GIANATTI and OWNERS OF VICTORIA APARTMENTS STRATA PLAN 2356 - [2011] WASAT 21

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: STRATA TITLES ACT 1985 (WA)

CITATION: GIANATTI and OWNERS OF VICTORIA APARTMENTS STRATA PLAN 2356 [2011] WASAT 21

MEMBER: MR C RAYMOND (SENIOR MEMBER)

HEARD: DETERMINED ON THE DOCUMENTS

DELIVERED : 4 FEBRUARY 2011

FILE NO/S: CC 746 of 2010

BETWEEN: LUIGI GIANATTI
Applicant
AND
OWNERS OF VICTORIA APARTMENTS STRATA PLAN 2356
First Respondent
SIME DARBY HOTELS PTY LTD
Second Respondent

Catchwords:

Strata titles - Whether Tribunal has jurisdiction to grant relief based on a determination that lease over common property is invalid - Power of Tribunal to make order in the nature of a declaratory order - Whether dispute over validity of lease places title of land in question

Legislation:

State Administrative Tribunal Act 2004 (WA), s 47(1), s 47(1)(b), s 50(1), s 51, s 91, s 121
Strata Titles Act 1985 (WA), s 7, s 7A, s 19, s 19(2), s 30, s 30A, s 31, s 42(2)(c), s 44, s 51, s 51(1a), s 51A, s 83, s 83(1), s 83(4), s 86(6), s 84(4), s 93, s 103F, s 103G, s 121, Div 2A s 21F and s 21Q, Pt VI
Strata Titles General Regulations 1996 (WA), Sch 3

Result:

Application dismissed for want of jurisdiction

Category: B

Representation:

Counsel:

Applicant:     Self-represented
First Respondent           :     Mr D Margaretic (Acting as Agent)
Second Respondent      :     Mr RJ Butcher

Solicitors:

Applicant:     Self-represented
First Respondent           :     Self-represented
Second Respondent      :     Butcher Paull & Calder

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

Gawor and The Owners of Dawesville Caravan Park Old Coast Road Mandurah, Strata Plan 14644 [2009] WASAT 170
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
The Owners of 100 President Street, Welshpool, Strata Plan 13322 and Damer [2008] WASAT 258

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

The applicant applied to the Tribunal under s 83(1) of the Strata Titles Act 1985 (WA) claiming an order deeming a lease over common property entered into between the Strata Company (first respondent) and the second respondent to be invalid and related relief. The matter was referred to a determination on the documents of a jurisdictional issue, namely, whether the Tribunal had power to grant relief because of the limitations placed by s 83(4) of the Strata Titles Act 1985. It was submitted by the second respondent that the proceeding should be dismissed under s 47(1) of the State Administrative Tribunal Act 2004 (WA) as being misconceived.
The Tribunal concluded that the nature of the dispute involved a consideration of the manner in which the strata company had performed the power granted to it to lease common property which required the strata company to be authorised by a resolution without dissent. On a proper construction of s 83(4) of the Strata Titles Act 1985 and having regard to the scheme of the Act, the Tribunal concluded that the subsection operated to preclude the Tribunal from exercising its general dispute resolution powers under s 83(1) of the Strata Titles Act 1985. This was because the dispute or complaint related to the performance of a function which could only be exercised or performed pursuant to a resolution without dissent. Consequently, the Tribunal concluded that the proceedings were misconceived and should be dismissed.
The Tribunal also considered alternative submissions made on behalf of the second respondent but rejected all of them. In doing so, the Tribunal commented upon the powers to make orders in the nature of a declaratory order and also expressed views that a dispute concerning the validity of a lease did not place the title of the land in question.

The application and issue for determination

On 1 June 2010, the applicant made application to the Tribunal under s 83(1) of the Strata Titles Act 1985 (WA) (ST Act). Unless expressly stated otherwise, all references to sections of legislation are to sections of the ST Act.
The application was initially commenced only against The Owners of Victoria Apartments Strata Plan 2356 (first respondent) but, pursuant to an order made by the Tribunal on 17 June 2010, Sime Darby Hotels Pty Ltd was joined as the second respondent. The application included claims relating to various financial issues in dispute between the applicant and first respondent. Those issues were resolved by mediation on 9 August 2010 resulting in their withdrawal. Remaining in issue are claims by the applicant for orders:
a)deeming the current lease over common property to be invalid and directing the strata company to immediately arrange the removal of the lease as an encumbrance on the registered strata plan no 23586; and
b)directing the first respondent and second respondent to allow unrestricted access to the common property in accordance with the ST Act.
On 26 August 2010, the Tribunal issued an order that a jurisdictional issue be determined whether the Tribunal had jurisdiction, despite the provisions of s 83(4), and consequently, whether or not the proceedings should be dismissed as misconceived under s 47(1) of the State Administrative Tribunal Act 2004 (WA) (SAT Act).
In the written submissions filed on behalf of the second respondent, the following bases are developed to support a conclusion that the Tribunal does not have jurisdiction.
1)Section 83(4) does not give the Tribunal power to make an order for the settlement of a dispute, or the rectification of a complaint, with respect to the exercise or performance or the failure to exercise or perform a power, authority, duty or function conferred or imposed by the ST Act where that power, authority, duty or function may only be exercised or performed pursuant to a unanimous resolution, resolution without dissent or a special resolution. As s 19(2) allows a strata company to lease common property only pursuant to a resolution without dissent, the dispute about the validity of the lease is one beyond the jurisdiction of the Tribunal.
2)It is within the power of the council of the first respondent, if so minded, to have the legal position of the lease determined at law by commencing legal proceedings for a declaratory order in the Supreme Court of Western Australia. This action, due to its cost, would require to be the subject of special business in general meeting, which would require a special resolution and accordingly results in jurisdiction being denied the Tribunal pursuant to s 83(4).
3)In any event, the applicant is, in effect, asking the Tribunal to make declaratory orders which the first respondent submits are essentially the province of the Supreme Court of Western Australia and that, accordingly, the proceeding should be struck out under s 51 of the SAT Act.
4)The exercise of jurisdiction under s 83(1) would involve the Tribunal determining issues relating to title which, by virtue of s 121 of the SAT Act, is beyond the jurisdiction of the Tribunal.
The submissions made by the applicant are confined to issue 1 above.

The grounds in support of the application

For the purposes of determining whether or not the proceedings are misconceived, it is necessary to approach the allegations made by the applicant, as set out in the grounds of the application, as if they were established. The relevant grounds are stated shortly as follows:
The registered lease over the common property was not constituted in accordance with the act [sic]. The owners were not made aware of the lease. A resolution without dissent was not presented at any AGM or EGM of the strata company. Section 19 transfer of lease of common property subsection (2). Additionally[,] the signatories on both the form 14 and the lease documents were not owners or members of council.
Form 14 is as set out in Sch 3 of the Strata Titles General Regulations 1996 (WA) and is a certificate of the strata company to the effect that a resolution without dissent or a unanimous resolution (in the case of a two lot scheme) was duly passed and that all necessary consents were given.

Issue 1: the effect of s 83(4)

The relevant provisions of the ST Act are as follows:
83.General powers of State Administrative Tribunal to make orders
(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 bylaws 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.
…
The applicant submits that s 83(4) applies in circumstances where a resolution without dissent is required but is not passed, or is passed and an interested party is dissatisfied with the result. Further, it is submitted that the section operates where an owner seeks an order from the Tribunal for something to be done in circumstances where a resolution without dissent would be required to authorise the strata company to do so. In all of these circumstances, the applicant submits the Tribunal does not have jurisdiction.
The applicant submits that, in this case, no power, authority, duty or function was 'failed to be performed', as no resolution was actually put to the strata company. It is submitted, therefore, that s 83(4) does not apply.
With respect, the construction for which the second respondent contends is not consistent with the language of the section nor the scheme of the legislation. A provision of a statute must be construed consistently with the language and purpose of all the provisions of the statute: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69].
The Tribunal's powers to resolve disputes are set out under Pt VI of the ST Act. The Tribunal is firstly given the general powers prescribed by s 83(1) above. Section 83(6) then specifically provides:
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.
The remaining sections of Pt VI then set out specific powers granted to the Tribunal to deal with particular types of disputes. Most of those disputes relate to powers which, in the ordinary course, would be exercised by the strata council which, by virtue of s 44, is empowered to perform the functions of the strata company subject to the ST Act and any restriction imposed or direction given at a general meeting. There are, however, some instances where the Tribunal is given express power to deal with disputes concerning the performance of the functions of the strata company which are reserved to the members in general meetings. Examples are s 103F and s 103G which relate to disputes concerning the grant or refusal of applications to effect alterations to a lot which, by virtue of s 7 and s 7A, require the approval of the other proprietor in the case of a two lot scheme, or an approval expressed by resolution without dissent.
There are also circumstances in which the Tribunal is specifically empowered to deal with a dispute which may be founded upon the passing of a special resolution. An example of this is s 93 which enables the Tribunal to declare a bylaw invalid in specified circumstances, one of which being if the bylaw was not made in accordance with the ST Act. So, for instance, a passing of what is known as a Schedule 2 bylaw, which must be passed by special resolution (s 42(2)(c)) would fall within the purview of the Tribunal. There are no specific provisions of Pt VI which give the Tribunal power to deal with disputes in relation to a unanimous resolution, although the Tribunal would have power to set aside a bylaw which, by chance, was passed unanimously, or to make a resolution for a two lot scheme relating to the specific passing of a resolution to change the boundaries of a lot or part of a lot under the scheme set out in Div 2A of the ST Act, and that resolution would be deemed a unanimous resolution for the purposes of s 21F and s 21Q thereof.
The powers granted to the Tribunal under Pt VI of the ST Act must also be seen against the context of the provisions thereof which preserve certain matters to be dealt with by the District Court of Western Australia. Section 51 specifically provides that, in any case where under the ST Act a unanimous resolution or a resolution without dissent is necessary before any act may be done and that resolution is not obtained, then, subject to certain requirements there set out, application may be made to the District Court. By virtue of s 51(1a), the section expressly does not apply to a two lot scheme. However, under s 51A, a proprietor may apply to the District Court where, under the ST Act, a unanimous resolution is necessary before any act may be done in respect of a two lot scheme. By s 51A(1a), the section expressly does not apply to a unanimous resolution that is required for the passing of a resolution under s 21F or s 21Q. As set out above, such a matter can be dealt with by the Tribunal.
Section 30 and s 30A deal with the termination of a strata scheme, or a survey strata scheme, respectively, by way of a unanimous resolution. Section 31 enables a proprietor or a registered mortgagee of a lot within a scheme to apply to the District Court for an order terminating a scheme. One of the circumstances in which that would be required is obviously where the motion to pass a unanimous resolution is unsuccessful.
It is within the above scheme that s 83, and in particular s 83(1), s 84(4) and s 83(6) operate and must be given effect. It is readily apparent that the scheme operates broadly to distinguish between:
a)the specific powers granted to the Tribunal within Pt VI commencing from s 84;
b)the general power to resolve disputes as provided for within s 83; and
c)the matters which are reserved for determination by the District Court which relate to matters in which either a unanimous resolution or resolution without dissent is required.
Turning then to s 84(4), it plainly has effect to ensure that the general power to resolve disputes under s 83(1) does not apply to circumstances in which a function is exercised which requires a unanimous resolution, a resolution without dissent or a special resolution. The second respondent does not contend otherwise. The second respondent's argument is that s 83(4) does not have the same effect where the function is purported to have been exercised, even though the function, if exercised, would require one of the specified forms of resolution.
It is no mere chance that the ST Act requires differing forms of resolutions to be passed. One can readily understand why a unanimous resolution would be required to terminate a strata scheme because it has such a drastic affect upon property rights. A resolution without dissent, which applies, for instance, when considering an application by a lot owner to effect alterations to his lot, sets the bar far lower, because there may be, particularly in a large scheme, a number of owners who simply are not interested in the application and therefore elect not to vote. It is also obvious that where ownership rights may be most affected, the legislature has reserved jurisdiction to deal with such matters to the District Court.
The ordinary language of s 83(4), consistent with the scheme of the legislation, ensures that matters involving the specified resolution types are not dealt with by the Tribunal under its general dispute resolution power. The jurisdiction and power of the Tribunal is defined by the mechanism of identifying matters falling outside the Tribunal's general dispute resolving powers by reference to the type of resolution required to authorise any particular act. By virtue of s 83(4), the limitation on power operates whether the strata company performs or fails to perform a particular function. The enquiry is whether the particular function is or is not required to be performed pursuant to the specified form of resolution. If the answer is in the affirmative, then s 83(1) cannot be used to resolve the related dispute. In order to enter into a valid lease, a strata company must be authorised by a resolution without dissent (or unanimous resolution in the case of a two lot scheme) and so a dispute about that matter cannot be resolved under s 83(1).
As none of the other specific dispute resolution powers set out in Pt VI apply, it is determined that the Tribunal does not have jurisdiction in respect of the relief sought by the applicant, the proceedings are misconceived and must be dismissed.
In view of the above conclusions, the remaining contentions will be addressed concisely.

Issue 2: the requirement of the strata company to be authorised by special resolution to commence legal proceedings

The applicant submits, in effect, as follows:
•it is within the power of the council of the strata company to commence legal proceedings in the Supreme Court for a declaratory order to resolve the issue of the validity of the lease;
•because of the restrictions imposed on expenditure under s 47(1)(b), the strata company would have to authorise the council to incur the expenditure of those legal proceedings and that would require a special resolution.
With respect, the applicant's submissions are misfounded. The issue is whether the applicant, as a proprietor of a lot within the scheme, is entitled to invoke the Tribunal's general dispute resolution powers under s 83 of the ST Act. For the reasons given above, the applicant is not so entitled.
The issue is to determine the effect of s 83(4) upon the proceedings commenced by the applicant. In order to do that, it is necessary to consider the matters which would be canvassed in a hearing of the dispute. The evidence would clearly have to address the circumstances in which the lease was entered into or was purported to have been entered into, and whether or not the strata company was authorised to enter the lease. In determining whether the strata company is so authorised, it is necessary to ascertain whether a general meeting was held and a resolution without dissent passed. It is because the power purported to have been exercised by the strata company involves either the valid exercise of the power under s 19 of the ST Act to enter into the lease or a failure to exercise that power under the authority of a resolution without dissent that s 83(4) precludes the Tribunal from exercising jurisdiction.
The possibility that the strata company might take action in the Supreme Court has nothing to do with the circumstances raised in this proceeding which cause s 83(4) to operate. If there was merit in the second respondent's argument, it would mean that the Tribunal would be precluded from dealing with any dispute of significance in which the strata company might or might not elect to take proceedings in the Supreme Court, and that simply cannot be correct.

Issue 3: relief in the nature of a declaratory order is the province of the Supreme Court

It is true that, as phrased, the applicant seeks that an order 'deem the current lease of the common property to be invalid', which could be regarded as being in the nature of a declaratory order.
The second respondent submits that the Tribunal should strike out the proceeding pursuant to s 50(1) of the SAT Act on the basis that it would be more appropriate for the matter to be dealt with by another court, namely, the Supreme Court.
Firstly, the submission is not within the terms of the matter which was referred to be determined by the Tribunal on the documents as outlined above. The first respondent has made no application for the matter to be dealt with under s 50 of the SAT Act. This is no mere technicality, because such an application would have to be dealt with by a judicial member.
In the circumstances, it is not appropriate to entertain the submission. If the Tribunal had otherwise found in favour of the applicant, it would be open to the second respondent to make a specific application under s 50 of the SAT Act. In any event, if the matter was otherwise within the power of the Tribunal to determine under s 83, it does not necessarily follow that, because relief is claimed which is in the nature of a declaratory order, it is inappropriate for the Tribunal to deal with the matter. To adopt that approach would be to place form over substance. The Tribunal has a wide jurisdiction within the framework of s 83 and it is inevitable that an order made in settlement of a dispute may on occasion require an order to be made of a declaratory nature. On the face of it, a member of the Tribunal could make such an order but, if there were any doubt, a judicial member could certainly do so (s 91 of the SAT Act).

Issue 4: the dispute involves determining issues relating to title

Again, with respect, the first respondent's submission is misconceived. Section 121 provides that the Tribunal shall not have jurisdiction under Pt VI in any case in which the title to land is in question. The entry into a lease in respect of common property held under the ST Act does not in any way put the title of the land into question.
As stated by the learned author, Mr Peter Butt, in Land Law (6th ed, 2010) at para 1905:
'Title' has two distinct senses in land law. Primarily it denotes 'ownership' to the extent that 'ownership' of land is possible, consistent with the feudal notion that land is held of the Crown. And so when we say that A has 'title' to land, we usually mean that A 'owns' the land.
In a second, and perhaps looser, sense, 'title' denotes the various acts and events that go towards proving ownership.
The second respondent relied on two earlier decisions of the Tribunal Gawor and The Owners of Dawesville Caravan Park Old Coast Road Mandurah, Strata Plan 14644 [2009] WASAT 170 (Gawor) and The Owners of 100 President Street, Welshpool, Strata Plan 13322 and Damer [2008] WASAT 258 (Damer) to support its submission, but neither of those cases are relevant. In Gawor, the Tribunal was concerned with the conversion of a lot into common property which had been transferred to the strata company. The dispute was therefore clearly related to title. Damer involved a claim based on adverse possession which again raised the issue of title.

Conclusion and orders

For the above reasons, the Tribunal determines that it does not have jurisdiction or power to adjudicate a dispute relating to whether or not the proper formalities were carried out in effecting the entry of a lease by the first respondent whereby common property was leased to the second respondent. The proceedings are misconceived and should be dismissed pursuant to s 47(1) of the SAT Act.
The Tribunal will accordingly cause an order to issue as follows.
1.The proceeding is dismissed as misconceived under s 47(1) of the State Administrative Tribunal Act 2004 (WA).

I certify that this and the preceding [38] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR C RAYMOND, SENIOR MEMBER