Grant and the Owners Of Rosneath Farm - Strata Plan 35452 - [2006] WASAT 162

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: STRATA TITLES ACT 1985 (WA)

CITATION: GRANT and THE OWNERS OF ROSNEATH FARM - STRATA PLAN 35452 [2006] WASAT 162

MEMBER: MR C RAYMOND (SENIOR MEMBER)

HEARD: 8 FEBRUARY 2006

DELIVERED : 22 JUNE 2006

FILE NO/S: STR 144 of 2004

BETWEEN: PETER ANDRE GRANT
Applicant
AND
THE OWNERS OF ROSNEATH FARM - STRATA PLAN 35452
Respondent
Proprietors of Lots 3, 5, 7, 17, 18, 23 and 24
Proprietors of Lot 1 and Lot 25
Notified Persons

Catchwords:

Strata Titles Act 1985 (WA) Application for declaration that bylaws invalid and for an order that they be repealed Whether certificate under s 77B a mandatory prerequisite to making of application

Legislation:

Animal Welfare Act 2002(WA)
Dividing Fences Act 1961 (WA)
Dog Act 1976 (WA)
Interpretation Act 1984 (WA), s 61(1)(f)
Real Estate and Business Agents Act 1978 (WA), s 26
State Administrative Tribunal (Conferral of Jurisdiction) Amendment and Repeal Act 2004 (WA)
State Administrative Tribunal Act 2004 (WA), s 47, s 47(1)(a), s 75(2), s 167(13)
State Administrative Tribunal Regulations 2004 (WA), reg 39(5), reg 37, reg 37(1)(a)
State Administrative Tribunal Rules 2004 (WA)
Strata Titles Act 1985 (WA), s 3C, s 5C, s 7, s 7A, s 8, s 8A(b), s 8A(c), s 11, s 12, s 14(2), s 15, s 16, s 35, s 35(1c), s 36, s 36(1)(a), s 36(1)(b), s 36(1)(c), s 36(2), s 36(3), s 37(1)(c), s 37(1)(g), s 41(1), s 41(6), s 42, s 42(1), s 42A, s 42B, s 42(1)(b), s 42(2), s 42(2b), s 42(3), s 42(6), s 42(8), s 44, s 44(1), s 54(4), s 55(1), s 55(1)(b), s 77, s 77B, s 77B(2), s 79, s 79(1), s 79(2), s 80A, s 80A(c), s 80A(d), s 80C(a), s 80C(b), s 80C(c) ,s 93, s 93(2), s 93(3), s 97, s 97(2), s 99A, s 115, s 123B(1), s 123(3), s 123(4), Sch 1, Sch 2, Sch 2A, Sch 3, cl 13A(7)

Strata Titles General Regulations 1996 (WA), reg 37, reg 37(1)(a)

Result:

Application successful in part

Category: B

Representation:

Counsel:

Applicant:     Ms P Cahill with Mr M Atkinson, both of Counsel
Respondent:     Mr R Rowell (Chairman)
Proprietors of Lots 3, 5,
7, 17, 18, 23 and 24       :     Mr G McIntyre SC
Proprietors of Lot 1
and Lot 25:     Mr DF Beere of Counsel

Solicitors:

Applicant:     Atkinson and Associates
Respondent:     Self-represented
Proprietors of Lots 3, 5,
7, 17, 18, 23 and 24       :     Christopher Garvey
Proprietors of Lot 1
and Lot 25:     Beere and Mayer

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

Bank of New South Wales v Commonwealth (1948) 76 CLR 1
Carr v Finance Corporation of Australia Ltd (No 2) (1982) 42 ALR 29
Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) (1981) 35 ALR 151
Farleigh Investments Pty Ltd & Anor v Reefking Pty Ltd [2002] WASC 115
Lancashire County Council v Municipal Mutual Insurance Ltd [1996] 3 All ER 545
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
The Owners of Rosneath Farm - Strata Plan 35452 and Clark [2005] WASAT 14

Case(s) also cited:

Electric Acceptance Pty Ltd v Doug Thorley Caravans (Aust) Pty Ltd (1981) VR 799
The Wik Peoples v The State of Queensland & Ors; The Thayorre People v the State of Queensland & Ors [1996] HSCA 40 (23 December 1996)
Thomas Brown and Sons Ltd v Fazal Deen (1962) 108 CLR 391

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

The applicant applied for orders declaring that the by‑laws contained in a management statement and in a later variation of those by‑laws, as applying to the respondent survey strata company, were invalid, and alternatively should be repealed, as being in breach of s 93 and s 97 of the Strata Titles Act 1985 (WA).
The respondent raised a preliminary point that the proceedings should be dismissed by reason that the certificate provided by the applicant under s 77B of the Strata Titles Act 1985 had been incorrectly given. The certificate certified that there were no relevant provisions in the by‑laws relating to the resolution of the matter in dispute. The applicant contended that it was not possible to have given any other certificate because of its contention that the management statement was invalid.
In accordance with the principles outlined in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR at 389, the Tribunal considered, not whether the provision was mandatory or directory, but whether the purpose of the legislation was that an act done in breach thereof would be invalid. The Tribunal considered the amendments effected to the Strata Titles Act 1985 by the State Administrative Tribunal (Conferral of Jurisdiction) Amendment and Repeal Act 2004 (WA). It was noted that s 80A of the ST Act had been repealed, but that section provided that the Strata Titles Referee may dismiss an application in a number of circumstances, one of which was the failure to accompany the application with a certificate under s 77B, or to provide a certificate which had not been correctly given. The Tribunal concluded that the Strata Titles Referee was not obliged to dismiss the proceeding in such circumstances. In addition, it noted that, as the Act stood subsequent to the amendments effected by the State Administrative Tribunal (Conferral of Jurisdiction) Amendment and Repeal Act 2004, there was no longer a power to dismiss in respect of a certificate that had been wrongly given and that neither the State Administrative Tribunal Rules 2004 (WA) nor the State Administrative Tribunal Regulations 2004 (WA) had preserved the former Strata Titles Referee's power in respect of any of the categories referred to in s 80A, except in one circumstance relating to the failure to provide further information requested within a reasonable period. The Tribunal therefore concluded that it had jurisdiction to deal with the merits of the application, and the respondent's application to strike out the proceedings should be dismissed.
The by‑laws in question constitute, in the first instance, a management statement lodged with a plan of subdivision and registered on 12 June 2000, and secondly, variations to the by‑laws under Notification H918130 registered on 5 November 2001. The Tribunal found that the latter by‑laws were invalid because the requisite notice of meeting had not been given sufficiently ahead of the meeting, the motions related to amendments to Sch 1 by‑laws and therefore had to be passed without dissent which had not occurred, and the certificate incorporated in Form 21 Notification of Change of By‑laws incorrectly stated that the bylaws had been approved by way of a special resolution.
In relation to the management statement, the applicant attacked a number of the by‑laws as either having been made without power, not in accordance with the Act or the Regulations, or on the basis that they 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. The applicant further submitted that pursuant to the principles applicable to severance of invalid provisions in legislation, in the absence of an express severability provision, once it was shown that some provisions were not within the scope of the power of the strata company, the whole must be considered bad unless it could be inferred that the provisions are not to be interdependent. Having regard to s 42(6) of the Act, which effectively deemed the by‑laws to bind the strata company, proprietors, any mortgagee in possession or occupier or other resident as if the by‑laws had been signed and sealed by the strata company and each such person and as if they contained mutual covenants to observe and perform all the provisions of the by‑laws, the Tribunal considered that the principles applicable to the severance of contractual provisions were more appropriate, namely whether the invalid promises were in substance so connected with the others as to form an indivisible whole which could not be taken to pieces without altering its nature.
The applicant also submitted that the effect of s 93 of the Strata Titles Act 1985 was such that it was open to the Tribunal only to make an order that the whole of a by‑law was invalid, if any part of it was not. The Tribunal concluded that the power to make an order for the whole of a by‑law to be made invalid necessarily included the power to make a lesser order that part of the order was invalid. This was because all that the Tribunal did was declare the legal status of the by‑law as it existed, and it would be absurd if part of the by‑law would be regarded as invalid in court proceedings, but that the whole bylaw had to be declared invalid in proceedings brought under s 93 of the Strata Titles Act 1985.
The Tribunal thereafter made a determination in respect of each bylaw criticised by the applicant and made an overall assessment as to whether the bylaws could stand on an application of the above severability test. The Tribunal concluded that the management statement could stand subject to severance of the offending by‑laws or parts of the by‑laws found to be invalid. The Tribunal made orders declaring the by‑laws invalid consistent with the above, and directed the applicant to lodge a copy of the order with the Registrar of Titles pursuant to s 115 of the Strata Titles Act 1985 (WA).

The application

The applicant applies for orders:
1)Declaring that the by‑laws set out in a management statement registered as dealing number G966274 and the variations of the by‑laws contained in the notification of change of by‑laws registered as Dealing No H918130 are invalid; alternatively,
2)An order that the above by‑laws and variations to the bylaws be repealed; and
3)That the applicant lodge a copy of the order(s) referred to above on the Registrar of Titles pursuant to s 115 of the ST Act.
The by‑laws described above apply to the Owners of Rosneath Farm Strata Plan 35452, the above named respondent.
The management statement, and the variations to the by‑laws referred to, are to be read with the standard Sch 1 and Sch 2 by‑laws applicable under the Strata Titles Act 1985 (WA) (the ST Act) which have not been substituted as a whole. To avoid confusion, reference hereafter to the by‑laws will be a reference to either the management statement, or the variation to the by‑laws registered as Dealing No H918130 unless the context indicates otherwise.
The by‑laws are intended to regulate the operations of the Rosneath Farm which has a theme based on Permaculture and Pattern Language principles. It is located equidistant from and between the Towns of Yallingup and Dunsborough in the southwest of Western Australia. According to the respondent's submissions, it comprises approximately 120 hectares of common property of which approximately one half is arable land and includes numerous dams and "sinks" as well as a permanent residential building, a shortstay residential building, a building that is licenced to contain a wood‑fired bakery, four sheds and an ablution building all upon the common property.
The documentation filed on behalf of the notified persons show that permaculture has a particular meaning to the members of the respondent. Persons who wish to purchase lots in the survey strata scheme are required to attend a course designed to provide an understanding of the ethics and principles of permaculture. Without attempting to distil an exhaustive definition from the material provided, permaculture involves the relationship between plants, animals, buildings and infrastructures. It is a philosophy of working with, rather than against, nature. The by‑laws in turn describe Pattern Language as a framework for residents to participate more fully in the design and construction of living spaces and buildings.
The applicant contends that the by‑laws are in many respects beyond the power of the strata company to enact them, were not made in accordance with the ST Act, or should not have been made having regard to the interests of all proprietors, and in some respects are meaningless, such that the whole of the management statement and amending by‑laws should be declared invalid, or alternatively repealed under s 93. Further, the applicant contends that the amending by‑laws fall to be invalidated under s 97. The application did not initially claim any relief under s 97 but the Tribunal granted leave to amend the application at the hearing, there having been no objection from any of the other parties. A formal order granting leave will be made.
All of the parties represented at the hearing have filed Statements of Issues, Facts and Contentions, together with all documents on which they relied and have made both written and oral submissions in support of their respective positions. All of the notified persons, except Mr Clark, the proprietor of survey strata Lots 1 and 25, oppose the relief sought as a whole. Mr Clark does not attempt to deflect the applicant's criticism of the by‑laws, save in respect of Sch 1 By‑law 19, as amended by the management statement, and he further contends that any invalid by‑laws can be severed. Submissions were also received by persons who had been notified of the application under s 79(2) of the ST Act prior to direction orders being made for those represented in the proceedings to file Statements of Issues, Facts and Contentions. Some of those submissions were made also on behalf of persons who were represented and who accordingly later filed Statements of Issues, Facts and Contentions. The earlier submissions, to which reference is made, basically raise emotive arguments emphasising the basis upon which lots were purchased and that the invalidating of the by‑laws would defeat the purpose for which Rosneath Farm was created.
During the course of the hearing, reference was made to other proceedings before this Tribunal and the Supreme Court. The decision in The Owners of Rosneath Farm - Strata Plan 35452 and Clark [2005] WASAT 14 gives some background to the matter and relates to the alleged failure of Mr Clark, as the original proprietor and developer, to adhere to the terms of an Agreement to Facilitate Staged Development, which is alleged to have affected the cash flow needed to proceed with the future development by way of resubdivision of Lot 25 and the provision of funds needed for the purposes of operation of the development. It is also apparent, by this application, that the applicant wishes to dispose of Lot 2 owned by him and the existence of the by‑laws are alleged to restrict his ability to dispose of the same.

Preliminary issue

The respondent made application on 30 November 2005 for an order striking out the application on the basis that it was submitted that the s 77B certificate completed by the applicant is not correct.
As evident by the strike out application, the applicant had indeed lodged a certificate in purported compliance with s 77B of the ST Act. That section provides as follows:
"77B. Disputes procedures for scheme to be followed
(1)An application for an order under this Part in relation to a scheme shall be accompanied by a certificate under subsection (2) given by the applicant.
(2)The certificate must state either
(a)that there are no relevant provisions in the by‑laws of the strata company for the scheme that relate to the resolution of the matter in dispute; or
(b)that there are such provisions and the applicant has, so far as is possible, complied with them."
The certificate filed by the applicant is in terms of s 77B(2) that there is no relevant provision in the by‑laws. It is conceded that there is a dispute resolution provision in the by‑laws but the applicant contends that he could not have certified other than in the manner in which he had, because he asserts that the by‑laws are invalid. In these circumstances, because the issue was interwoven with the issues raised in the substantive application, the Tribunal directed that the strike out application be heard as a preliminary issue together with the substantive application.
Senior Counsel for the notified persons (other than Mr Clark) supported the respondent's strike out application as did Mr Beere for Mr Clark. The respondent, represented by Mr Rowell, supplemented these submissions by reference to the written submissions filed on 30 November 2005. In substance, the combined argument is that the intent of the legislature was to ensure any dispute resolution scheme provided for under the by‑laws was followed, to avoid the cost and inconvenience of formal proceedings. It was submitted that on a proper construction of the legislation s 77B creates a precondition to the commencement of proceedings for good public policy reasons.
It was submitted for the applicant that once the application had been accepted by the Executive Officer of the Tribunal under s 44 of the State Administrative Tribunal Act 2004 (WA) (the SAT Act) that was effectively the end of the matter, unless the application fell to be dismissed under any of the grounds referred to in s 47 of the SAT Act, namely, that the proceedings are frivolous, vexatious, misconceived or lacking in substance, being used for an improper purpose, or otherwise an abuse of process. I am unable to accept this submission.
The substance of the application goes to the jurisdiction of the Tribunal as such, and as accepted by the applicant's counsel, the Tribunal is bound to satisfy itself that it has jurisdiction, whether or not raised by the parties. If it is correct that the Tribunal does not have jurisdiction, then in my view, the matter falls within subsection 47(1)(a) of the SAT Act because it can be said that the application is misconceived, if it is brought without jurisdiction.
In accordance with the principles outlined in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, a court determining the validity of an act done in breach of a statutory provision should not ask itself whether compliance with the provision is mandatory or directory and, if directory, whether there has been substantial compliance with the provision, but instead, should ask whether it was a purpose of the legislation that an act done in breach of the provision would be invalid (at page 389).
It is necessary to consider the wording of the ST Act prior to its amendment in 2004 when the jurisdiction of the Strata Titles Referee (Referee) was transferred to this Tribunal, because the application was lodged with the Referee on 22 December 2004. Jurisdiction was transferred to the Tribunal pursuant to the State Administrative Tribunal (Conferral of Jurisdiction) Amendment and Repeal Act 2004 (WA) (Conferral of Jurisdiction Act) with effect from 1 January 2005. Section 77B was in the same terms as above stated. Section 79(1) stated that subject to s 80A, after receiving an application, the Referee was 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. Further provision was made as to the requirements of the notice, including that a time be specified for receipt of written submissions. Section 80A provided as follows:
"80A. Dismissal of applications in certain cases
The Referee may, without being obliged to comply with section 79 and notwithstanding that a time specified under that section may not have expired, by order dismiss an application under this Part if it appears to him that
(a)the application does not comply with section 77;
(b)the application is not accompanied by a certificate under s 77B, or, even though such a certificate is included, the certificate has not been correctly given;
(c)the application is frivolous, vexatious, misconceived, or lacking in substance;
(d)a decision in favour of the applicant is not within the jurisdiction of the Referee; or
(e)the applicant has unreasonably delayed complying with a requirement under s 80C(a)."

The reference in (a) to the application complying with s 77 related to a number of formal requirements which are not relevant, save for a requirement to comply with s 77B.
Under s 80C(a) the Referee was empowered to require an applicant to provide him with further information in relation to the application.
In my view, the effect of s 80A was to give the Referee a discretion to be exercised judicially, and in accordance with the justice of the case. Thus, the failure to comply with the formal requirements of s 77 could be remedied if the Referee wished to give the applicant an opportunity to do so. In the same vein, if insufficient information had been provided to enable the application to be properly investigated, the Referee could elect to require the applicant to provide further information. If there was an unreasonable delay in providing that information, the Referee could determine whether or not to dismiss the application. Thus while incidental information might have been of assistance, or even more significant information may have remedied an apparent weakness in the application, the Referee had a discretion to decide whether or not to determine the application on its merits. By contrast, one would expect that once the referee formed a view that an application was either frivolous, vexatious, misconceived or lacking in substance (s 80A(c)), or that a decision in favour of the applicant was not within jurisdiction (s 80A(d)) that a decision must follow that the application be dismissed. It does not necessarily follow, however, that the decision could be reached before the time specified under s 79 had expired, and in both instances, the Referee might wish to require further information if that could remedy the apparent defect in the application.
In all of the above situations, the Referee was required to give consideration to the application, in order to determine the appropriate course to be followed. There is no apparent reason why the approach in respect of subsection 80A(b) should be any different in relation to the provision of the s 77B certificate. The power to dismiss on the basis that the certificate was not correctly given might in some circumstances only be capable of being determined after a response had been received from the respondent.
If it was intended that noncompliance with s 77B was as submitted, "a precondition to commencement of proceedings" one would have expected that the legislature would have had no difficulty in expressing that intention more clearly. An example of this is to be found in Sch 3 to the ST Act, as amended by the Conferral of Jurisdiction Act. Clause 13A(7) thereof provides that the application not be accepted.
For the above reasons, I conclude that any failure to comply with s 77B at the time when the application was lodged on 22 December 2004 did not affect the jurisdiction of the Referee. That conclusion is fortified by the amendments effected by the Conferral of Jurisdiction Act. Subsection 79(1) and s 80A of the ST Act were repealed with effect from 1 January 2005. Section 167(13) of the SAT Act provides that where a matter is transferred to the Tribunal, relevantly, in circumstances in which the former adjudicator does not continue to exist, which is the case, that the practice and procedure of the former adjudicator continues to apply and that the Tribunal has the powers of the former adjudicator in dealing with the matter, if and to the extent that the regulations or rules provide. The State Administrative Tribunal Rules 2004 (WA) contain no relevant provision. However, the State Administrative Tribunal Regulations 2004 (WA) (Regulations) contain in reg 39(5) a provision that if before the commencement day (1 January 2005) the matter was being dealt with by the Referee under the ST Act and the Referee had made a requirement under s 80C(a) or s 80C(b) of that Act, but that requirement had not been complied with before that date the Tribunal has, in relation to that matter the power that the Referee had under the ST Act: s 80C(c). That is a reference to a power to refuse to deal with the application until the requirement has been complied with.
It is apparent therefore, that the legislature did not consider it necessary, in relation to a matter transferred to the Tribunal under the transitional provisions, to make any provision for applications which had not complied with s 77 or s 77B of the ST Act. Similarly the right to dismiss proceedings because of an unreasonable delay in complying with a requirement under s 80C(a) was also omitted. It must be inferred that the reason for this is that the legislature considered that the general powers available under the SAT Act were sufficient to regulate the conduct of matters transferred, which were not the subject of specific rules or regulations. It would also follow that a failure to comply with s 77B in respect of an application lodged post 1 January 2005 would also not affect the jurisdiction of the Tribunal to deal with the matter.
In addition, in this matter, the application when lodged was accompanied by a s 77B certificate. The power which was granted to the Referee to investigate that situation and dismiss an application for a certificate wrongly given has been repealed. Before the Tribunal, once a certificate has been provided in compliance with s 77B, that is the end of the matter insofar as dismissal of the proceedings is concerned.
It remains open for a party to apply for the proceedings to be stayed, pending compliance with a dispute resolution process prescribed under the by‑laws if the certificate has not been correctly given. Any such application would obviously be assessed on its merits.
In this instance, By‑law 44, by its heading, reflects that the dispute resolution process provides a procedure to be followed as a prerequisite to the making of an application to the Referee for relief under the ST Act. The making of the by‑law to that effect is authorised by Sch 2A cl 14 but the by‑law cannot prevail over the construction of the ST Act itself as canvassed above. It must be noted that s 77B also applies equally to a dispute resolution provision made under s 42 in the case of either a strata or survey-strata scheme under which it would not be required to make the procedure a pre-condition to applying to SAT.
It follows, for the above reasons, that the Tribunal has jurisdiction to deal with the merits of the application. The application to strike out the proceedings will be dismissed.

The substantive issues to be determined

The submissions made by the parties raise various issues which may conveniently be considered under the following broad headings. All of the submissions made have been taken into account. While the submissions of the notified persons, who did not participate in and were not represented at the hearing, were noted, insofar as they indicated general opposition of proprietors of lots, they were otherwise given no weight.
1)Are the amended by‑laws the subject of Notification H918130 invalid by reason of procedural irregularities?
2)Are there by‑laws forming the management statement which are invalid and/or fall to be repealed under s 93 of the ST Act?
3)Can the offending by‑laws, or any part thereof, be severed?

Validity of amended by‑laws: meeting of 23 September 2001

Notification H918130 records that the amended by‑laws were enacted as a result of proprietors agreeing to them by special resolution at a general meeting held on 23 September 2001. The applicant asserts that the notification is false.
Central to the determination of this issue is the classification of the bylaws sought to be amended.
The notice of the meeting referred to two motions. The first was to amend the by‑law concerning resale of lots. An examination of the management statement shows that this is By‑law 16.4.5 which is part of a series of by‑laws dealing with the theme of the development. Schedule 2A read with s 42(2b) of the ST Act prescribes that a by‑law of the kind dealing with the control, preservation of the essence or theme of the development under the scheme is classified as a Sch 1 by‑law. It is noted the management statement classifies the by‑law in this way. Section 42(2b) further provides that a Sch 1 by‑law may only be made, amended or repealed, relevantly, by resolution without dissent.
The second motion was to amend the by‑laws by repealing all of the Sch 1 and Sch 2 by‑laws, and replacing them with an amalgamation of Sch 1 and Sch 2 by‑laws, as modified by the original management statement "and the other recent amendments". Again, to the extent the amendments dealt with Sch 1 by‑laws, a resolution without dissent was required.
The minutes of the meeting on 23 September 2001 are inadequate. There is no record of who moved the motions or how the quorum was calculated or how voting was conducted. The applicant raised many criticisms of the manner in which the meeting was called, the notice period given and the failure of the minute to reflect that any proxy had been granted in respect of the co‑owners of Lot 1 referred to in the minute as "Clarkes". All that the minute reflects in relation to the motions is the following.
"See Motions on Notice of Special General Meeting.
Motion 1 + 2 ammendements. [sic] Carried with two dissents.
Motion 2 carried unanimously."
The minute reflects that the owners present were "Clarkes Lot 1, Ervine Lot 24, Black Lot 6, Rowell Lot 3 and Lot 23". Further that proxy votes granted to Tom Black were given in respect of Nash Lot 5, Grant Lot 2, Robertson Lot 19, Benstead and Watt Lot 17, Rowell and McGeachie Lot 18, Kendrick Lot (no number specified) and Maley Lot 22.
In these circumstances, it is apparent on the face of the minute of the meeting that motion 1 failed to achieve a unanimous resolution which it was required to do. It has accordingly not been validly passed.
There are a number of concerns in relation to motion 2. As already pointed out, there is no record of how the voting was conducted. If, by a show of hands, the Clarks as joint owners of Lot 1 were not entitled to vote without a valid proxy. The standard Sch 1 By‑law 14(7) requires that coproprietors may vote by proxy jointly appointed by them and in the absence of such a proxy are not entitled to vote on a show of hands, except when the unanimous resolution of proprietors is required by the ST Act.
The evidence from the applicant, which is not disputed, is that notice of the meeting was given by email on 9 September 2001. Section 3C requires that at least 14 days notice must be given. Subsection 61(1)(f) of the Interpretation Act 1984 (WA) specifies that in computing times for the purposes of a written law, where there is a reference to a number of clear days or "at least" a number of days between two events, both the days on which the days happen shall be excluded. Accordingly, only 12 days notice of the meeting was given. In addition to this, the form of notice was anything but specific referring as it did to "other recent amendments".
Section 97 provides that where the Tribunal considers that the provisions of the ST Act have not been complied with in relation to a meeting of the strata company, it may make an order either invalidating any resolution, or refusing to invalidate the resolution. Subsection 97(2) specifically provides that the Tribunal shall not make an order under subsection (1) refusing to invalidate a resolution or election unless it considers:
"(a)that the failure to comply with the provisions of this Act did not prejudicially affect any person; and
(b)that compliance with the provisions of this Act would not have resulted in a failure to pass the resolution, or have affected the result of the election, as the case may be."
The applicant has established circumstances which would permit an order invalidating the resolutions made on 23 September 2001. The notified persons submit that as there is no evidence to show that any failure to comply with the provision of the ST Act prejudicially affected any person and that compliance would not have resulted in a failure to pass the resolution, the Tribunal should refuse to invalidate the resolution. With respect to the notified persons, that ignores the evidential burden which lies on them to satisfy the Tribunal that it should not make the order sought by the applicant.
There may be circumstances in which it would be appropriate to infer, in the absence of direct evidence, the criteria necessary to enable the Tribunal to refuse to make an order invalidating a resolution. In my view, this is not such a case. The respondent has failed to provide adequate records in the form of the attendance register. The minute of the meeting is deficient as discussed above. In addition, the applicant has provided a copy of a newsletter issued by the respondent dated October 2001 which contains information inconsistent with the minute of the meeting. It reads as follows:
"By‑laws update
The Special Meeting in September resulted in the first motion receiving one vote against, and all other votes and proxies voting in favour of both motions. As required by the Act, we advised several people who had not voted of the results of the meeting, and told of them of their right to register their views of the second motion within 28 days. Gary and Jacqueline King voted against the motion, despite several representations by Richard Clark and Tom Black. Therefore, we are unable to rationalise the by‑laws at this time. The by‑laws as they have been passed by meetings will now be forward to DOLA for their registration. In due course, you will receive formal amendment notices to attach to your copies of the Management Statement. We had hoped to be able to give you one sequential document, with all the Schedule 1 and Schedule 2 by‑laws and our Management Statement amendments in addition to all integrated. This will not be possible at the moment."
Notwithstanding the above advice, the certificate included in Form 21 Notification of Change of By‑laws certifies that a special resolution was duly passed at a meeting of the strata company on 23 September 2001 and became unconditional on 21 October 2001. It also represented that the by‑laws were Sch 2 by‑laws, which as indicated above was not correct either. For the above reasons, I find that the amended by‑laws the subject of dealing Notification H918130 are invalid and the Tribunal will order accordingly.

Severance principles

As appears below, there are by‑laws or parts of by‑laws which are invalid. The applicant submits that in such circumstances, the whole of the management statement must be struck down in accordance with the principles discussed in Bank of New South Wales v Commonwealth (1948) 76 CLR 1, at 369 370. If that is correct, it would not be necessary to reach a view in respect of each bylaw which has been subjected to criticism. For that reason, it is convenient to determine in principle whether or not offending by‑laws, or parts of bylaws, can be severed so as to retain the balance of the management statement, or not.
In the Bank of New South Wales case, Dixon J stated, at 369 370, that in the absence of a severability clause:
"the rule is that legislation which by a general collective expression covers objects some of which are and some which are not within the scope of the power of the legislature, the whole must be considered bad. Although the test is one of intention, it cannot be presumed that Parliament gave its assent to the partial operation of its enactment … it was not to be assumed that connected or associated provisions were enacted as separate expressions of the will of the legislature. No severance could be effected unless an inference that the provisions are not to be independent can be positively drawn from the nature of the provisions, from the manner in which they are expressed or from the fact that they independently effect the person or things within power in the same way and with the same results as if the full intended operation of legislation had been valid."
I do not accept that the principles set out above apply in relation to a management statement taking the form of reflected under Notification G966274.
In truth, the management statement reflects only the intention of the original proprietor: s 5C. Although Rowell Consulting Services Pty Ltd affixed its common seal to the management statement (together with that of the original proprietor of the fee simple of the parcel), that was done only in the capacity of "Estate Manager", a position to which reference is made in the management statement. However, by virtue of subsection 42(2b), the by‑laws included in a management statement lodged with a survey strata plan are deemed to be bylaws made under s 42. Subsection 42(6) effectively further deems that the bylaws for the time being in force bind the strata company, proprietors and any mortgagee in possession, occupier or other resident of a lot to the same extent as if the by‑laws had been signed and sealed by those entities and persons and as if they contained mutual covenants to observe and perform all the provisions of the by‑laws.
In these circumstances, I consider the ascertainment of the relevant intention is to be determined in a manner akin to that applied in respect of a contract. Those principles are usefully set out at some length in Farleigh Investments Pty Ltd & Anor v Reefking Pty Ltd [2002] WASC 115 and the various authorities referred to therein. The authorities recognise that the test for deciding questions of severability that had been formulated as useful in particular cases are not always satisfactory for cases of other kinds and that to some extent each case must depend on its own circumstances. That having been said, I consider the following test for severability is apposite, namely, whether the invalid promises are, in substance, so connected with the others as to form an indivisible whole which cannot be taken to pieces without altering its nature.
While the above conclusion is an answer to the applicant's submission that the Bank of New South Wales case requires the whole of a by‑law to be struck down if any part of it is invalid, it does not meet the applicant's further submission that, in any event, on a proper construction of s 93, the Tribunal may only make orders declaring a by‑law to be invalid or order the repeal of the bylaw. Initially, I was attracted to that view, but after further consideration, I do not consider it to be correct.
If a by‑law is invalid because it was made without power, was not made in accordance with the ST Act or the Regulations, or should not have been made having regard to the interests of all the proprietors in the use and enjoyment of their lots or the common property, then it is invalid from the outset. All that this Tribunal does is declare that the by‑law is invalid. Thus, it would be open to a member of a strata company sued for payment of a levy charged pursuant to an invalid s 42B by‑law to raise that invalidity before the court in which the action is commenced. It would be an absurd outcome if, before a court, only the invalid portion of a by‑law might be unenforceable, whereas before the Tribunal the whole by‑law must be considered to be unenforceable, if any part of it is invalid. If this is correct, the form that a particular set of by‑laws takes would fortuitously affect the extent of any validity.
In addition, subsection 93(3) empowers the Tribunal to make an order under this section, that order being one of the types of orders referred to in subsection 93(2). A person entitled to make an application under s 93 may apply for the whole of a by‑law to be made invalid and the Tribunal has power to make that order. But, the greater power in this context should include the lesser power, to declare that the by‑law is invalid to a certain extent, which is a result that can be achieved by applying the principles of severability. This result can be achieved by application of the principle that where the ordinary grammatical meaning would lead to absurdity or an incongruous result, words may be read into an act to achieve a result consistent with Parliament's manifest intention: Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) (1981) 35 ALR 151; so that references in s 93 to a by‑law could be read as having added immediately thereafter the words "or part thereof". The legislature could not have intended that the whole of a by‑law should be struck down when it is invalid to a minor extent not affecting the bylaw in all other respects.

On that basis, I will examine each of the by‑laws which the applicant attacks. In the first instance, that will result in provisional findings as to whether part, or the whole of a particular by‑law is invalid. A final conclusion as to whether the management statement can stand, subject to the severance of those parts, or whether it must fall because the invalid by‑laws are so connected with the others as to form an indivisible whole which cannot be taken to pieces without altering its nature, will thereafter be made taking all of the effected by‑laws into account.

Validity of management statement by‑laws under Notification G966274

I shall deal with the by‑laws under the same headings and in the same order as addressed by the applicant in its Statement of Issues, Facts and Contentions.

Restrictions on dealing with the lot

This relates to By‑law 16.5 (incorrectly referred to by the applicant as 16.4.5). This by‑law purported to be amended by the amended by‑laws under Notification H918130 which has been held above to be invalid. The notice for the meeting to vote on the proposed amendment reflected that it was necessary to amend the by‑law because it had received advice that it is illegal for the strata company to act as a real estate agent. That advice was correct s 26 of the Real Estate and Business Agents Act 1978 (WA). The first sentence of the by‑law requiring that the strata company be the sole agent for the resale, rental or lease of lots and the buildings thereon is therefore invalid because it is not in the interests of all proprietors to make such a by‑law. The second sentence providing for fees for such services relates to the first sentence and is meaningless without it.
The applicant also criticises the third and last sentence of the by‑law which provides that the strata company may assist a seller by advancing up to 30% of the expected sale price prior to settlement "after completing an agency agreement with the proprietor" and ensuring adequate security for the advance. On the face of it, this sentence is also dependent upon the strata company being appointed the sole agent but even if the words "completing an agency agreement with the proprietor" could be severed, the by‑law is not one which is made having regard to the interests of all proprietors in the use and enjoyment of their lots or the common property, because ultimately the funding for that advance would have to come from other lot owners. I consider that the whole of Bylaw 16.5 is invalid.
There are other criticism made of By‑law 16.4.4 in that it requires as part of the control and preservation of the theme of Rosneath Farm that certain education requirements be met prior to occupancy, purchase or rental or lease (of a lot).
The applicant has provided evidence of difficulties which he has experienced in attempting to sell Lot 2. This is said to be contrary to s 42(3) which provides that no by‑law is capable of operating so as to prohibit or restrict the devolution of lots or any transfer, lease, mortgage or other dealing therewith.
Section 42(1)(b) specifically prescribes that a strata company may make by‑laws not inconsistent with the ST Act for any matter specified in Sch 2A. Schedule 2A includes provision for by‑laws for the control or preservation of the essence or theme of the development under the scheme. The theme of the development, as reflected in By‑law 16, is to provide a mixture of residential, commercial, farming and tourism structures and processes enabling people to live and work and learn on the site. The attendance at courses is designed to ensure that those purchasing and living within the scheme share the common purpose reflected in the theme.
To give s 42(3) the meaning for which the applicant contends means that by‑laws designed to control or preserve a theme are permitted only if, firstly, the by‑laws are not in themselves inherently capable of prohibiting or restricting devolution of a lot, or secondly, the theme in itself has the effect of restricting or prohibiting devolution.
In considering whether a theme has this effect in a particular case there may be times when fine judgments relating to marketing theories and demographics have to be made. For any one sector of a market which might be attracted to a theme there will be others which are not. It is unlikely that the legislature intended that s 42(3) should operate in this way, given that it has specifically permitted that bylaws can be made for the control and preservation of a theme.
In this case, the theme is designed to attract people who may be regarded as falling outside the conventional mainstream of society, who are looking for an alternative, more sustainable and, on their tenets, an ecologically more responsible way of living.
I do not consider that s 42(3) is intended to prevent the control or preservation of a theme such as that developed for Rosneath Farm. I consider the subsection is intended to catch by‑laws, which in themselves are capable of prohibiting or restricting the devolution of a lot, by way of the method or procedures which are prescribed as a prerequisite to that devolution occurring. I do not consider that any of the by‑laws contained in Bylaw 16.4.4 have that effect, in the context of the sectors of the market which would have an interest in the lifestyle offered by the Rosneath Farm development.

Missing documents

By‑law 16.2 is challenged on the basis that it states that the guiding principles for the design of the village are primarily drawn from two books, without the books being incorporated as part of the by‑laws. I consider that this is no more than a statement of principle which does not give rise to any specific rights or obligations which the strata company may be obliged to enforce.
Although not raised at this point by the applicant, it is noted that Bylaw 16.4.3 refers to the common property works committee being responsible for recommending priorities for buildings and other works on the common land as contained in the initial Infrastructure List attached at Appendix 1. There is no such attachment. The responsibility for making a recommendation lies with the common property works committee. Extrinsic evidence would permit the identification of the initial Infrastructure List. I do not see the omission of the document as giving rise to any difficulty.
By‑law 9.5 is criticised because it refers to the management of conservation areas being undertaken in accordance with the Permaculture Plan for the parcel attached as Appendix 2. The appendix is not attached. The Permaculture Plan is further dealt with in By‑law 33 as being "the prime guide for the management of the common property". It states that the first Permaculture Plan has been drawn up by the developer and the original proprietor. Again, I see no difficulty in extrinsic evidence identifying the Permaculture Plan. By‑law 33 provides for it to be revised. By‑law 33.5 provides that a copy of the current Permaculture Plan is to be shown to each intending proprietor prior to the completion of any contract to purchase a strata lot. The Permaculture Plan is intended to be a flexible guide. Ultimately, as further discussed below, the responsibility for the common property lies with the council of the strata company, subject to the general direction of members in general meeting. I do not consider that the omission of the documents affect the validity of either By‑law 9.5 or By‑law 33.
By‑law 34.1 states that as part of the Permaculture Plan, the permaculture management guidelines are the detailed requirements for a specific land use area. Again, for the reasons stated above, I do not consider that this affects the validity of the by‑law.

Council and committees

The applicant asserts that the provision in the by‑law for three particular committees, the building approval committee, the land use committee and the common property works committee are inconsistent with the ST Act, which as stated above requires that the functions of the strata company subject to the ST Act and any restrictions imposed or directions given at a general meeting, be performed by the council of the strata company. It is stated that the three committees are given broad decisionmaking powers inconsistent with the above.
It must be remembered that the standard by‑laws subject to the amendments effected by the management statement continue to apply and that the management statement must be read together with the standard by‑laws. Schedule 1 contains by‑laws governing the operation of the council of the strata company. Those council members are charged with performing the functions of the strata company. There is nothing wrong in the council setting up subcommittees for various tasks provided that the decisionmaking process remains vested in the council as a whole.
By‑law 26 relates to the building approval committee. By‑law 26.1 provides that the task of the building approval committee is to ensure the built environment is in accordance with the theme. If this is read as meaning that the committee must enforce the by‑laws, it would be invalid, as that is a function of the council. But, it is capable of being read as meaning no more than that it should observe that compliance occurs. Such a reading is consistent with the principle that an interpretation should be adopted which will preserve the validity of the document: Lancashire County Council v Municipal Mutual Insurance Ltd [1996] 3 All ER 545.
By‑law 26.1 continues to then state that the committee shall administer and approve structures and landscaping for proprietors, licensees and the strata company, and provide educational resources for potential builders. To the extent that it provides that the committee "shall administer and approve structures and landscaping" it usurps the power of the council and is invalid. If the words in By‑law 26.1 "administer and approve structures and landscaping for proprietors, licensees and the Strata Company, and" are severed, the deficiency in the by‑law will be met and it will continue to have meaning.
By‑law 26.2 provides that the committee shall have the full delegated authority of the council to approve buildings, to decide in which form such applications should be made and to liaise with such bodies as it requires to ensure decisions are reasonable and acceptable to other authorities. To the extent that it provides "have the full delegated authority of the council to approve buildings, to decide which form such applications should be made, and to …" it is invalid. The words in quotations could be severed.
The first sentence of By‑law 26.4 provides that this approval shall precede the Shire of Busselton approval process. That sentence is invalid because in its present context it conveys an approval by the building approval committee which is invalid for the reasons given above. The first sentence could be severed. Although there will be nothing in the by‑laws to indicate when approval of the strata council is required, there is sufficient left to convey an obligation on the part of a proprietor to comply with the by‑laws.
By‑law 26.5 provides for the committee to be increased by up to two proprietors whose lots are adjacent to the lot the subject of an application for the duration of that application. This is inconsistent with the above requirements of the ST Act and is therefore invalid.
By‑law 36.1 is criticised because it provides that the common property works committee is responsible for the control, management, use and maintenance of infrastructure and buildings on any part of the common property not the subject of one or more activity licences. This provision is inconsistent with the requirements of the ST Act as discussed above and is accordingly invalid.
Various by‑laws are attacked on the basis that they include reference to the "Estate Manager", which is a position not created by or defined in the bylaws. Further consideration will be given below to each of the bylaws identified and criticised by the applicant, but as a general proposition, the Estate Manager is identifiable from the management statement as being Rowell Consulting Services Pty Ltd, the common seal of which is affixed, in that capacity. Provided therefore that the committees have an advisory role to the council, I do not consider that the validity of the respective by‑laws is affected.

Seeking to bind outside parties

Section 42(6) provides that by‑laws bind only the strata company, proprietors, any mortgagee in possession and occupiers or other residents. Consequently, the applicant asserts, and I accept, that bylaws endeavouring to bind other parties are inconsistent with the ST Act and are invalid.
By‑law 5, By‑law 7 and By‑law 9.1 include a licensee amongst those who are properly bound by the by‑laws. In each case, severance of the word "licensee" resolves the difficulty.
By‑law 9.2 refers to any person breaking the speed limit set by the strata company shall be subject to various penalties involving banning of motor vehicles for periods of time. The reference to any "person" could be dealt with in the same way as "licensee" above. However, the applicant also attacks this particular by‑law on the basis that s 42A of the ST Act empowers a strata company to make a by‑law providing for a penalty, not exceeding the prescribed amount, for a breach of any specified provision of the by‑laws. The Australian Oxford Dictionary (2nd Edition, 2004), gives the meaning of penalty as being a punishment, especially a fine, for breach of law, contract; a fine paid; a disadvantage, loss. In the context of s 42A, it is clearly intended that any penalty to be imposed is to be in the nature of a fine in a monetary amount.
As I consider that By‑law 9.2 is inconsistent with s 42A, it follows that the respondent did not have the power to make the by‑law and it is invalid.
Bylaw 9.6 is criticised by the applicant because it refers to family guests. However, it does not endeavour to bind family guests. It makes proprietors responsible for the conduct of their guests. I accordingly do not consider the criticism to be justified.
By‑law 35 is criticised on the basis that it is said to extend the reach of bylaws to bind licensees. The by‑law provides for the issue of activity licences in terms of which residents within Rosneath Farm may be licensed, for a fee, to carry out "productive or creative activities upon the common property or to serve the proprietors of Rosneath Farm or to serve the public involved in some interaction with or upon the parcel". Bylaw 35.4 provides that a licensee not a proprietor must meet all the other conditions that proprietors must meet. While no by‑law is effective to bind a licensee, it is effective to bind the strata company to ensure that, in offering a licence, it will be in terms that are the same as apply to proprietors. I consider, therefore, that the by‑law is valid as a by‑law relating to the management of the lots and common property.
The land use committee is dealt with in By‑law 32. By‑law 32.1 provides that the land use committee shall be formed at the first Annual General Meeting of the strata company. That indicates that the members are to elect the committee which is inconsistent with that committee being a subcommittee of the council. It suggests that the functions of the land use committee fall outside those of the council which is inconsistent with s 44(1) of the ST Act. I accordingly consider that By‑law 32.1 is invalid.
Bylaw 32.2 provides that any estate manager appointed by the strata company is ex officio a permanent member of the committee and three others shall be appointed as described in s 5 of Sch 1. This makes plain that the election process is similar to that which is prescribed under Sch 1 Bylaw 5 for the election of the council and is subject to the same criticism as By‑law 32.1. Further, it is not competent to appoint a person who is not a council member to a committee with responsibility to perform the functions of the council. I consider that this by‑law is invalid.
By‑law 35.11 provides that the rights of the licensee to resume activities or to receive compensation for capital and other equipment and stock are protected by the dispute resolution procedure which is later prescribed. This bylaw extends the operation of the by‑laws beyond the ambit of s 42(6) and is accordingly invalid. By‑law 35.12 to Bylaw 35.14 inclusive are all subject to the same criticism and are invalid. In each case, the by‑law attempts to regulate rights and obligations relating to licensees.
By‑law 35.15 provides that substantial variations to financial relationships between the licensee and the strata company shall require unanimous approval of the committee. This appears to be a reference to the land use committee. It further provides that if the committee cannot agree after two meetings, the matter shall be put to a special meeting of the strata company. The by‑law invests the committee with a power which must be exercised by the council, and I accordingly find that the by‑law is invalid.
By‑law 40.3 is criticised because it provides that the head of each household owning and/or occupying a residence shall be responsible for the care and operation of composting toilets and evaporative trench or transpirative systems. As the head of each household, as referred to, is either the owner, or a resident I do not consider that the bylaw overreaches s 42(6) of the ST Act. Each owner and all residents are bound by the by‑laws.
By‑law 44 is criticised because it prescribes a dispute resolution procedure which is stated to include activity licence holders in its application. The by‑law is subject to other criticisms, which will be dealt with further below, but this particular concern would be resolved by the severance of the words "activity licence holders" in the preamble to the by‑law.

Restrictions on structures

The applicant contends that s 7A of the ST Act, which applies to structural erections, alterations and extensions in relation to a survey strata scheme permits a proprietor to carry out any of such works, subject only to the need to obtain consent, as prescribed in the section, in the event that the works would not conform to plot ratio restrictions or open space requirements for the lot. On that basis, Bylaws 17, 18, 20 to 26, inclusive, are said to be invalid because they contain other specific controls and requirements relating to such matters as the use of materials, building heights, provision of water tanks, disposal of wastes, effluent disposal areas, location of radio masts, TV antenna and the like.
Bylaw 25 precludes having a bore, dam or well on a residential lot and Bylaw 26, which has already been referred to, prescribes the tasks of the building approval committee. By‑law 28 is criticised on the same basis because the applicant contends that although the by‑law purports to deal with plot ratio restrictions and open space requirements, it does not deal with those matters. By‑law 19 is criticised because it controls clearing of vegetation. The applicant says that if a proprietor has the right to erect a structure that necessarily involves the right to clear the footprint of the proposed structure, subject only to compliance with any applicable environmental or local government laws. Bylaw 13 is criticised because in dealing with the requirement to comply with the ST Act and the bylaws in relation to alteration of structures on the lot, it also in effect requires that notice be given to the strata company prior to planting trees or shrubs that might grow above 1.2 metres high by defining such trees or shrubs as an alteration to a structure. The applicant says that defining a tree or a shrub as a structure does not make it so.
Central to the applicant's argument is a comparison with the provisions of s 7 of the ST Act, which applies to structural erections, alterations and extensions in respect of a strata scheme. It prohibits the erection of any structure without the approval of the strata company and imposes detailed procedural requirements which must be followed to obtain that consent. Importantly, it sets out the grounds on which approval may be refused which are, breach of plot ratio restrictions or open space requirements and in the case of a lot that is not a vacant lot, that the works will result in a structure that is visible from outside the lot that is not in keeping with the rest of the development, or which may affect the structural soundness of a building, or may interfere with any easement created by s 11 or s 12 of the ST Act, or on the ground prescribed that it will breach the by‑laws. The applicant submits that the contrast between s 7 and s 7A demonstrates that the intent in relation to a survey strata scheme, governed by s 7A of the ST Act, is that a proprietor has freedom to develop the lot as he wishes, subject to compliance with relevant laws. Accordingly, the regime prescribed in the above by‑laws is inconsistent with s 7A and is therefore invalid.

Insurance

The applicant contends that By‑law 41.1 is invalid as being inconsistent with s 54(4) of the ST Act. By‑law 41 provides that notwithstanding and in addition to the requirements of the ST Act for insurances, the strata company shall effect insurance for, amongst other things, under By‑law 41.1, buildings and contents extended to cover malicious damage. In my view, the proper construction of this provision is that it relates to buildings on common property. It recognises the obligations under the ST Act and then specifically provides for the insurance in question. On the basis that the above construction is open and is to be preferred as being the construction which will uphold the validity of the bylaws, I do not consider that the by‑law is invalid.
By‑law 41.6 is attacked on the basis that it is inconsistent with s 55(1)(b) of the ST Act. Section 55(1) provides that a strata company shall effect and maintain insurance – (a) in respect of any occurrence against which it is required by law to insure, and (b) against such other risks as the strata company may from time to time determine. By‑law 41.6 provides that the strata company shall effect insurance indemnifying strata company officers and council, and committee members which the applicant says is inconsistent with the requirement that the Council determines from time to time what other risks should be insured against. The notified persons represented by Mr McIntyre submit that this must be read as subordinate to the ST Act.
I accept the applicant's submission and find that the by‑law is invalid.

Safety and security

By‑law 42.2, By‑law 42.3 and By‑law 42.4.2 contain references to lots which are not shown on the strata plan, or the management statement in relation to future developments. There is therefore no authority to make by‑laws relating to those lots except in accordance with reg 37 as observed above under the heading "Plot ratios and open space requirements". I consider that this deficiency can be cured in respect of By‑law 42.3 and By‑law 42.4.2 by simply deleting the reference respectively to Lot 72 and Lot 71. In relation to By‑law 42.2 severance is not possible because deletion of the lot number will leave uncertain where it is provided that proprietors may decide that the strata company shall construct and operate an entry barrier system. I accordingly find that Bylaw 42.2 is invalid.
By‑law 42.3 is also criticised by the applicant to the extent that the bylaw "requires a proprietor to provide a key to buildings on the lot (rather than merely enabling the strata company to establish a repository for a key if a proprietor so wishes)". The submission is not developed any further.
The by‑law provides that the strata company may enter into other security arrangements for the protection of proprietors and property which it is stated may include the keeping of keys for residences in a central location, accessible to both the estate manager and a member of council, for access in the event of fire, checking for damage or entry, or such other matters as the proprietor may request. On the face of it, the by‑law is intended to address safety and security within a partial development, which when fully developed may still result in dwellings being relatively remote from each other and there is accordingly good understandable reasons why a by‑law of this nature can be seen as being for the benefit of all proprietors and incidental to the management, control, use and enjoyment of the lots. I therefore consider that the by‑law is valid.
By‑law 42.4 is further criticised on the basis that it is submitted that the first and second sentences in By‑law 42.4.1 conflict, in that the first sentence requires permission for the use of firearms and the second permits the firearms license holder to deal with immediate threats to life, stock, crop or property from straying stock, native or feral animals.
I consider that the proper construction of the by‑law permits the two sentences to operate in a consistent manner. Firstly, there is an overall prohibition on the use of firearms without the prior permission of the estate manager or the chairman of the council. If prior permission has been given, the firearm may be used in the stipulated circumstances.
It is then further submitted that the references to the estate manager in By‑law 42.4 renders the by‑law meaningless. For reasons already given, I do not consider that to be the case, because the identity of the estate manager can be established from the management statement.
For the above reasons I do not consider that By‑law 42.4 is invalid, subject to the severance of the reference in By‑law 42.4.2, to Lot 71.

Profits or losses from business or trading activities

By‑law 43.1 provides that should loss occur the council may resolve either to add the amount of the loss to the next levy or make suitable financial arrangements to spread the payment over time.
The applicant contends that such a provision is not a proper exercise of the strata company's function and that to ensure equity between present and future proprietors, any loss should be brought into account and paid as soon as possible consistent with s 36 of the Act. The respondent contends that the by‑law is within the power accorded by s 37(1)(c) which enables a strata company to borrow money as required by it in the performance of its functions. I accept this submission, but I do not accept that the Council may act in the manner contemplated by the by‑law. If a loss is incurred and there are funds available to pay it, the expenditure should be brought immediately into account unless a budget is approved to raise funds which incorporate the cost of borrowings to enable expenditure to be met from that source. For the Council to have the right to make these arrangements without approval under the budgetary process, or under the mechanisms available under s 47, would result in the incurring of unauthorised expenditure. I accordingly find that this by‑law is invalid.
By‑law 43.4 provides that the council shall ensure that no more than half of the surplus may be used under By‑law 43.3.2 until sufficient funds are set aside to at least meet predicted maintenance and management costs for both the current year and the following financial year. The strata company is required to disburse surpluses either as authorised by By‑law 43.3.1, which it is not necessary to detail, or pursuant to By‑law 43.3.2 which permits the accumulation of funds for, or payment for, the enhancement of the common land facilities and/or infrastructure.
The applicant contends that By‑law 43.4 purports to restrict the manner by which the Council may deal with surplus funds but does not empower the Council to exercise the functions described in s 36(1)(a), s 36(1)(b), s 36(1)(c) and s 36(2). The notified persons represented by Mr McIntyre contend otherwise and say that the by‑law regulates the manner in which the council may exercise the powers which it has pursuant to s 44 to perform the functions under s 36 to which reference has been made. I agree with this submission and do not consider the by‑law to be invalid.

Dispute resolution processes

By‑law 44 contains a dispute resolution mechanism. It is convoluted, and unwieldy but in effect provides for the appointment of a panel of three mediators drawn from members of the strata company. It is intended to work promptly with the panel meeting within four days of its formation to conduct a hearing. Within one week of the hearing, it is intended that a proposed resolution be provided "as a proposal for mediation or an arbitration". If the resolution of the panel is unacceptable to either party, that party can request that the matter be referred to an external consultant at the expense of that party. The consultant is to be selected by the mediation panel as being suitably experienced in the area under dispute and the strata company is to arrange his engagement. The consultant is to have the same powers as the panel and is to make a recommendation which shall be binding on all parties unless one or more parties wish to take the matter to the Referee as provided in the Act. As the functions of the Referee have been taken over by this Tribunal, that provision should be construed as a reference to the Tribunal.
If the by‑law were to be considered unworkable I would accept that the by‑law is then one which would not have been made having regard to the interests of all the proprietors in the use and enjoyment of their lots and there would be power to declare it invalid. However, apart from the reference to the words "as a proposal for mediation or an arbitration" I consider that the by‑law is capable of being construed in a workable manner.
The applicant also contends that the by‑law is invalid insofar as it seeks to bind "licence holders". The preamble to the by‑law provides that the parties that may be involved in the procedure includes proprietors, activity licence holders, council, and any committee of the strata company. I accept that the bylaws may not bind persons other than those referred to in s 42(6).
Subject therefore to the severance of the words "activity licence holders" and "as a proposal for mediation or an arbitration" I consider that the by‑law is valid.

Does the management statement fall as a whole?

It is necessary to consider, whether, in the light of the various bylaws, or parts thereof, which have to be struck down, they are in substance so connected with the remaining by‑laws as to form an indivisible whole which cannot be taken to pieces without altering its nature.
I do not consider that the severance of the by‑laws made under Notification H918130 creates any difficulty for the continued existence of the management statement, because it existed and was acceptable to the parties prior to the purported amendment.
In relation to the various by‑laws and parts thereof contained in the management statement which have been identified above as being invalid, I do not consider that the vast majority of them are of any significance and could not be severed. The striking down of By‑law 37 has implications for the proposed resubdivision of Lot 25. But the difficulty caused thereby is not insurmountable. It may have implications in relation to the basis upon which levies are supposed to have been paid under the existing by‑law. But no levies have been payable in respect of Lot 25, and if there is a lack of cooperation so as to do all things necessary to follow the original intended course, it would be open to those concerned to move a resolution for the amendment of Bylaw 19 so as to ensure that levies are based on unit entitlements of all existing lots, and if necessary, to commence appropriate proceedings to achieve that result.
There will be changes required in the way in which the committees have operated, but that is not likely to make any significant difference in the operation of the scheme.
Taking into account all of the affected by‑laws, I consider that the test for severability outlined above is satisfied so that the management statement can stand subject to severance of the invalid portions.

Orders

For the above reasons, the Tribunal will make orders declaring invalid whole by‑laws or the portions thereof which are invalid. Subject to severance of the offending portions, the balance of the by‑laws contained in the management statement are valid.
An order will be made requiring the applicant to lodge a copy of the Tribunal's order with the Registrar of Titles. Orders will be made amending the application to show that reliance is placed upon s 97 of the ST Act for the relief claimed and dismissing the respondent's strike out application.
Section 104 of the ST Act requires that a copy of the Tribunal's order and the reasons for decision be served upon various identified persons, including any person who was entitled to make and made a written submission to the Tribunal, which means, in effect, a person notified under s 97 who has made a submission. The Tribunal will provide the legal representatives of the parties and of the notified persons who were represented at the hearing with a copy of these reasons for decision and the Tribunal's order, but in accordance with s 75(2) of the SAT Act, will order the respondent to serve a copy thereof on the remaining notified persons who made submissions as identified in the order.
The Tribunal accordingly orders as follows:
A.The application is amended to include under the sections of the Strata Titles Act 1985 (WA) relied upon for the orders sought, reference to Section 97.
B.The application by the respondent to strike out the proceedings is dismissed.
C.It is declared that the variations to the by‑laws contained in the Notification of Change of By‑laws registered as Dealing No H918130 are invalid.
D.It is declared that the by‑laws set out in the management statement registered as Dealing No G966274 are invalid either to the extent of the whole by‑law, or to the extent of inclusion of the words, set out below:

Schedule 1 by‑laws

1.By‑law 17 – the whole by‑law;
2.By‑law 19 – "and with the written permission of the original proprietor";
3.By‑law 20 – "under the instruction of the Strata Company";

Schedule 2 by‑laws

4.By‑law 5 – "licensee";
5.By‑law 7 – "licensee";
6.By‑law 9.1 – "licensee";
7.By‑law 9.2 – the whole by‑law;
8.By‑law 9.7 – "shall be through the Strata Company, and";
9.By‑law 15.4 – "The Strata Company may arrange the trapping of animals abroad at night. Any animal so trapped shall be returned once only and thereafter the Strata Company may arrange that it be removed.";
10.By‑law 16.5 – the whole by‑law;
11.By‑law 26.1 – "administer and approve structures and landscaping for proprietors, licensees and the Strata Company, and";
12.By‑law 26.2 – "have the full delegated authority of the Council to approve buildings, to decide in which forms applications shall be made, and to";
13.By‑law 26.5 – the whole by‑law;
14.By‑law 27 – the whole by‑law;
15.By‑law 28.4 – the whole by‑law;
16.By‑law 28.5 – the whole by‑law;
17.By‑law 29.4 – ", 49 55";
18.By‑law 32.1 – the whole by‑law;
19.By‑law 32.2 – the whole by‑law;
20.By‑law 35.11 – the whole by‑law;
21.By‑law 35.12 – the whole by‑law;
22.By‑law 35.13 – the whole by‑law;
23.By‑law 35.14 – the whole by‑law;
24.By‑law 35.15 – the whole by‑law;
25.By‑law 36.1 – the whole by‑law;
26.By‑law 37 – the whole by‑law;
27.By‑law 41.6 – the whole by‑law;
28.By‑law 42.2 – the whole by‑law;
29.By‑law 42.3 – "Lot 72";
30.By‑law 42.4.2 – "Lot 71"';
31.By‑law 43.1 – the whole by‑law;
32.By‑law 44 – "activity licence holders" and "as a proposal for mediation or an arbitration".

E.Within 28 days of the date of this order, the applicant is to lodge a copy of this order with the Registrar of Titles pursuant to s 115 of the Strata Titles Act 1985 (WA).
F.The respondent is forthwith to serve a copy of the Tribunal's reasons for decision dated 22 June 2006 together with this order on the persons notified by the respondent of these proceedings and who made submissions (other than those who were represented by legal practitioners), being Jan Irvine, Richard M Rowell, Rowell Consulting Services Pty Ltd, Ken Maley, Malyn Maley and Paul Meleng.

I certify that this and the preceding [194] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR C RAYMOND, SENIOR MEMBER