Gianatti and Ors and Sime Darby Hotels Pty Ltd
[2007] WASAT 75
•2 APRIL 2007
GIANATTI & ORS and SIME DARBY HOTELS PTY LTD [2007] WASAT 75
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2007] WASAT 75 | |
| STRATA TITLES ACT 1985 (WA) | |||
| Case No: | CC:1511/2006 | DETERMINED ON THE DOCUMENTS | |
| Coram: | MS J HAWKINS (MEMBER) | 2/04/07 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | LUIGI GIANATTI ROY SWEETLAND AMERSHAM HOLDINGS PTY LTD ROSALIND JOHNSON SIME DARBY HOTELS PTY LTD |
Catchwords: | Lease of common property Restriction of access to common property by lessee Applicability of by-laws in Sch 1 and Sch 2 of Strata Titles Act 1985 (WA) |
Legislation: | State Administrative Tribunal Act 2004 (WA), s 83 Strata Titles Act 1985 (WA), s 9, 12(2), s 19(2), s 42, s 42(2), s 42(5), s 79(2), Sch 1, by-law (2)(a), Sch 2, by-law 2 |
Case References: | Nil |
Orders | 1. The application be dismissed. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : STRATA TITLES ACT 1985 (WA) CITATION : GIANATTI & ORS and SIME DARBY HOTELS PTY LTD [2007] WASAT 75 MEMBER : MS J HAWKINS (MEMBER) HEARD : DETERMINED ON THE DOCUMENTS DELIVERED : 2 APRIL 2007 FILE NO/S : CC 1511 of 2006 BETWEEN : LUIGI GIANATTI
- ROY SWEETLAND
AMERSHAM HOLDINGS PTY LTD
ROSALIND JOHNSON
Applicants
AND
SIME DARBY HOTELS PTY LTD
Respondent
Catchwords:
Lease of common property - Restriction of access to common property by lessee - Applicability of by-laws in Sch 1 and Sch 2 of Strata Titles Act 1985 (WA)
Legislation:
State Administrative Tribunal Act 2004 (WA), s 83
Strata Titles Act 1985 (WA), s 9, 12(2), s 19(2), s 42, s 42(2), s 42(5), s 79(2), Sch 1, by-law (2)(a), Sch 2, by-law 2
(Page 2)
Result:
Application dismissed
Category: B
Representation:
Counsel:
Applicants : Self-represented
Respondent : Mr R Butcher
Solicitors:
Applicants : Self-represented
Respondent : Butcher Paull & Calder
Case(s) referred to in decision(s):
Nil
(Page 3)
Summary of Tribunal's decision
1 The applicants are proprietors of Lots 1, 7, 25, 33 and 36 of the Victoria Apartments – Subiaco Strata Plan 23586.
2 The respondent runs the business of short stay accommodation upon the strata complex. To do so, it has individual leases of all lots within the strata complex – apart from those lots owned by the applicants. The respondent also has a lease of the common property of the strata complex. Reliant on the lease of the common property, the applicants, their occupiers or residents have been denied access to parts of the common property by the respondent.
3 For the purposes of the present application, the applicants do not challenge the validity of the grant of the lease of the common property to the respondent.
4 The applicants maintained that as a result of s 42(5) and by-law 2 Sch 1 and by-law 2 Sch 2 of the Strata Titles Act 1985 (WA), despite the lease to the respondent of the common property, the respondent could not restrict their access to the common property.
5 The Tribunal found, however, that this submission overlooked the fundamental nature of the respondent's right as a lessee, which is the right to exclusive possession and occupation. The Tribunal considered, therefore, that the interpretation of the two by-laws upon which the applicants relied must be in such a way that preserved the respondent's right to exclusive possession. In light of that interpretation then, the Tribunal did not consider that the respondent was in breach of by-law 2 Sch 1 or by-law 2 Sch 2 of the Strata Titles Act 1985 in restricting access by the applicants to the common property.
6 Accordingly, the Tribunal dismissed the application.
History
7 The applicants are proprietors of Lots 1, 7, 25, 33 and 36 (the applicants) of the Victoria Apartments – Subiaco Strata Plan 23586 (Victoria Apartments). Sime Darby Hotels Pty Ltd (the respondent) is the owner of Lot 23 of the Victoria Apartments. The respondent runs the business of short stay accommodation in respect to Victoria Apartments. To enable the respondent to run that business, it has individual leases in respect to all lots within Victoria Apartments, except those lots owned by
(Page 4)
- the applicants. In addition, the Owners of Victoria Apartments (the strata company) granted the respondent a lease of the common property of Victoria Apartments. That lease is dated 30 March 2001. Item 1 of the Schedule to that lease described the leased premises as follows:
"So much of the property in the strata plan as is not comprised in a Strata Lot and including (but without limiting the generality of the foregoing) gardens, parking areas, driveways, entrance ways, passageways, stairways, communal lavatories and washrooms, sheds and buildings."
9 The original application, filed with the Tribunal on 25 September 2006, sought to challenge the validity of the lease of the common property. However, at a directions hearing on 21 December 2006, the applicants advised the Tribunal they no longer wished to pursue that part of the application which sought to question the validity of the lease. For the purposes of this application, therefore, the applicants do not challenge whether the lease was originally granted to the respondent, nor whether the respondent has properly exercised the option to renew. The sole remaining relief sought by the applicant is that they be allowed access by the respondent to the common property as tenants in common in accordance with the Strata Titles Act 1985 (WA) (ST Act).
10 The applicants, who do not use the respondent to lease out their properties, allege that they and their tenants are being denied access by the respondent to the common property of Victoria Apartments, namely, the pool, spa, toilet/change rooms, barbecue areas and parking bays.
11 It was agreed by the parties that this matter be determined on the papers, following the filing of documents by both parties. The Tribunal allowed notifiable persons, as referred to in s 79(2) of the ST Act, to also file any relevant submissions they wished to make, in respect to the
(Page 5)
- determination of these proceedings. At the close of time for the filing of submissions, the Tribunal had only received submissions from the parties and not from any other persons.
Legislative provisions and relevant clauses of the lease of the common property
12 The applicants seek to rely on s 42(5) of the ST Act, which states:
"A lease of a lot or common property shall be deemed to contain an agreement by the lessee that he will comply with the by-laws in force."
13 The standard by-laws in Sch 1 and Sch 2 of the ST Act apply to the Victorian Apartments. The applicants rely upon by-law 2(a) of Sch 1, which reads as follows:
"(2) A proprietor, occupier or other resident of a lot shall -
(a) use and enjoy the common property in such a manner as not unreasonably to interfere with the use and enjoyment thereof by other proprietors, occupiers or residents, or of their visitors."
"2. Obstruction of common property
A proprietor, occupier, or other resident of a lot shall not obstruct lawful use of common property by any person."
15 Clauses 5(g) and 5(l) of the lease of the common property state as follows:
"5. The Lessee hereby covenants and agrees with the Lessor that during the Term the Lessee shall:
…
• Comply with statutes
(g) comply in all respects with the provisions of any Act (State or Federal) for the time being in force affecting the Leased Premises or the occupier or owner thereof and with all regulations, requisitions, orders and notices for
- the time being made or given thereunder or in pursuance of statutes which may require structural demolition or additions to the Leased Premises, to requirements relating to the use or occupancy of the Leased Premises …
- • Strata Company rules and regulations
(1) the Lessee shall comply with all by-laws and all rules and regulations made by the Strata Company pursuant to its by-laws and the provisions of the Act."
"6. Lessor's Covenants
The Lessor hereby covenants with the Lessee that during the Term, the Lessor shall permit the Lessee upon paying the rental hereby reserved and observing and performing the covenants and stipulations herein contained or implied to hold and enjoy peaceably and quietly the Leased Premises during the Term without any interruption by the Lessor or any person or persons rightfully claiming under or in trust for the Lessor."
Issues
1. Is the respondent denying the applicants access to part or parts of the common property?
2. What is the effect of s 42(5) of the ST Act? How do the by-laws upon which the applicants rely apply to the common property leased by the respondent?
3. Has any breach of a by-law been made out?
(Page 7)
Facts, submissions and findings in respect to issues
Issue 1 - Is the respondent denying the applicants access to part or parts of the common property?
18 The applicants' submission, filed 5 February 2007, states that, although they and their tenants are able to access their apartments, they are unable to access the parking bays which are part of the strata lots and which are located inside the security gates. Additionally, they claim that the respondent has denied them access to the pool, spa, toilet/change rooms and barbecue areas. This submission is supported in documents filed by the applicants. In a letter by the respondent to Mr L Gianatti dated 27 March 2006, the respondent advised Mr Gianatti that if he wanted access and egress to his apartment, together with use of the common property facilities from 30 March 2006, he would be required to negotiate a licence with the respondent.
19 In addition, there are email exchanges between Mr Gianatti and Ms Carmel Gerrans, who appear to be employed by the respondent. The email exchanges between Mr Gianatti and Ms Gerrans are dated 11 September 2006 and 12 September 2006. In an email from Ms Gerrans to Mr Gianatti dated 12 September 2006, Ms Gerrans indicated that she had advised three men who had been staying in Lot 25 (owned by Mr Gianatti) that the pool and barbecue area was not part of the lease for apartment 25.
20 There is also a letter from the respondent's solicitors dated 13 September 2006 to the Manager of Executive Apartments Pty Ltd (Executive Apartments). The letter concerns apartments 25 and 36 of the Victoria Apartments, owned by Mr Gianatti and Ms Johnson. In that letter, the respondent's solicitors stated that the respondent held a lease over the common area of the property which included the carpark, pool, spa, barbecue and so on. It went on to suggest that Executive Apartments, who managed apartments 25 and 36, were advertising on its website, photographs of the common area and it was claimed that the photographs implied that the common area was part of the facilities available to persons who leased apartments 25 and 36. The letter went on to state that the respondent had ascertained that persons leasing apartments 25 and 36 were not informed that they were not entitled to use the common areas.
21 At par 17 of the respondent's amended response, it has alleged that the respondent has not prevented the applicants from access to their apartments. The application states that the applicants can only access
(Page 8)
- their units via pedestrian gates around the property. Paragraph 5 of the respondent's submission states as follows:
"If the residents, occupiers and/or proprietors all had the right to park their vehicles, use the pool and spa, and hold their poolside parties on the common areas the Respondent's lease over the common areas would be of no worth. In effect, the Respondent would have no lease that was enforceable in any meaningful sense."
Issue 2 – Of what effect is s 42(5) of the ST Act? How do the by-laws in Sch 1 and Sch 2 apply to the common property leased by the respondent?
23 The applicants rely on a combination of s 42(5) and Sch 1 by-law 2 and Sch 2 by-law 2 to argue that they are entitled to access to the common property, notwithstanding that it is leased to the respondent. The applicants point out that cl 5(g) and cl 5(l) of the lease of common property incorporate relevant provisions of the ST Act into the lease. The applicants also contend that there is a fundamental principle at law that a lease cannot extinguish, change or override any Act (State or Federal). The applicants go on to state as follows:
"As the strata company's by-laws are part of the lease, compliance is mandatory and anything contained within the bylaws, including the word lawful, takes precedence over anything else contained within the lease. It is therefore lawful to access common property by other proprietors, occupiers or residents, or their visitors."
24 The reference in this passage to "lawful" is to the use of that word in Sch 2 by-law 2. According to the applicants, the same result follows as a result of the respondent's status as the proprietor of one of the lots.
25 The applicants are not lawyers and not legally represented, and the Tribunal cannot, and does not, expect their submissions to withstand rigorous examination as might be the case if they were. However, in the Tribunal's view, the applicants' submissions overlook the fundamental
(Page 9)
- nature of the respondent's rights as a lessee, which is the right to exclusive possession and occupation. Although not necessary, cl 6 of the lease states this explicitly. The ST Act clearly contemplates that there can be a lease of common property (see s 19(2) and s 42(5) of the ST Act) and it would be inconsistent with the nature of a lease if the non-lessee proprietors were able to continue to enjoy the common property after the lease was granted.
26 How, then, are the two by-laws upon which the applicants rely to be interpreted? The answer must be in such a way that preserves a lessee's right to exclusive possession. Therefore, Sch 1 by-law 2(a) requires proprietors or occupiers to use and enjoy common property in such a manner as not unreasonably to interfere with the use and enjoyment by others. Where a proprietor or occupier is sole lessee of common property, then its maintenance of exclusive occupation rights is not an "unreasonable" interference – it is a reasonable interference.
27 Similarly, Sch 2 by-law 2 prohibits a proprietor or occupier obstructing lawful use of common property by any person. Granting a lease has the result that the lessors give up their immediate right to use the property in question. Therefore, a proprietor or occupier who is the sole lessee of common property, by excluding other proprietors from that common property, is not obstructing their lawful use.
28 The Tribunal notes that the applicants withdrew an alternative claim that the lease of the common property was invalid. It is therefore bound to assume its validity.
Issue 3 – Is the respondent in breach of by-law (2)(a) of Sch 1 or bylaw 2 of Sch 2 of the ST Act by denying the applicants access to the common property?
29 Adopting the findings made in respect to Issue 2, the answer to this issue is clearly "no".
30 The Tribunal notes that the strata company only receives a peppercorn rental for the lease of the common property. This appears to be unusual. Nonetheless, as already noted, the applicants have not sought to challenge the validity of the lease of the common property to the respondents.
Orders
1. The application is dismissed.
(Page 10)
I certify that this and the preceding [30] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MS J HAWKINS, MEMBER
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