide a comprehensive settlement to a long running dispute regarding the use of amenities in the strata plan scheme (scheme), access to lots, use of common property, maintenance of common property and access to service utilities. The scheme comprises 193 lots as set out in strata plan 19739.
The dispute has been between the strata company, GSG Holdings Pty Ltd (proprietor of the largest lot, Lot 92 and 83 other lots), the predecessor in title to GSG Holdings and proprietors of other lots in the scheme. As a result of the dispute, threats were made to cut off access to common property, to utilities and to lots. The dispute has fixated the attention of proprietors for the past five to six years.
Various alternatives were discussed over the course of the years in attempts to resolve the dispute. The council of Owners obtained legal advice to assist in working out the most preferable and sustainable resolution within the constraints of the ST Act.
The proposal put to the 2004 AGM attempted to address the concerns of all parties by granting exclusive use rights over common property and the granting of a reciprocal Licence for the use of the common property tennis court area.
By‑law 17 and the Licence are mutually dependent, which means if the one is terminated, the other ceases to have effect. The arrangement has a maximum duration of 10 years. No transfer of common property has occurred – merely the right to use common property and associated responsibilities for the upkeep and maintenance of it.
In the notice of the 2004 AGM, the rationale for the proposed arrangement was set out in the following way by the strata council:
"When the property was Strata Titled in 1990, the entrance driveway was put on the plan and shows as part of Lot 192. Everyone using the driveway is entering upon lot 192 to gain access to the other lots within the complex …
For some years the Council has been working towards having this situation resolve[d] for the benefit of all owners and has given consideration to various methods of achieving a result amicable to both the Strata Company and the powers [sic] of lot 192.
It would appear that the simplest way of achieving the desired result would be to have a reciprocal licence, which allows all owners access, via the driveway, to all the lots o[n] the strata plan. In compensation the Strata Company will grant the owners of lot 192 use of the common area where the tennis court is situated. This will result in the tennis court, which is in need of major repairs, being removed and the area used as a camping site.
The term of the arrangement is for a period of 10 years with the right of either party to terminate the licence with 180 days notice.
The Council seeks your support in granting this licence, which will be a positive step forward on a long outstanding issue."
By‑law 17 and the Licence were subsequently approved unanimously by the 2004 AGM. Notification of change of by‑laws was registered on 9 November 2004 (Instrument J079815) and the Licence was stamped on 8 August 2005.
Mr Francis was represented at the 2004 AGM by his mother, Ms Wachmer. According to the records of the meeting, Ms Wachmer voted in favour of the by‑law and Licence.
Ms Wachmer proposed to the 2005 AGM that the by‑law and Licence be revoked. The motion she put up for discussion was lost by a large margin.
In this application, Ms Wachmer claims, that as representative of Mr Francis, she did not fully comprehend the full implications of the proposal since it was insufficiently explained and little time was afforded for discussion and questions.

Consideration

The Tribunal will first deal with the contentions of the Owners that the application should be dismissed for lack of jurisdiction.

By‑law 17: jurisdiction under s 93(1) of the ST Act

Mr Atkinson contended as a preliminary issue in submissions on behalf of the Owners (as he did at the directions hearing), that the Tribunal does not have jurisdiction to amend or revoke By‑Law 17 pursuant to s 93 of the ST Act. Mr Atkinson contended that s 93 cannot be employed by the Tribunal to revoke By‑Law 17 and the application should therefore be dismissed.
The application was brought pursuant to s 93 of the ST Act. It must be noted that By‑Law 17 was enacted under s 42(8) of the ST Act. This is evident from the notice of meeting of the 2004 AGM, dated 24 July 2004, and "Form 21 Notification of Change of By‑laws" dated 8 November 2004 under the common seal of the Owners.
As pointed out by Mr Atkinson, s 93(5) of the ST Act provides clearly that a by‑law enacted pursuant to s 42(8) cannot be repealed pursuant to s 93(2) ST Act.
From this flows the obvious, namely that the Tribunal does not have jurisdiction under s 93(1) of the ST Act to grant the orders sought, namely to repeal or amend By‑Law 17.
The application for an order pursuant to s 93(1) of the ST Act must therefore be dismissed for want of jurisdiction.

Licence: jurisdiction under s 93(1) of the ST Act

The second leg of Mr Francis' application is to revoke the Licence pursuant to s 93 of the ST Act.
Mr Atkinson contends there are no grounds in s 93 for the Tribunal to grant the order as sought.
Section 93 of the ST Act deals specifically with the Tribunal's powers in regard to by‑laws, with the exception of by‑laws enacted under s 42(8). There is therefore, no power in s 93 for the Tribunal to set aside or revoke a decision of the owners at the 2004 AGM to grant the Licence.
The application for an order pursuant to s 93(1) of the ST Act for the Licence to be revoked must therefore also be dismissed for lack of jurisdiction.

Were other options available to Mr Francis?

In light of the objectives of the Tribunal as set out in s 9 of the State Administrative Tribunal Act 2004 (WA) to achieve a resolution of disputes with as little formality as possible, the question arises as to whether Mr Francis could have been successful, had he brought the application under another section of the ST Act.
The Tribunal, within the limits of propriety, encouraged Mr Francis to obtain legal advice and to seek leave to amend the application if necessary. Mr Francis subsequently notified the Tribunal that he would not seek leave to amend the application and insisted on continuing with the application under s 93.
Although the Tribunal is not obliged to venture into the field of possible "options" available to Mr Francis, the Tribunal is mindful that the dispute has caused substantial disharmony amongst the majority of owners and Mr Francis, and it may therefore be appropriate to comment on alternatives, if any. The high number of submissions also indicates the desire of proprietors to bring the dispute to a close.
The Tribunal will first deal with possible options to revoke By‑Law 17.
In regard to the possible revocation of By‑Law 17, Mr Atkinson included in his submission reference to s 83 and s 97 of the ST Act and contended that neither of these sections could provide a basis for the orders sought by Mr Francis.
The Tribunal agrees with Mr Atkinson's submission for the following reasons.
Section 83(5) of the ST Act provides that the Tribunal cannot make an order under s 83(1) in regard to a by‑law enacted pursuant to s 42(8). That removes s 83 of the St Act as an option available to Mr Francis since By‑Law 17 was enacted under s 42(8).
Section 97 ST Act enables the Tribunal to invalidate a resolution of a meeting, but only if it is satisfied that the provisions of the ST Act have not been complied with in relation to such meeting.
There is no evidence to suggest that the convening or conduct of the 2004 AGM was in breach of the ST Act or that the provisions of the ST Act have not been complied with in any other way in so far as the enactment of By‑Law 17 is concerned. This is evident from the following:
a)The notice for the meeting went out on 24 July 2004 and the meeting was held on 14 August 2004.
b)The proposed by‑law was included in the notice of meeting, together with a brief motivation and recommendation for its adoption.
c)The minutes of the meeting indicate that a quorum was present.
d)The minutes further indicate that all those present at the 2004 AGM, including Mr Francis' representative, voted for the resolution.
e)No votes were recorded in the minutes of the meeting against the resolution.
f)No objection was noted in the minutes of the meeting in regard to the conduct of the meeting.
g)No application was brought after the 2004 AGM to raise concerns about the legality of decisions. This application by Mr Francis was only lodged after the 2005 AGM had rejected his proposal for the arrangement to be terminated. The fact that no application was brought after the 2004 AGM adds credibility to Owners' contention that the meeting was conducted in accordance with the provisions of the ST Act.
The Tribunal therefore concludes that even if the application had been brought pursuant to s 97 of the ST Act, it is satisfied that the provisions of the ST Act had been complied with and the Tribunal could not, on the available information, find that there are sufficient grounds to invalidate the resolution.
The Tribunal concludes therefore, that neither s 83 not s 97 would have offered Mr Francis any relief to amend or to revoke By‑law 17.
The Tribunal will now deal with possible options to revoke the Licence.
In regard to the Licence, Mr Atkinson contended that s 83 of the ST Act is the only basis upon which to revoke the Licence.
This section enables the Tribunal to make orders to settle a dispute or to rectify a complaint.
In exercising its discretion under s 83 of the ST Act, the Tribunal must take into account all information of relevance to the application and balance the interests of the respective parties. The Tribunal has already noted above that it is satisfied that the 2004 AGM was duly constituted and conducted in accordance with the ST Act to make the decisions it had.
It appears from the submissions that the dispute that the Licence and By‑law 17 had been designed to address, has been a thorn in the flesh of proprietors for some time. The interest shown by proprietors in this application is illustrated by the fact that 74 submissions had been received in response thereto. With the exception of four submissions, all the others were in opposition to the application and the orders sought.
Although many of the responses were in the same format, the point made throughout the submissions is that the problem had been discussed over a period of at least five to six years, and the enactment of By‑Law 17 and the grant of the Licence were an optimal outcome for all concerned. Several lengthy submissions were received to refute contentions raised by Mr Francis. The Council also obtained legal advice to guide them through the complexities of the ST Act and possible resolutions to the dispute. From this it is apparent that there was no breach of s 35(1)(b) of the ST Act since the overall arrangement is indeed to the benefit of all proprietors. This does not necessarily mean that every proprietor must be equally satisfied with the outcome.
The manager of the Village, Mr Colin Barlow, summarises the outcome as follows:
"At the AGM 2004 common ground was presented and passed without dissent. By repealing this decision it would be a step backwards with all the good work and improvements to common ground having been removed."
The Tribunal is therefore satisfied that the strata company discharged its duties pursuant to s 35(1)(b) of the ST Act. It did not "gift" common property as is contended by Mr Francis, but merely entered into an arrangement for the use thereof on a temporary basis. The ownership of the common property has therefore remained unaffected although the use and enjoyment thereof is subject to the by‑law and Licence.
The outcome represents a compromise which in the eyes of those who attended the 2004 AGM, those who attended the 2005 AGM, and an overwhelming majority of those making submissions, should be upheld.
Although the Tribunal accepts that some proprietors may not be entirely satisfied with the granting of the Licence, the minutes of the 2004 AGM indicate that all those present voted in favour thereof. The Tribunal notes that the decision to grant a licence does not require a special majority of any sort, but it was nevertheless supported unanimously by those attending the 2004 AGM.
The 2005 AGM minutes also indicate that a proposal to overturn the arrangement was defeated.
The rights of the proprietors are further safeguarded by the fact that the Licence provides that the term of the arrangement is 10 years and that it can be terminated before the expiry of the term so long as 180 day notice is given (cl 8a of the Licence).
The strata company can therefore terminate the arrangement if it appears weighted against the interests of the owners.
From the submissions, it appears that the enactment of By‑Law 17 and the granting of the Licence received and continues to enjoy overwhelming support from proprietors. As already observed, the arrangement can be terminated and Mr Francis made such an effort at the 2005 AGM, but it failed.
Given the nature of the dispute, the ongoing efforts to resolve it, the complexity of the arrangements, the ability of parties to terminate the arrangement and the support expressed for the arrangement at the 2004 AGM, the 2005 AGM and the submissions to the Tribunal, an order to revoke the Licence pursuant to s 83 should not be made.
The Tribunal concludes that even if the application had been brought pursuant to s 83 of the ST Act, the Tribunal would not, on the available information, find that there were sufficient grounds to invalidate the resolution to grant the Licence.

Conclusion

1)The application for orders pursuant to s 93(1) of the ST Act should be dismissed for want of jurisdiction.
2)Even if the application had been amended to seek orders pursuant to s 83 or s 97 of the ST Act, it would have failed.

Orders

1.The application for an order to repeal or amend By‑Law 17 pursuant to s 93(1) of the Strata Titles Act 1985 (WA) is dismissed.
2.The application for an order to revoke the licence over common property pursuant to s 93(1) of the Strata Titles Act 1985 (WA) is dismissed.
3.The respondent must notify forthwith all Owners of these Orders and Reasons.

I certify that this and the preceding [59] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
DR B DE VILLIERS, MEMBER