HAPGOOD-STRICKLAND and THE OWNERS OF 119 DOVERIDGE DRIVE DUNCRAIG (STRATA SCHEME 12286)
[2024] WASAT 65
•5 JULY 2024
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: STRATA TITLES ACT 1985 (WA)
CITATION: HAPGOOD-STRICKLAND and THE OWNERS OF 119 DOVERIDGE DRIVE DUNCRAIG (STRATA SCHEME 12286) [2024] WASAT 65
MEMBER: JUDGE H JACKSON, DEPUTY PRESIDENT
MS N OLDFIELD, MEMBER
HEARD: 29 APRIL 2024
DELIVERED : 5 JULY 2024
PUBLISHED : 5 JULY 2024
FILE NO/S: CC 972 of 2023
BETWEEN: KERRY-LEIGH HAPGOOD-STRICKLAND
First Applicant
RONALD SHAUN HAPGOOD-STRICKLAND
Second Applicant
AND
THE OWNERS OF 119 DOVERIDGE DRIVE DUNCRAIG (STRATA SCHEME 12286)
First Respondent
SUSAN WATSON
Second Respondent
Catchwords:
Strata Titles Act 1985 (WA) – Two lot strata scheme – Exceedingly poor relationship between lot owners – Long history of discord and dispute – Proposed conversion of strata scheme to a survey-strata scheme – Need for unanimous resolution – Failure to obtain unanimity – Role of Tribunal – Scope of discretion – Application granted
Legislation:
State Administrative Tribunal Act 2004 (WA)
Strata Titles (General) Regulations 2019 (WA), reg 55(3)
Strata Titles Act 1985 (WA), Sch 2A, s 197(1), s 197(4), s 200(1), s 200(2), s 202, s 203
Result:
Strata company is taken to have unanimously passed resolutions for the conversion of strata scheme to survey-strata scheme
Category: B
Representation:
Counsel:
| First Applicant | : | In Person |
| Second Applicant | : | In Person |
| First Respondent | : | No Appearance |
| Second Respondent | : | In Person (by phone) |
Solicitors:
| First Applicant | : | N/A |
| Second Applicant | : | N/A |
| First Respondent | : | N/A |
| Second Respondent | : | N/A |
Case(s) referred to in decision(s):
Ainsworth v Albrecht [2016] HCA 40; (2016) 261 CLR 167
Arasi & Anor and The Owners of Beverley Court [2005] WASAT 197
Bendall-Harris v Aitken [2008] WADC 112
Efficient Building Team Pty Ltd and The Owners of 25, 27, 29, 31 Parry Street Fremantle Strata Plan 6413 [2021] WASAT 158
McHattie v Tuscan Investments Pty Ltd (1997) 18 SR (WA) 231
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24
The Owners of Ellement 996 Strata Plan 53042 and Tobias [2022] WASAT 49
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
This matter concerns a two-lot strata scheme. The applicants and second respondent own Lot 2 and Lot 1 respectively. The first respondent, the strata company of the scheme, did not take an active part in the proceedings.
On 16 November 2022, the applicants forwarded a proposal to the first respondent to convert the strata scheme into a survey-strata scheme, but unanimous approval was not achieved because the second respondent declined to vote. On 4 July 2023, the applicants sought orders of the Tribunal to enable the conversion to proceed.
For the reasons which follow, we have determined to grant the application, and make orders by which the strata company will be taken to have unanimously passed resolutions necessary for the conversion to proceed.
Statutory Context
The following is taken from the decision of Bowden DCJ in Bendall‑Harris.[1] It represents a neat and pithy summary of the statutory history to that stage (i.e. August 2008), which assists in understanding the current statutory regime:
[1] Bendall-Harris v Aitken [2008] WADC 112 (Bendall-Harris) at [10] – [14].
… Pursuant to [the Strata Titles Act 1966], strata lot boundaries could only be created within a building and there were no provision for the inclusion of land outside a building into a strata lot or for the creation of survey‑strata schemes. The land outside a building became common property.
Subsequent amendments, in 1985, to the 1966 Act enabled a strata lot to be converted to a survey‑strata scheme. The effect of such conversion was that a Survey-strata scheme allowed lots to be created including land both outside and inside buildings thus allowing for the abolition of common property. The Act provides in Div 3 a scheme for the conversion of strata schemes to survey‑strata schemes. This only applies to single tier strata schemes registered before 1 January 1998. A single tier strata scheme is defined in the Act as a strata scheme in which no Lot or part of a Lot is above or below another Lot. The mechanism by which a single tier strata scheme can be converted to a survey‑strata scheme is provided by s 31C of the Act.
Section 31C provides that:
"A strata company for a strata scheme may by unanimous resolution in the prescribed form resolve that the scheme be converted to a survey‑strata scheme."
If a unanimous resolution in respect of a two Lot scheme is not obtained a proprietor may apply to the District Court for an order declaring that a resolution specified in the order is deemed to have been duly passed by the strata company as a unanimous resolution (51A(1a)(b),(2)) and on such application the District Court may make an order if it is satisfied that a proprietor has acted unreasonably in refusing to agree to the resolution or that it is in the best interests of the proprietors that the order be made (51A(3)).
Clearly the court's jurisdiction is confined to a consideration of the resolution which failed to obtain unanimous agreement, it is that resolution which was considered by the extraordinary general meeting, it is a failure to obtain a unanimous vote on that resolution which enlivens the courts jurisdiction and is that resolution that the court may deem duly passed.
In 2018, further amendments to the Strata Titles Act 1985 (WA) (ST Act)[2] included the relocation of the relevant provisions of Division 3, referred to above, into Schedule 2A of that Act.
[2] Strata Titles Amendment Act 2018 (WA), No 30 of 2018.
Division 2 of Pt 4 of Schedule 2A provides a process by which a single tier strata scheme[3] registered before 1 January 1988 may be converted to a survey-strata scheme.[4] Clause 31C(1) of Schedule 2A (formerly s 31C(1), quoted above) requires that a resolution for conversion is to be by unanimous resolution, being one where every lot casts a vote in favour.[5]
[3] Cl 3 of Schedule 2A defines single tier strata scheme as meaning a strata scheme: (a) in which no lot or part of a lot is above or below another lot; or (b) that would come within paragraph (a) except for any lot that has a permitted boundary deviation.
[4] ST Act Sch 2A cl 31A.
[5] ST Act ss 3 and 123(1).
In this way, Schedule 2A of the ST Act creates an exception to the usual processes, whereby conversion into a survey-strata scheme would otherwise necessitate the termination of the strata scheme before the creation of a new survey-strata scheme.
In addition to relocating the relevant provisions of Division 3 into Schedule 2A, the 2018 amendments to the ST Act made changes to the Tribunal's relevant jurisdiction so that, while previously there were considerable limits to both the manner in which a dispute may come to the Tribunal and to the manner by which the Tribunal may dispose of such disputes (as described above in the passage from Bendall-Harris), there is now very considerable breadth in both respects.
Section 197(1) provides that Pt 13 of the ST Act 'provides for resolution by the Tribunal' of certain types of disputes, which it defines as 'scheme disputes'. Each type of 'scheme dispute' is described in broad terms. Relevantly, they include:
(a)a dispute between 'scheme participants' about 'a resolution or decision of a strata company';[6]
(b)a dispute between 'scheme participants' about 'any other matter arising' under the ST Act;[7] and
(c)'a dispute between an applicant for the…amendment of a strata titles scheme and a person whose consent to the application is required, or who may object to the application, relating to the consent or objection'.[8]
[6] ST Act s 197(1)(a)(iv).
[7] ST Act s 197(1)(a)(vi).
[8] ST Act s 197(1)(b).
'Scheme participants' include the strata company for the relevant strata titles scheme and members of the relevant strata titles scheme.[9] The members of a strata titles scheme are the owners of the lots in the scheme.[10]
[9] ST Act s 197(2)(a) and s197(2)(d).
[10] ST Act s 3 and s 14(8).
Section 197(4) provides that 'an application for resolution of a scheme dispute can be made to the Tribunal by a party to the dispute'.
Section 200(1) provides that the Tribunal may make any order it considers appropriate to resolve the scheme dispute or proceeding.[11] Without limiting the breadth of that power, s 200(2) provides an inclusive list of orders including:
(a)an order requiring a scheme document to be amended in a specified manner, including an amendment which effects a subdivision;[12] and
(b)an order that a strata company be taken to have passed or not passed a specified resolution, including a unanimous resolution.[13]
[11] ST Act s 200(1).
[12] ST Act s 200(2)(a) but note the limitations in s 200(6).
[13] ST Act s 200(2)(n).
Instead of or in addition to any order, the Tribunal may make declarations.[14] The Tribunal may also decline to make an order or declaration.[15]
[14] ST Act s 199.
[15] ST Act s 202.
Finally, s 203 of the ST Act provides that certain orders may only be made by a judicial member or by a panel inclusive of a judicial member. Such orders include those which 'affect a title to land', which includes the present situation.
Relevant Procedural History and Evidence
By letter dated 16 November 2022 the applicants caused to be sent to the second respondent a notice of proposed resolution by the strata company 'outside of a general meeting' for the conversion of the strata scheme into a survey-strata scheme.[16] The notice of proposed resolution was dated 12 November 2022.
[16] Hearing Book (HB), pages 22 – 24; Notice of Proposed Resolutions, dated 16 November 2022 and filed 24 November 2023 (Notice of Proposed Resolutions), pages 1 – 3.
The notice of proposed resolution was accompanied by a proposed survey-strata plan, proposed schedule of unit entitlements, proposed notice of resolution, proposed consent by the parties' mortgagees, proposed disposition statement, proposed owners' statement of support of the conversion, capital value assessment report and site value and unit entitlement report.[17]
[17] HB pages 25 – 89; Notice of Proposed Resolutions, pages 4 – 68.
Voting information enclosed with the letter provided that voting was to be by email to a specified email address. Voting opened on 25 November 2022 and closed on 23 December 2022.
The applicants voted in favour of the proposed resolution.[18] The second respondent did not cast a vote.[19]
[18] HB pages 245 – 247; Form of Proxy for Proposed Resolutions Outside of a General Meeting and Voting Slip, dated 25 November 2022 and filed 8 February 2024.
[19] HB pages 17 and 230; Grounds in Support of the Application, dated and filed 4 July 2023 (Grounds), at para 20; Witness Statement of Kerry-Leigh Hapgood-Strickland and Ronald Shaun Hapgood-Strickland, dated and filed 8 February 2024 (Applicants' Witness Statement) at para 38.
This was not the first proposal to convert the scheme to survey-strata. In the past, both parties had proposed conversion but without reaching agreement on how to do so.[20]
[20] HB pages 227 – 230; Applicants' Witness Statement at paras 11-30; ts 9, 13 – 14, 22 – 23, 25, 49 – 50 and 55, 29 April 2024.
In light of the failure of the second respondent to cast a vote and the consequential failure of the motion to pass unanimously, the applicants lodged an application with the Tribunal on 4 July 2023 pursuant to s 197(4) of the ST Act.[21]
[21] We note the significant time that passed between the failure of the resolution and the application to the Tribunal. As the application is not in the Tribunal's review jurisdiction, there is no deadline by which an application must be made (cf r 9 of the State Administrative Tribunal Rules 2004). But the delay may, nonetheless, be relevant. The second respondent, however, took no issue with the delay and we have not, therefore, considered the issue any further.
The Tribunal made programming orders though to a final hearing on 29 April 2024. In the course of the final hearing each of the applicants and second respondent gave oral evidence. No other witnesses were called.
The parties put before the Tribunal the following documents, each of which we have considered in reaching our decision:
(a)The applicants' application, to which was attached Strata Plan 12286, copies of the applicants' and the respondent's Certificate of Title, a statement of the orders sought and the applicants' grounds for making the application;[22]
[22] HB, pages 1 – 20.
(b)A bundle of documents lodged by the applicants which comprised a letter from the applicants' then solicitor to the second respondent dated 16 November 2022 attaching various documents relating to the applicants' proposed notice of resolution regarding a conversion from strata to survey-strata;[23]
[23] HB pages 21 – 127.
(c)The applicants' proxy form and voting slip in relation to the proposal to convert the strata scheme;
(d)A document entitled 'Further Submissions in Support of Application' lodged by the applicants on 25 January 2024;[24]
[24] HB pages 128 – 225.
(e)A joint witness statement of the applicants filed on 8 February 2024;[25]
(f)The proxy form and voting slip of the applicants lodged by the applicants on 8 February 2024;[26]
(g)A letter from the second respondent to the Tribunal dated 17 August 2023;[27]
(h)A bundle of photographs lodged by the second respondent on 27 March 2024;[28]
(i)A facsimile from the second respondent to the Tribunal lodged on 10 April 2024;[29] and
(j)Letters from medical professionals filed by the second respondent on 8 August 2023 and 2 February 2024.[30]
[25] HB pages 226 – 244.
[26] HB pages 245 – 247.
[27] HB page 254.
[28] HB pages 256 – 274.
[29] HB pages 275 – 276.
[30] HB pages 277 and 279.
Submissions of the Parties
The applicants submit that the following benefits will accrue to both lot owners should their proposed conversion of the strata plan to survey‑strata plan proceed:[31]
(a)an increase in the capital value of each lot;
(b)the removal of common property which would eliminate the need for the parties to engage with each other regarding the use and maintenance of the common property;
(c)the ability of each party to undertake projects and alterations (to current common property) without the need to obtain the approval of the other (save in limited circumstances);
(d)the formalisation of longstanding informal arrangements (noting that only one 'formal' meeting of the current owners has occurred in seven years) regarding existing fences and improvements made to the common property; and
(e)the consequential removal of the source of most, if not all, of the basis for dispute and disagreement between the parties, and thus reducing the likelihood of further legal proceedings.
[31] HB pages 17 – 20; Grounds at paras 22 – 43.
The second respondent filed no written material outlining her concerns or objections. At the hearing she stated that she objected to the applicants' proposal for the following reasons:
(a)the history of the parties' interactions had created a lack of trust;[32]
(b)she would possess less power to control or object to any changes to what is now common property, in particular to the front area between the two driveways;[33] and
(c)she did not believe the conversion to survey-strata would resolve the issues between the parties, at least in part because the buildings would remain attached by a common wall and common pillar both of which are located between the carports and the roof which extends as one over both buildings and carports.[34]
[32] ts 33, 29 April 2024.
[33] ts 33 & 35, 29 April 2024.
[34] ts 29, 35 and 55, 29 April 2024.
It is relevant to note that the second respondent stated she had not looked at the applicants' proposal for the conversion of the strata scheme to survey-strata due to the level of anxiety and distress occasioned by the ongoing conflict between the parties.[35] We therefore understand that her objections were based on her understanding of the general implications of a conversion and her reaction to specific details of the proposed survey-strata plan discussed in the final hearing.
[35] ts 35 – 37, 29 April 2024.
Material Facts
Based on the evidence as described above, we make the following findings of fact. Unless indicated, these facts were not contentious.
Strata Plan 12286 was registered on 9 October 1984. It is a duplex style, single tier strata scheme, comprising two residences which are defined on the strata plan as Lots 1 and 2.[36] All that which is external to the residences, including the car ports, is currently defined as common property.[37] There are no walls common to Lots 1 and 2. There is a common wall between the carports which adjoin each lot. The strata scheme is situated on the corner of two streets, with each lot having access to one street.[38]
[36] HB pages 4 – 8; Strata Plan 12286 (Attachment to the Application dated 4 July 2023).
[37] It was not alleged that, and there was no evidence of, the passing of a notice of resolution under s 21H or the lodging of an objection under s 21O and thus pursuant to s 21M the boundaries of the lots were deemed to be the external surfaces of the relevant buildings, save for common or party walls – Strata Titles Act 1985 (WA) later amended or repealed by the Strata Titles Amendment Act 2018 (WA).
[38] HB pages 51, 57 – 58, 62 – 63; Notice of Proposed Resolutions, pages 30, 36 – 37, 41 –42.
The second respondent is the registered proprietor of Lot 1. The applicants are the registered joint proprietors of Lot 2.[39]
[39] HB pages 9 – 10; Record of Certificate of Title Number 1/SP12286, filed 4 July 2023 and Record of Certificate of Title Number 2/SP12286, filed 4 July 2023.
There has been affixed to the common property fencing and other improvements including patios and paving, effectively creating front and rear areas enjoyed by each lot to the exclusion of the other lot.[40] We have not been taken to any by-laws or strata company resolutions authorising the owners' use of common property in this fashion.
[40] HB pages 57, 62 – 63, 138 and 140; Notice of Proposed Resolutions, pages 36 and 41 – 42; Bundle of Documents titled 'Further Submissions in Support of Application', filed 25 January 2024 (Applicants' Bundle of Documents), pages 10 and 12.
However, that part of the common property located between the driveways for each lot (effectively 'behind' the junction of the two streets) is not the subject of any informal exclusive use arrangements and the activities of each lot owner in relation to that part of the common property appears to have been the cause of several disputes between the parties.[41]
[41] ts 6, 16 – 17, 19-20, 25, 27, 29 April 2024.
The relationship between the applicants and second respondent is exceedingly poor. There have been various legal proceedings between them regarding the common property and/or management of the strata complex. Police and representatives of the local council have been called on various occasions.[42] Between 2019 and 2022 each party had misconduct restraining orders against the other and a misconduct restraining order remains in place against the second respondent until at least 12 July 2024.[43]
[42] ts 6, 22 and 55, 29 April 2024; HB pages 19, 48, 131, 220 and 222; Grounds at para 38; Notice of Proposed Resolutions, page 27 at para 31; Applicants' Bundle of Documents, pages 3, 92 and 94.
[43] ts 6, 29 April 2024; HB pages 17, 19, 47 – 49 and 222; Grounds at paras 15, 39 and 40; Notice of Proposed Resolutions, pages 26 – 28; Applicants' Bundle of Documents, page 94.
The relationship between the applicants and second respondent is such that the strata company cannot operate effectively or at all. One consequence of that situation is that even necessary repairs have not been carried out.[44]
[44] ts 7, 12 and 16, 29 April 2024; HB pages 256 and 260; Bundle of Photos filed by second respondent on 27 March 2024, pages 1 and 5.
The proposed survey-strata plan will, if given effect, divide the total land into two lots of 522 m2 (Lot 2) and 525 m2 (Lot 1).
The proposed lot boundaries will follow the existing fence line at the rear of the property that (informally) divides the 'back yard' into two portions. It then follows the alignment of the two portions of the carport including the bisection of a short portion of wall and a pillar that provides mutual support. The proposed boundary will then run to the west of the driveway associated with Lot 1 resulting in the majority of the corner portion of the common property (i.e. that which is located 'between' the two streets) forming part of Lot 2.
The conversion of the strata scheme to a survey-strata scheme would materially increase the capital value of each Lot. That is the opinion expressed by Mr Matthew Garmony in a report dated 25 January 2022 (referred to at para's 16 and 22(b) above). He was not called to give evidence as the second respondent did not require him to do so. He is a licensed valuer and we have no reason to doubt his evidence, which we accept. In his opinion, as at the date of assessment of 3 December 2021, the conversion would have increased the value of Lot 1 from $525,000 to $595,000 and of Lot 2 from $510,000 to $580,000.
Consideration
Jurisdiction of the Tribunal
We are satisfied, and we find, that the parties are 'scheme participants' and this proceeding relates to a 'scheme dispute'. Indeed, the dispute satisfies, in our view, each of the three types of 'scheme dispute' described in para 9 above.
In that latter regard, we are satisfied that the applicants have satisfied the necessary procedural steps to generate a 'scheme dispute'.
In particular, we find that the 'scheme dispute' is one in which the applicants sought, but failed to achieve, unanimous support for their resolution of the strata company to convert the strata scheme to a survey-strata scheme.
By cl 31C(1) of Schedule 2A of the ST Act, it was necessary for the resolution to be put 'in the approved form'. In Bendall-Harris[45] Bowden DCJ held that that requirement was mandatory, such that the Court (in that case) had no jurisdiction if the resolution was not put in the approved form.
[45] Bendall-Harris at [10] – [14].
Section 3 of the ST Act provides that 'a document … is in an approved form only if it is in the form approved under the regulations or Transfer of Land Act requirements and it complies with any requirements of the regulations or Transfer of Land Act requirements'.
Sub-regulation 5(1) of the Strata Titles (General) Regulations 2019 (WA) (ST Regs) provides, in effect, that something is in an approved form if it is in a form approved by the Registrar of Titles. Sub‑regulation 5(2) then says that a document is taken to be in a form approved by the Registrar if it is provided in accordance with requirements specified in relation to that document on the Landgate website.
The Landgate website includes a form (Form ZB) headed Notice of Resolution of Conversion to a Survey-Strata Scheme (Notice of Resolution), which contains the draft of a resolution to convert a strata scheme to a survey-strata scheme.
The resolution of which notice was given by the letter dated 16 November 2022, and on which the applicants voted on 25 November 2022, is in almost identical terms to that set out in the Notice of Resolution.
In our view nothing turns on the difference. Indeed, in our view the only difference in wording is that which is necessary to identify the documents which were referred to as being 'tabled for the purposes of the relevant resolution'.
In light of the above we are therefore also satisfied, and we find, that we have jurisdiction to make any order we consider appropriate to resolve the dispute between the parties arising from the failure to achieve unanimous support for the applicants' resolution for the conversion of the strata scheme to a survey-strata scheme.
Scope of Our Discretion and Relevant Considerations
In contrast with the pre-2018 provisions, which limited availability of relief only to situations where the District Court was satisfied that a proprietor had acted unreasonably or it was otherwise in the proprietor's best interests, our jurisdiction is extraordinarily broad. Neither the ST Act,[46] nor the StateAdministrative Tribunal Act 2004 (WA) (SAT Act) provides us with any real guidance as to the circumstances in which we should act or how we should resolve the dispute, save that the SAT Act provides that we are bound by the rules of natural justice, not bound by the rules of evidence and must act according to equity, good conscience, and the substantial merits of the case.[47]
[46] See, for example, Efficient Building Team Pty Ltd and The Owners of 25, 27, 29, 31 Parry Street Fremantle Strata Plan 6413 [2021] WASAT 158 at [99]; The Owners of Ellement 996 Strata Plan 53042 and Tobias [2022] WASAT 49 at [80].
[47] SAT Act, s 32(1) and (2).
In the absence of any express statutory guidance, our discretion is only limited by the subject matter, scope and purpose of the statutory regime.[48]
[48] Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at [40].
Consistent with that rule, the Tribunal in Arasi[49] held that the factors relevant to the Tribunal's exercise of discretion pursuant to s 200(2)(n) of the ST Act (that the strata company is taken to have passed or not to have passed a specific resolution as a unanimous resolution) includes: the provisions of the ST Act, the principles of reasonableness and fairness, the interests of the parties, equity and due consideration of all the information at its disposal.
[49] Arasi & Anor and The Owners of Beverley Court [2005] WASAT 197 at [27] – [28], adopted in The Owners of Ellement 996 Strata Plan 53042 and Tobias [2022] WASAT 49 at [82] – [83].
Those matters, which are plainly not intended to be exhaustive, are comparable to those considered in previous District Court decisions concerning the factors relevant to the exercise of discretion whether to make unanimous a resolution which was not unanimous but which was sufficiently supported to satisfy the requirements of a 'special resolution'. In McHattie[50] (which was subsequently followed and applied), Wisbey DCJ held that the following matters were relevant in such circumstances:
(a)The extent of the majority in favour of the resolution;
(b)The benefit to the proprietors occasioned by the resolution;
(c)The detriment to the proprietors generally, both immediately and prospectively, by the resolution; and
(d)Any detriment flowing particularly to any proprietor, and more particularly to any proprietor opposing the resolution.
[50] McHattie v Tuscan Investments Pty Ltd (1997) 18 SR (WA) 231, 235.
In Bendall-Harris, Bowden DCJ was concerned with an application to convert a strata plan to a survey-strata plan. The application arose under the now-repealed s 51A of the ST Act, which provided the District Court with the power to deem a resolution in relation to a two‑lot strata scheme to have passed as unanimous if satisfied that a proprietor had acted unreasonably in refusing to agree, or that it was in the best interests of the proprietors that the order be made.
His Honour stated that in order for such an order to be made, he must consider whether such a result would give rise to:[51]
(a)any detriment to any lot owner and the extent (if any) to which it could be said to derogate from their proprietary rights;
(b)the extent of any costs to lot owners;
(c)the formalisation of longstanding informal arrangements; and
(d)creating certainty between lot owners and thus reducing disputes and contributing to a harmonious relationship between them.
[51] Bendall-Harris at [57].
Finally, we note the High Court's decision in Ainsworth v Albrecht, which concerned the Queensland strata legislation question and, particularly, the question whether opposition to a motion was unreasonable. Relevantly, the majority held that:
(a)there is no requirement upon one lot owner to assist another, at least if it may reasonably be adverse to their own interests;
(b)opposition may not be unreasonable if for no other reason that a lot owner may expect something in return for giving up a right;
(c)there is no requirement that lot owners act altruistically or sympathetically at the expense of their own interest; and
(d)a reasonable apprehension of adverse effects to property rights is not unreasonable. [52]
[52] Ainsworth v Albrecht [2016] HCA 40; (2016) 261 CLR 167 at [60] – [64].
Those findings reinforce that the orders sought are not to be made lightly. That is:
(a)First, the proposed conversion will result in an alteration to the proprietary interests of each of the lot owners against the wishes of the second respondent;
(b)Secondly, if granted, the application will, in effect, abolish the right of the second respondent to not consent to a resolution of the strata company;
(c)Thirdly, at purchase each lot owner accepted the rights and obligations of the owner of a strata titled lot and, in our view, an application for conversion cannot be justified simply on the basis that the strata scheme no longer suits the purposes of one of the parties. Put another way, there is nothing to suggest that the rights of a lot owner in favour of a conversion are anything other than equal to the rights of the lot owner who is not in favour of the proposal.
Resolution
As noted above, we have determined to grant the application. More particularly, we have determined that the strata company should be taken to have approved the resolution for the conversion to a survey‑strata scheme. Our reasons are as follows in no particular order.
First, such an outcome will facilitate the formalisation and/or validation of longstanding informal arrangements.
As noted above, there has been no real attempt by the parties to manage the common property through the first respondent or, indeed, to comply with the more formal obligations of the first respondent under the ST Act as a result of the exceedingly poor relationship between the applicants and the second respondent. As a result, various informal arrangements have been put in place, including the erection of a fence dividing the 'back yard' and works done on and near to the driveways that reflect the informal division of common property.
Secondly, and further to the first point, such an outcome will result in the enhancement of each party's use and enjoyment of their property, by which we refer to both their own building as well as that part of the common property which they have, informally, been utilising to the exclusion of the other.
Thirdly, and further again to the first and second points, in the absence of such an outcome we have no doubt that the use and enjoyment of their property, including the maintenance and improvement thereof, will continue to be the subject of dispute between them.
Put another way, the conversion will allow the parties to maintain and improve their homes and gardens without the requirement of approval by the other party, which appears to inevitably result in dispute.
Fourthly, such an outcome will address the protracted dysfunction of the strata company, which is to the detriment of the parties but appears otherwise insoluble whilst the applicants and second respondent remain obliged to deal with each other in relation to common property.
Fifthly, such an outcome will result in the increase in the capital value of each lot.
Sixthly, such an outcome will (as has already been indicated) eliminate much in the way of causes of the current and historical conflicts between the parties.
That is, on the evidence provided we are satisfied that real and substantial conflict has persisted between the applicants and second respondent in relation to the management, maintenance and improvement of the common property over a substantial period of time and continues to the present day.
The proposed conversion to survey-strata will eliminate the common property and, while the relationship will not be completely severed – there will remain in relation to the carport a shared wall, a shared pillar and a roof which extends across both lots – the capacity of each party to interfere in the life of the other shall be limited to these items. Such an outcome, in our view, is closely analogous to the capacities of adjoining owners of green titled lots to annoy each other over the boundary fence.
Those reasons largely address two out of the three grounds relied upon by the second respondent for her opposition to the proposed conversion: (1) that the history of the parties' interactions has created a lack of trust; and (2) that the conversion to survey-strata would not resolve the issues between the parties.
We accept that our decision will not resolve the lack of trust between the parties and may, in the immediate term, in fact, provide another source of friction. However, for the reasons set out above, we are of the view that in the longer term a survey-strata scheme will provide fewer opportunities for dispute.
The other ground relied upon by the second respondent is that the proposed conversion will diminish her power to control or object to changes to what is now common property.
That is, no doubt, true, although it is worth emphasising that that is so for both proprietors; the applicants will also lose the power to control or object to changes on the proposed Lot 1.
We reiterate that we do not take lightly the consequences of our decision.
But in our view the current situation (which appears to be both current and longstanding) is intolerable for both parties and demands a solution. As we have indicated, in our view the proposed conversion appears to have several considerable benefits that justify the decision we have made.
We are reinforced in our decision by the fact that the powers of control and/or objection that the second respondent seeks to retain appear to have been used by both the applicants and the second respondent as a sword as well as a shield and, somewhat paradoxically, also ignored by the creation of de facto portions of privately controlled portions of common property.
Finally, in this regard, the focus of the second respondent's complaints regarding the common property was the 'corner' portion between the two street frontages.
In particular, she complained that the applicants had removed established plants from the common property which had caused an increase in dust and a clear line of sight from her lot to the passing traffic.[53] In our view, the erection of a solid fence along the proposed boundary between the proposed survey-strata lots would likely, and significantly, mitigate those concerns.
[53] ts 17, 19 – 29 and 32, 29 April 2024.
The final matter to be noted as the subject of consideration is that the conversion of the strata scheme to a survey-strata scheme will effect a form of subdivision of the land.
Neither party addressed us on this issue and we note the issue only for completeness and to say that in other matters the provisions of the R‑Codes or the relevant planning scheme may be relevant to the outcome.
In this case we are satisfied that the lot sizes are greater than the minimum lot sizes provided for the land by the R-Codes and are, at least on that basis, satisfied that there is no such impediment to the proposed conversion.
For these reasons, we consider it appropriate, in resolution of this proceeding and the scheme dispute, to order:
(a)pursuant to s 200(2)(n) of the ST Act, that the strata company be taken to have unanimously passed the resolutions which were proposed by the applicants by Notice of Proposed Resolutions Outside of a General Meeting dated 12 November 2022;
(b)pursuant to s 200(2)(l) of the ST Act, that the strata company be required (and therefore authorised) to undertake all actions reasonably necessary to put into effect those resolutions; and
(c)pursuant to s 200(1) of the ST Act, for the purpose of giving effect to the foregoing orders, that the applicants are authorised by themselves or their legal representatives to request and obtain:
(i)consents to the Schedule of Unit Entitlements from persons referred to in Sch 2A cl 31E(1)(e) of the ST Act; and
(ii)any other consents required to give to effect to the conversion of strata scheme 12286 to a survey-strata scheme.
Before concluding and by way of completeness, we note that the certificate of the licenced valuer to the proposed schedule of unit entitlements was signed and dated 6 January 2022.
Regulation 55(3) of the ST Regs provides that the date of issue of such a schedule 'must be no more than two years before the application to register the schedule, or amendment, is made to the Registrar of Titles'. That is, it appears that it will be necessary for a new schedule to be prepared before the first respondent lodges it and other documentation with the Registrar of Titles pursuant to cl 31D of Schedule 2A of the ST Act.
In our view, reg 55(3) is not relevant to the exercise of the Tribunal's discretion to resolve scheme disputes pursuant to s 197 of the ST Act and is instead a matter for the Registrar of Titles. Our reasons for this conclusion are twofold.
Firstly, we cannot determine how the Registrar might assess the application, particularly in circumstances where some of the necessary documents cannot be prepared unless and until the strata company approves the resolution for conversion. Secondly, reg 55(3) is not determinative of the procedures of the Registrar, who presumably has the discretion to issue a requisition to allow any irregularities in the documents to be addressed by the parties.
Conclusion
For the foregoing reasons, the orders described at para 77 above should be made.
The applicants expressly disowned any order for costs and so none will be made.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
PN
Associate to Deputy President Judge Jackson
5 JULY 2024
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