IELATI and OWNERS OF ALTAIR WATERFRONT APARTMENTS - STRATA PLAN 52779

[2008] WASAT 297

IELATI and OWNERS OF ALTAIR WATERFRONT APARTMENTS - STRATA PLAN 52779 [2008] WASAT 297

Jurisdiction:	STATE ADMINISTRATIVE TRIBUNAL	Citation No:	[2008] WASAT 297
Act:	STRATA TITLES ACT 1985 (WA)
Case No:	CC:1807/2008	Heard:	27 NOVEMBER 2008
Coram:	DR B DE VILLIERS (MEMBER)	Delivered:	27/11/08
No of pages:	9	Judgment Part:	1 of 1
Result:	The application is dismissed
Category:	B
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Parties:	IMMACOLATA (MARIA) IELATI OWNERS OF ALTAIR WATERFRONT APARTMENTS - STRATA PLAN 52779
Catchwords:	Property Strata titles Application for interim relief Whether the election of the strata council complied with the Strata Titles Act 1985 (WA) General principles for the grant of interim relief Balance of convenience Who should act as the strata council if the conditions have not been satisfied
Legislation:	Strata Titles Act 1986 (WA), s 46, s 82, s 82(2), Sch 1 by­law 3.4
Case References:	South Veterinary Group Pty Ltd and Sharpe [2006] WASAT 222
Orders	1. The application for interim relief is dismissed.
Summary	The application concerned a request for urgent relief to nullify the election of the 2008 strata council and to declare all decisions made by the council void.,The parties were in agreement that the strata council had not been elected in strict compliance with the Strata Titles Act 1985 (WA). This was due to an oversight of the strata manager when it conducted the election. The 2007 council therefore decided to continue with its functioning until an extraordinary general meeting is convened in early 2009 to elect a new strata council.,Ms Ielati sought interim relief to prevent the council from meeting at all and for all of the decisions they have made to be nullified. She was satisfied for the strata manager to continue its functions and to take instructions from the general body of owners. The strata council opposed the application on grounds that with such a large complex it would be very impractical to function without a council.,The Tribunal applied the general criteria for the award of interim relief as well as the specific requirements set out in s 82 of the Strata Titles Act 1985 (WA). The Tribunal dismissed the application on grounds that the balance of convenience favours the preservation of the status quo and no urgent circumstances have been raised to justify the orders sought.

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : STRATA TITLES ACT 1985 (WA) CITATION : IELATI and OWNERS OF ALTAIR WATERFRONT APARTMENTS - STRATA PLAN 52779 [2008] WASAT 297 MEMBER : DR B DE VILLIERS (MEMBER) HEARD : 27 NOVEMBER 2008 DELIVERED : Edited reasons delivered orally on
28 NOVEMBER 2008 FILE NO/S : CC 1807 of 2008 BETWEEN : IMMACOLATA (MARIA) IELATI

Applicant

AND

OWNERS OF ALTAIR WATERFRONT APARTMENTS - STRATA PLAN 52779
Respondent

Catchwords:

Property - Strata titles - Application for interim relief - Whether the election of the strata council complied with the Strata Titles Act 1985 (WA) - General principles for the grant of interim relief - Balance of convenience - Who should act as the strata council if the conditions have not been satisfied

Legislation:

Strata Titles Act 1986 (WA), s 46, s 82, s 82(2), Sch 1 by­law 3.4

(Page 2)

Result:

The application is dismissed

Category: B

Representation:

Counsel:

Applicant : Self­represented
Respondent : Self­represented

Solicitors:

Applicant : Self-represented
Respondent : Self-represented

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

South Veterinary Group Pty Ltd and Sharpe [2006] WASAT 222


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REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

1 The application concerned a request for urgent relief to nullify the election of the 2008 strata council and to declare all decisions made by the council void.

2 The parties were in agreement that the strata council had not been elected in strict compliance with the Strata Titles Act 1985 (WA). This was due to an oversight of the strata manager when it conducted the election. The 2007 council therefore decided to continue with its functioning until an extraordinary general meeting is convened in early 2009 to elect a new strata council.

3 Ms Ielati sought interim relief to prevent the council from meeting at all and for all of the decisions they have made to be nullified. She was satisfied for the strata manager to continue its functions and to take instructions from the general body of owners. The strata council opposed the application on grounds that with such a large complex it would be very impractical to function without a council.

4 The Tribunal applied the general criteria for the award of interim relief as well as the specific requirements set out in s 82 of the Strata Titles Act 1985 (WA). The Tribunal dismissed the application on grounds that the balance of convenience favours the preservation of the status quo and no urgent circumstances have been raised to justify the orders sought.

Ex tempore reasons for decision

5 The reasons for decision in this matter were handed down orally on 28 November 2008. The Tribunal undertook to provide an edited version of the reasons to the parties in writing. These are the edited reasons.

Background

6 The applicant is seeking an interim order to the following effect:

1) To stop those persons elected as the 2007 council of owners of Altair Waterfront Apartments from acting as the current council of the strata company;

2) To stop those persons from convening meetings of the strata company, making resolutions and entering into any agreements on behalf of the strata company; and

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3) That any resolutions made or agreements entered into by those persons be declared null and void and of no effect.

7 The facts giving rise to the dispute can be summarised as follows.

8 At the Annual General Meeting (AGM) held on 30 July 2008 a new strata council was elected. The election was to be pursuant to Sch 1 by­law 3.4 of the Strata Titles Act 1985 (WA) (ST Act).

9 Approximately two months after the election it was realised, after legal advice had been obtained, that the procedures for election were not strictly complied with.

10 The question whether there has been a breach of the by­laws, and if so what the consequences are, is for determination in the main application and not for the interim application. Suffice to say that for purposes of the interim application, both sides agree that procedures had not been complied with due to an oversight on the part of the strata management.

11 Both sides obtained legal advice which confirmed that the election of the 2008 council was not in strict compliance with the by­laws.

12 The 2008 elected council therefore voluntarily decided to stand down. The 2007 council decided that, in the absence of a duly elected council in 2008, they would continue with their functioning, since that council - the 2007 council - had not been replaced by a newly-elected council.

13 The 2007 council has, since its reconstitution, been meeting fortnightly. It recently refrained from engaging in any meetings to await a decision from this Tribunal regarding the interim application.

Legal framework

14 The legal framework against which an interim application must be determined comprises of two elements: the statutory provisions of s 82 of the ST Act and the general principles regulating interim relief as set out in the matter of South Veterinary Group Pty Ltd and Sharpe [2006] WASAT 222 (South Veterinary Group).

15 Section 82(2) of the ST Act provides as follows:

Where an applicant for an order under this division states in his application that he requests an interim order, the State Administrative Tribunal may, if satisfied on reasonable grounds that by reason of the urgent circumstances of the case it should do so, it may make interim orders.

(Page 5)

16 As far as the South Veterinary Group decision is concerned, the following general requirements were set out for purposes of interim relief. First, there must be a serious question to be tried. Second, the interim proceeding is not aiming at determining the matter in substance. Third, damages may not be a sufficient remedy to the applicant if the decision is ultimately in her favour. Fourth, the balance of convenience of the parties must be taken into account and fifth, the general provision is that the status quo must be preserved.

Submissions

17 The hearing of the interim application took place on 27 November 2008. Extensive written and oral submissions, mixed with evidence, were received. The Tribunal spent a substantial period to assist the parties to come to a common approach. Those efforts were not successful.

18 In essence, the applicant contends that there is no lawfully elected council, and as a result all decisions made after 30 July 2008 when the AGM was held, are automatically voidable. The applicant contends that an extraordinary general meeting (EGM) should urgently be held, but that until such time the scheme must function without a strata council. The applicant proposes that the strata manager continues to manage the scheme during such time with instructions purportedly being given by all of the owners through one or more EGMs until a new council is elected.

19 The respondent contends that the 2007 council is acting in good faith and that such a large complex cannot effectively be managed without a strata council. There are, according to the respondent, many issues regarding the building, such as security, require attention and it is essential to the interests of all owners that the 2007 strata council continue its work until a new council is elected.

20 The managing agent also contended that their job would be very difficult if there were no council to liaise with. According to the evidence of Mr Russell, who carries responsibility for managing the scheme, he would not know whose instructions to take, who to turn to for decisions, or what priorities should be pursued.

Consideration

21 The Tribunal will first announce its finding and then provide reasons since that is an easier process to follow in the case of oral reasons.

22 The Tribunal is not satisfied that the general principles to grant interim relief have been satisfied by the applicant. As a result, I am not satisfied that, as required by s 82 of the ST Act, there are reasonable grounds that by reason of

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urgent circumstances interim relief should be given. The application for interim relief should therefore be dismissed.

23 The reasons for this conclusion, based on the criteria set out above by the Tribunal, are as follows:

• The first criterion is there must be a serious question to be tried. The Tribunal accepts that the application is not trivial and there is a serious question to be tried in the main application. These proceedings will, however, not make a determination of the main application. The Tribunal understands the concerns expressed by the applicant that statutory procedures for the election of a council have purportedly not been complied with. The Tribunal notes however that, according to Ms Ielati's evidence: 'All the other business of the AGM was correct' and it was due to an oversight by the strata manager that the election procedures were strictly not complied with.

The respondent accepts that the correct procedures for an election of a council had not been complied with and that the 2007 council had not been replaced. A pragmatic decision was therefore made for the 2007 council to continue functioning until a properly elected council could replace them. The 2007 council agreed during the hearing to convene an extraordinary general meeting urgently, possibly in February 2009, for purposes of electing a new council.

Although the Tribunal will not at this stage make a decision regarding the lawfulness of the approach taken by the 2007 council, the Tribunal fails to see the reason or benefit why the 2007 Council should be disbanded or their resolutions be declared void. No impropriety or corruption is alleged, and on the available evidence the council is doing as best as they can under difficult circumstances to discharge their functions.

The chairman of the council, Mr Ingles, impressed the Tribunal with his evidence and sincerity to do what is best in the interests of the scheme. The Tribunal is satisfied that, although there remains a serious question to be determined, the 2007 council may continue to discharge its functions.

(Page 7)

• The second criterion is that the interim proceeding is not aimed at determining the matter in substance. The Tribunal explained to the parties that the purpose of the interim proceedings is limited to the application for interim relief. Broader issues can therefore not be determined. It must also be emphasised that the refusal of the Tribunal to grant interim relief should not be interpreted as a premature rejection of the main application. The main application will be heard in due course.

The Tribunal is, as far as the interim application is concerned, not satisfied that there are urgent circumstances to grant relief. In fact, the opposite is the case. If relief is granted as sought by the applicant, the scheme would fall into uncertainty, since decisions could then only be made by a general meeting (s 46 of the ST Act). Mrs Ielati acknowledged, however, in evidence that it is difficult to obtain a quorum for a scheme with 123 proprietors - many of them not living on­site. The scheme would then be in a stalemate of no effective decision­making.

The Tribunal notes Ms Ielati commented that the building would 'not fall down' without a strata council. But it must be acknowledged that the proper management of the scheme would be negatively affected if no strata council were in place and all decisions taken since July 2008 were nullified.

The Tribunal also accepts the concern expressed by the strata manager, Mr Russell, that if the strata council were to be disbanded, the strata manager's work would become extremely difficult, since there would be no authority with which they could interact, take instructions, receive approvals, et cetera. It is obvious to the Tribunal that for such a large complex to be without council guidance during the holiday season would not be in anybody's interest.

(Page 8)

• The third criterion is that damages would not be a sufficient remedy to the applicant if the decision is ultimately in her favour. While an award of damages may not be at stake in the application as in the case of commercial litigation, it must be noted that any decision taken by the council remains subject to review by the owners and ultimately by the Tribunal. Aggrieved owners can also convene an EGM if they are dissatisfied.

Ms Ielati has already indicated that, although she made attempts to muster numbers for an EGM, she failed to get sufficient support. That does not mean the council is above oversight. Any decision of the council may be challenged before this Tribunal.

I am therefore satisfied that the interests of all owners are adequately taken care of by the provisions of the ST Act.


• The fourth criterion is the balance of convenience of both parties. The balance of convenience clearly favours the respondents and other owners above that of the applicant, Ms Ielati. Ms Ielati failed to explain to the Tribunal what benefit would be served if the strata council were prevented from meeting, or what certainty would flow if all of the decisions since July 2008 were voided. That would plunge the scheme into uncertainty and conflict.

Ms Ielati did not specify specific decisions that aggrieve her. She took a broad brush approach to include all decisions. The Tribunal does not accept her contention and is not satisfied that there are reasonable grounds, by reason of urgent circumstances, to grant the relief she seeks. The Tribunal accepts the evidence of Mr Ingles and Mr Russell that there are many ongoing matters that require urgent attention of the council, that the council has been meeting fortnightly to work through the backlog of issues and that it is not in the interests of the owners for the process to be interrupted.

The Tribunal is further satisfied that the council and strata manager are doing their best to serve the interests of the owners. This is reflected in the frequency of their meetings, the legal advice they obtained, attention that is given to security issues and their willingness to agree to the convening of

(Page 9)

an EGM in early 2009. There is no suggestion of impropriety against the council and no evidence to suggest their continued functioning would prejudice the owners. The balance of convenience is therefore for the current arrangements to continue until a final decision is made.

• The fifth criterion relates to preservation of the status quo. The general principle is that unless there are very convincing and compelling reasons the status quo must be maintained until a final decision is made. As explained above, there are no compelling reasons why the status quo should be interrupted. The 2007 council is functioning well. It makes effective decisions. It meets regularly and there are urgent issues for it to deal with. There is no reason to interfere with the status quo.

Conclusion

24 My conclusion is therefore that the application for interim relief should be dismissed on grounds that (a) it does not meet the general criteria for interim relief and (b) it has not been shown that 'reasonable grounds that by reason of the urgent circumstances' such relief should be given (s 82(2) of the ST Act).

Order

1. The application for interim relief is dismissed.

I certify that this and the preceding [24] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

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DR B DE VILLIERS, MEMBER