Griggs v Strata Corporation No. 132308 Stage Door Apartments Hobart
[2002] TASSC 114
•12 December 2002
[2002] TASSC 114
CITATION:Griggs v Strata Corporation No. 132308 Stage Door Apartments Hobart [2002] TASSC 114
PARTIES: GRIGGS, Phillip John
v
STRATA CORPORATION NO. 132308
STAGE DOOR APARTMENTS HOBART
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: M295/2002
DELIVERED ON: 12 December 2002
DELIVERED AT: Hobart
HEARING DATES: 9 December 2002
JUDGMENT OF: Blow J
CATCHWORDS:
Real Property - Strata and related titles and occupancy - Body corporate - Other cases - Recovery of unpaid levy contributions - Set-off of insurance premiums paid by owner.
Strata Titles Act 1998 (Tas), s103.
Aust Dig Real Property [451]
REPRESENTATION:
Counsel:
Applicant: In Person
Respondent: Not Represented
Judgment Number: [2002] TASSC 114
Number of Paragraphs: 9
Serial No 114/2002
File No M295/2002
PHILLIP JOHN GRIGGS v STRATA CORPORATION NO. 132308
STAGE DOOR APARTMENTS HOBART
REASONS FOR JUDGMENT BLOW J
12 December 2002
This is an appeal pursuant to the Resource Management and Planning Appeal Tribunal Act 1993, s25(1). It arises out of a dispute as to whether the appellant is liable to pay contributions levied by a body corporate under the Strata Titles Act 1998, s83. The appellant is the registered proprietor of Lot 12 on Strata Plan 132308. He is the developer on whose behalf the strata plan was lodged for registration. It is the first of a series of strata plans in respect of a staged development scheme under the Strata Titles Act, Pt3. Apparently the staged development scheme provides for four new lots to be created from parts of the land presently comprising Lot 12, and for the balance of Lot 12 to cease to be part of any lot, and thus to become common property by virtue of s9(1)(a). The body corporate levied contributions in respect of Lot 12 amounting to $2,000 per annum for each of the financial years 2000/01 and 2001/02. The appellant has paid certain insurance premiums totalling $10,365.64, and claims to be entitled to set them off against the sums levied by the body corporate, with the result that his debt to the body corporate would be extinguished. The body corporate concedes that the appellant is entitled to set off two premiums totalling $1,879, but contends that he is not entitled to set off any other premiums, and that it is entitled to recover from him the balance of $2,121 plus interest.
Initially the body corporate applied to the Recorder of Titles pursuant to the Strata Titles Act, s105, seeking an order that the appellant pay $4,000 plus interest. The Recorder made such an order pursuant to the Strata Titles Act, s113(1)(a). The appellant appealed to the Resource Management and Planning Appeal Tribunal. Apparently the body corporate made its concession as to the premiums totalling $1,879 in the course of the Tribunal's pre-hearing procedures. The Tribunal held that the appellant was not entitled to set off any other amounts, set aside the Recorder's order, and substituted an order for the payment of $2,121 plus interest. The appellant contends that the Tribunal erred in law. He represented himself at the hearing of this appeal. The body corporate was not legally represented. A corporation is not permitted to be represented before this Court by an agent who is not a legal practitioner: Co-operative Property Developments of Australia Ltd v Mount [1980] Tas R 7. The chairman and the secretary of the body corporate attended the hearing. In the circumstances, I took the unusual course of allowing them to make submissions, as individuals whose interests could be indirectly affected by the result of the proceedings.
The right of the owner of a lot in a strata plan to set off insurance premiums paid by that owner against the owner's liabilities to the body corporate is conferred by the Strata Titles Act, s103, which reads as follows:
"103 ¾ (1) If a body corporate is in breach of its obligation to take out and maintain insurance, the owner of any lot may take out and maintain the required insurance.
(2) The insurance may be taken out in the name of the body corporate or in the owner's name.
(3) The costs incurred by an owner under this section may be recovered from the body corporate as a debt (and may be set off against any liabilities of the owner to the body corporate)."
The obligations of a body corporate to take out and maintain insurance are conferred by ss99 and 101, which include the following:
"99 ¾ (1) The body corporate for a strata scheme must insure ¾
(a)the buildings and other improvements (if any) on the common property; and
(b)any building divided by the plan.
Penalty:
Fine not exceeding 50 penalty units.
(2) The policy of insurance ¾
(a) must cover ¾
(i)damage from fire, storm, tempest, explosion or other prescribed risks; and
(ii)costs incidental to the reinstatement or replacement of the buildings, including the cost of removing debris and the fees of architects and other professional advisers; and
(b)must provide for the reinstatement of the buildings and improvements to their condition when new."
"101 ¾ (1) A body corporate must maintain public risk insurance (covering accidental death, personal injury and property damage) over the common property for an amount at least equal to a minimum prescribed by regulation.
(2) If a body corporate is required by law to have insurance of a particular kind, the body corporate must take out, and maintain, the necessary policies of insurance.
(3) A body corporate may insure against ¾
(a)loss from dishonesty, negligence or other wrongful conduct; or
(b)other risks."
The following definition appears in the Strata Titles Act, s3:
"'common property' for a strata or community scheme means ¾
(a) all land within the scheme that is not within the boundaries of a lot; and
(b) all other property administered by the body corporate for the relevant scheme ¾
but does not include land designated for future development in the master plan for a staged development scheme or a community development scheme".
The premiums paid by the appellant that remain the subject of dispute were paid for a "material damage" policy and a public liability policy in respect of the financial years 1999/2000, 2000/01 and 2001/02. The basis upon which the Tribunal ruled in favour of the body corporate appears from the following paragraphs in its decision:
"16The obligation placed upon the Body Corporate of the Corporation by section 99 is first to insure buildings and other improvements on the common property. The 'common property' is defined by section 3 of the Act as:
'"Common Property" For a Strata or Community Scheme means -
(a)All land within the Scheme that is not within the boundaries of a lot; and
(b)all other property administered by the Body Corporate for the relevant Scheme - …'
17Upon the facts as found above, there is no 'common property' presently in existence under the Stratum Scheme. The land in Lot 12 which will ultimately become common property, and which is used in a manner consistent with common property by the unit holders other than the appellant, will not become common property until some time in the future, presumably upon completion of development of the land and buildings in the Strata Scheme. It follows that there is no present obligation upon the Body Corporate of the Corporation to take out insurance with respect to any common property.
18The other aspect of the obligation imposed by section 99 of the Act upon the Body Corporate is that it must insure 'any building divided by the plan'. Here the payments designated by the appellant as 'property insurance (units)', that is $835 for the year 1999/2000, and $1044.00 for the year 2000/2001, were payments in respect of the units, which are properly described as 'any building divided by the plan' and therefore insurance which the Body Corporate had an obligation to effect.
19The requirement under section 101 of the Act that the Body Corporate to maintain public risk insurance over the common property, did not apply because as previously noted, there was no common property as defined under the Act, so as to bring that obligation into effect."
It appears from par17 of the Tribunal's decision that some of the land in Lot 12 is required by the staged development scheme ultimately to become common property, and is already being used by the owners of other lots as if it were common property. As the definition of "common property" includes, by virtue of par(b) thereof, "all other property administered by the body corporate", I think the Tribunal should have considered whether any parts of Lot 12 were being administered by the body corporate during the periods for which the appellant arranged public liability cover, or during any part thereof. If so, I think the parts of Lot 12 being administered by the body corporate would fall within par(b) of the definition of "common property", and the appellant would be entitled to a set-off if the insurance effected by him was the same insurance that the body corporate had an obligation to take out and maintain. It seems clear that the body corporate was not administering any part of Lot 12 prior to 30 June 2000, since it had not held its first meeting by then. However the public liability premiums for 2000/01 and 2001/02 would be sufficient to extinguish the body corporate's claim if the appellant is entitled to set them off against it.
The appellant submitted that he should not have to bear any insurance expenses in respect of areas that are intended to become common property pursuant to the staged development scheme. Perhaps that result could and should have been achieved. However the body corporate did not hold its first meeting within three months after its formation, ie, on or before 30 September 1999, as required by the Strata Titles Act, s75(1). It did not meet until more than a year after that date. In the situation that has arisen, the appellant's rights in relation to insurance premiums have to be determined in accordance with the provisions of the Strata Titles Act. Any expenditure on insurance in respect of areas intended to become common property may be set off against the appellant's levy contributions only if it related to the building, the common property, or the risks referred to in s101(3). Because of the wording of the definition of "common property", and the fact that the intended common property forms part of Lot 12, there was no common property unless and until some part or parts of Lot 12 commenced to be administered by the body corporate. I must therefore reject the appellant's submission that he should not have to bear any insurance expenses relating to the areas that are intended to become common property pursuant to the staged development scheme. However this appeal must still succeed, on the narrow basis that the Tribunal erred in failing to consider whether any parts of Lot 12 had become common property as a result of the body corporate commencing to administer them.
For these reasons I order that the decision of the Resource Management and Planning Appeal Tribunal be set aside and that the matter be remitted to it for reconsideration in accordance with a direction that it must consider whether at any relevant time any part of Lot 12 in Strata Plan 132308 was being administered by the body corporate for that strata plan. I see no reason why the Tribunal should be differently constituted when it reconsiders the matter.
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