Gavranich and Anor and the Owners of Cesanatico Apartments - Strata Plan 2812 and Anor - [2005] WASAT 12

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT :STRATA TITLES ACT 1985 (WA)

CITATION: GAVRANICH & ANOR and THE OWNERS OF CESANATICO APARTMENTS - STRATA PLAN 2812 & ANOR [2005] WASAT 12

MEMBER: MR C RAYMOND (SENIOR MEMBER)

HEARD: ON THE PAPERS

DELIVERED : 22 FEBRUARY 2005

FILE NO/S: ST 131 of 2004

BETWEEN: PETER GAVRANICH
Applicant 1
JILLIAN MARGARET NEALE
Applicant 2
AND
THE OWNERS OF CESANATICO APARTMENTS - STRATA PLAN 2812
First Respondent
AND
DEBORAH FROMM
Second Respondent

Catchwords:

Real property - Strata titles - Meeting - Resolution - Validity

Legislation:

State Administrative Tribunal Act 2004 (WA), s 11, s 167

State Administrative Tribunal Regulations 2004 (WA), reg 28
Strata Titles Act 1966 (WA), s 15(2)

Strata Titles Act 1985 (WA), s 3B(a), s 3C(a), s 3D, s 3(1), s 4(2), s 15(2), s 42A, s 42(8), s 82, s 83, s 97A

Result:

Interim Order granted in varied form

Category: B

Representation:

Counsel:

Applicant 1                   :     Self Represented
Applicant 2                   :     Self Represented
First Respondent           :     Not Represented
Second Respondent       :     Not Represented

Solicitors:

Applicant 1                   :     Self Represented
Applicant 2                   :     Self Represented
First Respondent           :     Self Represented
Second Respondent       :     Self Represented

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

Nil

Case(s) also cited:

Nil

MR C RAYMOND (SENIOR MEMBER):
REASONS FOR DECISION – INTERIM ORDER

Issue

Validity of a series of meetings and resolutions purportedly passed.

Applicants

The applicants are Peter Gavranich and Jillian Margaret Neale, as the proprietors of lot 6 on strata plan 2812 ("the Strata Plan").

Transfer of Proceedings

This application was originally made to the strata title referee. On 1 January 2005 the State Administrative Tribunal Act 2004 (WA) ("SAT Act") came into force. By virtue of s 167 of that Act this matter was transferred to the State Administrative Tribunal. I have been nominated to constitute the Tribunal pursuant to s 11 of that Act.
In accordance with the transitional provisions of the State Administrative Tribunal Regulation 2004 (WA) (reg 28) the matter is taken to have commenced in the Tribunal. However, the Tribunal may have regard to any record of the former adjudicator, and I have had regard to the record in relation to this matter.

Strata Plan and relevant Act

The strata plan was registered on 15 November 1974 pursuant to the Strata Titles Act 1966 (WA) ("1966 Act").
In 1985, the 1966 Act was repealed and replaced by the Strata Title Act 1985 (WA) ("1985 Act") which continues to be the relevant Act.

Parcel

The parcel is a 9 lot residential development at 14 Ozone Parade, Trigg, although, according to the strata plan the address for serving notices on the strata company is care G Cruickshank, 192 Wilding Street, Doubleview.
The name of the scheme is "Cesanatico Apartments".
Lot 1 is a stand-alone single-storey residence. There are two other buildings, each of two storeys.
Lots 2 and 3 are situated on the ground floor, beneath lots 6 and 7 on the first floor, in one building. Lots 4 and 5 are situated on the ground floor, beneath lots 8 and 9, in the other building.
There is an area of common property land around the buildings.
The strata plan indicates that on 9 January 1997 there was a proposed re‑subdivision which would have involved the cancellation of lot 1 and the creation of a new lot 10 to include lot 1 and part of the adjacent common property land, but that re‑subdivision has never been proceeded with. The original lots, in their original configurations, remain unchanged.

Lot boundaries

Pursuant to s 3(1) and s 3(2) each lot is a cubic space only, having as its boundaries the upper surface of the floor, the inner surfaces of the perimeter walls and the under surface of the ceiling of the part of the respective building in which it is situated. Everything else, including the perimeter walls, the floor slabs between the ground floor and the first floor of the two‑storey buildings, all ceilings and roofs, and the air space and all surrounding land is common property.
This means that the strata company is responsible for the repair and maintenance of the structural components of the lot 1 residence and each of the other two buildings.

By‑laws

When the strata plan was registered, its by‑laws were, pursuant to s 15(2) of the 1966 Act, the "standard" by‑laws in the Schedule to the 1966 Act.
Notification G443276, recorded on the strata plan on 9 April 1997, evidences the repeal of the 1966 Act by‑laws and the adoption of the by‑laws in Sch 1 and 2, plus the adoption of new Sch 1, by‑laws 16, 17 and 18.
The location page of the strata plan and area of common property and surrounding the lot 1 residence that area has a surveyor's endorsement "For use of lot 1".
The ground floor page of the strata plan shows a number of parts of the common property, apparently comprising carports and gardens, outlined in broken lines and with surveyor's endorsements indicating that those areas are for the use of the respectively – adjacent lots.
However, under the 1985 Act, those endorsements do not establish any legal rights over those areas. Section 42(8) allow the strata company to adopt a by‑law granting to specified lots the exclusive use of or special privileges in respect of the lots, with or without conditions, over parts of the common property.
The new Sch 1, by‑law 16 referred in notification G443276 granted exclusive use rights to garden areas and carports proprietors of each lots 1, 2, 3, 4 and 5.
The new Sch 1, by‑law 17 granted to the proprietors of each of lots 6, 7, 8 and 9 the exclusive use of balcony areas on the western side of each of those lots, although there is nothing on the strata plans which indicates that there are balconies.
The new Sch 1, by‑law 17 granted to the proprietors of each of lots 6, 7, 8 and 9 the exclusive use of balcony areas on the western side of each of those lots, although there is nothing on the strata plans which indicates that there are balconies.
" a height of three metres above the upper surface of the lowest floor level of the building comprising of the respective lot."
The new Sch 1, by‑law 18 granted to the proprietor of lot 1 the exclusive use and enjoyment of parts of the common property surrounding the lot 1 residence, but no upper height limits were specified.

Orders sought

The applicants have sought orders under s 42A, s 97A, s 3B(a), s 3C(a), s 3D and s 83. They have also sought an interim order under s 82.

Interim Order

The interim order sought is in the following terms
"That Deborah Fromm as chairperson of the Cesanatico Management Council be ordered to stop or suspend any further actions that were initiated from four resolutions passed at the adjourned meeting of the 26 October 2004."

Principal Orders

The Principal Orders sought are‑
"1.That Deborah Fromm owner occupier unit 5 be ordered to pay the owners of strata plan 2812 the appropriate penalty for breaching DOLI registered by‑law 16 exclusive use as written on form 21.
2.That an order invalidating a poll and subsequent special resolution passed at the extraordinary general meeting held on 12 October 2004 be served on Deborah Fromm chairperson of the management council and chairperson of the meeting.
3.That Deborah Fromm be ordered to pay Peter Gavranich and Jillian Margaret Neale tenants in common of unit 6, $106.60 being for all associated costs in connection with the lodgement of the application to the strata titles referee.
4.That Deborah Fromm chairperson of the Cesanatico Apartments management council and chairperson of the extraordinary meeting held on 12 October 2004 be ordered to invalidate that meeting."
As the 1985 Act stood at the time this application was lodged it was incumbent on the strata title referee to give written notice of the application to the strata company to which the application relates and to any other person who, in the opinion of the referee, would be affected if the orders sought were made.
It is apparent from the file that no steps had been taken by the referee to give notice of the application to the strata company or to any other party. The reason for that is probably because the strata title referee was giving consideration to and had commenced preparing reasons for decision in respect of the application for an interim order. It was not necessary to give notice of the application prior to considering whether or not to make an interim order.
Under the SAT Act the procedure in relation to strata titles applications has changed. It is now incumbent on the applicant to give notice of the application.
In the circumstances, it is not appropriate to give any consideration to the application for the principal relief sought. Before consideration can be given to the principal application the applicant will need to effect service on the strata title company and on Deborah Fromm, against whom the applicant seeks specific relief.

The Factual Background

The applicants provided a copy of a notice of extraordinary general meeting issued by the strata company on 23 September 2004 for a meeting to be held on 12 October 2004. The agenda was in the following terms ‑
"1. Consider and if thought fit, pass by unanimous resolution attached hereto to change the current exclusive use areas of land and balconies to ownership by re‑subdivision to bring the exclusive use areas and extended space for the balconies into the respective lots and change the by‑laws.
2. Discuss the necessary process as per the Strata Titles Act and determine how the expense of re‑subdivision is to be met."
The Strata Company advises ‑
"• The existing buildings remain as are and the outer walls, roof, structures, retaining walls, stairways, access paths on common property, and all other common property are the responsibility of the Strata Company except for lot 1 as outlined in the By‑laws.
• The owners of the 1^st floor units – 6, 7, 8 and 9, will not be responsible for the costs of maintaining the grounds of the lower lots unless the cost is incurred due to Strata Company responsibilities such as plumbing or sewerage, and these costs are explained in the amended By‑laws
• Each proprietor is under no obligation to change their exclusive use area to ownership should they prefer to continue to keep their area as common property."
The minutes of the 2004 EGM recorded those present as
"D Fromm
W Fromm
P Gavranich
K Anderson
C Granland
K Granland
J Bayer-Shervington
N Mallin
J Payne"
The minutes record that there was one proxy from M Teh to the Chairman, another from V & R Payne to J Payne and a third, from W Fromm to D Fromm.
There were apologies noted from G Hamilton and J Neals
The minutes also include the following ‑
"P Gavranich left the meeting before a vote could be held, therefore a poll was taken on the re‑subdivision as per the resolution circulated and as discussed: all present including proxies voted in favour of the re‑subdivision and the change of by‑laws, this being 25 of the 28 total unit entitlements, a special resolution was passed to continue the process, seek more information and advice, and the meeting stand adjourned with the date to be announced."
The minutes reflect that the meeting closed at 8 pm. There was no further reference to the adjournment.
On 16 October 2004, the Strata Company issued a "notice of adjournment". That notice included the following ‑
"…AGENDA AS PER EXTRAORDINARY GENERAL MEETING 12 OCTOBER 2004
The Strata Company advises as per the meeting held on 12 October 2004 the following change to the resolution as follows:
•The owners/proprietors of Cesanatico Apartments, strata plan 2812, Trigg, Western Australia consider and if though fit, pass by unanimous resolution to bring the current exclusive use areas of land and balconies into the respective lots by Re‑subdivision as per Part II Section 8 of the Strata Titles Act, 1985, as depicted on the attached Sketches.
•The proposed changes to the By‑laws have been amended as per the minutes of the meeting 12 October 2004 and are attached … "
A "meeting" was reportedly held on 26 October 2004 pursuant to that notice. The minutes of that "meeting" record that ‑
" … D Fromm moved that the Resolution be amended to state
The owners/proprietors of Cesanatico Apartments, Strata Plan 2812, Trigg, Western Australia consider and if thought fit, pass by unanimous resolution to bring the current exclusive use areas of land into the respective lots of Re‑subdivision as per Part II Section 8 of the Strata Titles Act, 1985, as depicted on sketch A.
As the owners of unit 6 were not present a unanimous vote could not be taken.
All present including proxies agreed with the resolution without dissent.
It was moved by D Fromm that the amended by‑laws be accepted including ‑
'an amendment to delete by‑law 18 in the draft by‑laws, therefore by‑law 19 becomes by‑law 18 and bylaw 20 becomes by‑law 19 respectively as attached.
deleting the height of the cubic space for the use of the lots to allow each situation to be dealt with individually as per by‑law 19 item D, E, F, and G and ensure the 1^stfloor units are not responsible for the cost of maintenance of vegetation, and
the amendment to by‑law 19 as attached stating the proprietors of lots 2, 3, 4 and 5 shall not encroach upon the space around the upper balconies as per item f be accepted.'
Seconded by all present and agreed without dissent.
"J. Bayer‑Shervington moved that the owners seek the advice of a strata titles specialist and consider recourse to the District Court or Strata Titles Referee, seconded by D. Fromm, and agreed without dissent. D. Fromm, chairman moved that to enable advice to be taken that the meeting be adjourned to a date to be announced. Seconded by all and agreed without dissent …".
The minutes conclude with ‑
"The meeting was adjourned at 7.40 p.m."
There was no mention of an adjournment to any specific date, time or place.
On 31 October 2004 the strata company issued a further "notice of adjournment", calling a "meeting" for 8 November 2004. The agenda was in the following terms ‑
"… The strata company advises as per the meeting held on 12 October 2004 the following change to the resolution as follows ‑
•The owners/proprietors of Cesanatico Apartments, strata plan 2812, Trigg, Western Australia consider and if thought fit, pass by unanimous resolution to bring the current exclusive use areas of land into the respective lots by re‑subdivision as per Pt II s 8 of the Strata Titles Act, 1985, as depicted on sketch A.
•The proposed changes to the by‑laws have been amended as per the minutes of the adjourned meeting of 26 October 2004."
The minutes of the 8 November 2004 "meeting" commence with a statement from the chairperson (not named) that ‑
"The purported adjournment of 26 October 2004 and this meeting are declared informal meetings and no decisions from these meetings will be acted upon."
However, the minutes then record that ‑
" …The vote of the extraordinary general meeting 12 October 2004 is valid and the vote was a unanimous resolution as per the Strata Titles Act 1985 Pt I s 3(a) as all present voted personally or by proxy and agreed with the resolution and the amendments as follows ‑
The owners/proprietors of Cesanatico Apartments strata plan 2812 pass by unanimous resolution to bring the current exclusive use areas of land and balconies into the respective lots by re‑subdivision as per Pt II s 8 of the Strata Titles Act, 1985, as depicted on the attached sketches.
The by‑law changes and additions as amended 12 October 2004 are valid as a vote without dissent …"
The minutes record that a letter dated 27 October 2004 registering the applicants' vote against the resolution, of 12 October 2004 had been received within 28 days after that meeting. The minutes also record that ‑
"The owners for the resolution (8 of 9‑25 of 28 unit entitlements) can take the case to the District Court as per s 51 of the Strata Titles Act, 1985".
The first named applicant has informed the Tribunal that an extraordinary general meeting of the strata company is to be held on Tuesday 22 February 2005 at 7 pm and consequently the applicants are anxious to have the Tribunal determine the application. For the reasons already given, the substantive application cannot be considered, but it would be open for relief to be granted by way of an interim order. Section 82 of the 1985 Act provides that an interim order should be granted if the Tribunal is satisfied on reasonable grounds that by reason of the urgent circumstances of the case the order should be made.
In my view there is a serious issue concerning the validity of the resolutions passed on 12 ,26 and 31 October and 8 November 2004 purporting to recognise as a unanimous resolution, the resolution which was passed on 12 October 2004.
As these are matters which will have to be finally considered when consideration is given to the principal orders sought it is not appropriate that I express any firm view. It is enough that there are serious issues raised by the application concerning the validity of these resolutions.
While the Tribunal has not been provided with a copy of the notice calling the extraordinary general meeting there must be some risk that the meeting will endeavour to further the proposed re‑subdivision. Even if that is not a matter to be dealt with at the meeting, there is a risk that steps will be taken pursuant to the resolutions which is likely to involve the incurring of costs and there is a possibility that at any time an attempt may be made to have a plan of re‑subdivision lodged for registration with the Registrar of Titles.
It is therefore appropriate that an interim order should be issued. While the form of order sought by the applicants is aimed at enjoining Deborah Fromm in her capacity as chairperson of the council of owners, the Tribunal is entitled under s 81 to make an order in terms different from the order sought, so long as it does not differ in substance from the order sought.
I have given consideration as to whether the applicants should be required to provide an undertaking as to damages as a pre‑condition to the grant of an interim order. The interim order is in the nature of an injunction and the giving of an undertaking as to damages is an important consideration because it operates as a means of preventing injustice before the rights of the parties have been finally determined.
Having regard to all the circumstances I consider that it is not appropriate to require any undertaking as to damages. The entire process followed in relation to the giving of the notices of resolutions and the conduct of the meetings referred to has been confused and it is in the interests of all lot owners that clarification of the status of the attempt to achieve re‑subdivision is obtained. It is apparent that further information and advice was being sought after the meeting on 12 October 2004. It is strongly arguable that the adjournment of that meeting was not in compliance with the 1985 Act and insufficient notice was given of the resolution put to the meeting on 26 October 2004. At the meeting on 8 November 2004 the minute reflected ‑
"•The purported adjournment of 26 October 2004 and this meeting are DECLARED INFORMAL MEETINGS and no decisions from these meetings will be acted upon."
The minute then proceeded to record that the vote of the extraordinary general meeting of 12 October 2004 is valid and the vote was a unanimous resolution, which it clearly was not, the first‑named applicant having left the meeting, and both applicants having registered their dissent in writing within 28 days thereafter.
The minute of the 12 October 2004 meeting recorded that the resolution had been passed as a resolution without dissent, but the opportunity to dissent was also lost to at least some owners, namely R & V Payne because the meeting of 26 October 2004 was held. At that meeting it was stated on behalf of these owners that they did not want to re‑subdivide the balconies and in consequence of that, the resolution, put to the meeting on 12 October 2004, was amended.

It is appropriate that the confused state of affairs currently existing be properly clarified.
In addition the enforcement of orders regime has changed and is now provided for under the SAT Act. It is important that interim orders issued by the tribunal are complied with. Under s 95(1) of the SAT Act a person who fails to comply with the decision of the Tribunal commits an offence for which a penalty of up to $10,000 applies. However, the sub‑section only applies in the event that the Tribunal makes a declaration to that effect as provided for under s 95(3). It is appropriate that such a declaration be made.
Accordingly, an order should issue in the following terms ‑
1. For a period not exceeding three months from the date hereof, the respondent, be restrained and an injunction is hereby granted restraining the respondent, its officers, servants, agents or otherwise, from taking any action so as to give effect, in any way, to the re‑subdivision of the lots, or common property shown on strata plan 2812 pursuant to any of the purported resolutions relating thereto made on 12 October 2004, 16 October 2004, 26 October 2004 and 8 November 2004;
2. It is declared that s 95(1) of the State Administrative Act 2004 (WA) applies in relation to the decision to make the above order.
I certify that this and the preceding 13 pages comprise the reasons for decision of the Tribunal.
DATED 22 FEBRUARY 2005
_________________________________________
C RAYMOND
SENIOR MEMBER: STATE ADMINISTRATIVE TRIBUNAL