Kasta Nominees Pty Ltd v O'Connor

[2016] WADC 16

KASTA NOMINEES PTY LTD -v- O'CONNOR [2016] WADC 16

Jurisdiction:	DISTRICT COURT OF WESTERN AUSTRALIA	Citation No:	[2016] WADC 16
Case No:	CIVO:92/2014	Heard:	15 JANUARY 2016
Coram:	BIRMINGHAM QC DCJ	Delivered:	5/02/16
Location:	PERTH
No of pages:	15	Judgment Part:	1 of 1
Result:	Preliminary issue dismissed
PDF Version

Parties:	KASTA NOMINEES PTY LTD SILVERJAY ENTERPRISES PTY LTD FRANCIS DAVID O'CONNOR ANN MARIA O'CONNOR BERNADETTE AUDREY SEXTON BE & SG BROWN NOMINEES PTY LTD ROBYN ANNETTE RAFTIS DRAGICA YEREMICH PETER MICHAEL McCARREY ZAGORKA McCARREY THE OWNERS OF SWANVIEW APARTMENTS MARK ARCHIBALD NARELLE HOMES MARK HARRIS DEAN FINLAYSON BRENDA LAWRENCE NIKOLA BARONI JANETTE BARONI KRISTY BEZANSON MOUSA HADAD DANIELLE HADAD PHILLIP HALL JAYNE HALL SUZANNE BELL KENNETH KING ADRIAN KNOWLES MARY-ELLEN KNOWLES JACQUELINE HEALEY CLIFFORD EPTON SCOTT ADAMS BARRY ROSS MITCHELL SUZANNE MARIE MITCHELL ANTHONY ROSSER ROBERT JOHN SCOTT GLENYS DAWN SCOTT ANTHONY DONALD YOUNG ELIZABETH ALISON YOUNG ASHROSE PTY LTD JAMES ALVEY SHEILA LESLEY ALVEY DAWN GAIL VOGES HARUHIKO FUKUDA TETSUKO FUKUDA ERIC BROOKE RCG PTY LTD
Catchwords:	Strata Titles Act 1985 Requirement for unanimous vote Application for declaration pursuant to s 51 of the Act Form of resolution Whether separate resolution in respect of approval of unit entitlements upon re-subdivision required Trial of preliminary issue
Legislation:	Strata Titles Act 1985
Case References:	Nil

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA

IN CIVIL

LOCATION : PERTH CITATION : KASTA NOMINEES PTY LTD -v- O'CONNOR [2016] WADC 16 CORAM : BIRMINGHAM QC DCJ HEARD : 15 JANUARY 2016 DELIVERED : 5 FEBRUARY 2016 FILE NO/S : CIVO 92 of 2014 BETWEEN : KASTA NOMINEES PTY LTD

First-named Applicant

SILVERJAY ENTERPRISES PTY LTD
Second-named Applicant

AND

FRANCIS DAVID O'CONNOR
First-named First Respondent

ANN MARIA O'CONNOR
Second-named First Respondent

BERNADETTE AUDREY SEXTON
Second Respondent

BE & SG BROWN NOMINEES PTY LTD
Third Respondent

ROBYN ANNETTE RAFTIS
Fourth Respondent

DRAGICA YEREMICH
First-named Fifth Respondent

PETER MICHAEL McCARREY
Second-named Fifth Respondent

ZAGORKA McCARREY
Third-named Fifth Respondent

THE OWNERS OF SWANVIEW APARTMENTS
Sixth Respondent

MARK ARCHIBALD
First-named Seventh Respondent

NARELLE HOMES
Second-named Seventh Respondent

MARK HARRIS
Eighth Respondent

DEAN FINLAYSON
First-named Ninth Respondent

BRENDA LAWRENCE
Second-named Ninth Respondent

NIKOLA BARONI
First-named Tenth Respondent

JANETTE BARONI
Second-named Tenth Respondent

KRISTY BEZANSON
Eleventh Respondent

MOUSA HADAD
First-named Twelfth Respondent

DANIELLE HADAD
Second-named Twelfth Respondent

PHILLIP HALL
First-named Thirteenth Respondent

JAYNE HALL
Second-named Thirteenth Respondent

SUZANNE BELL
Fourteenth Respondent

KENNETH KING
Fifteenth Respondent

ADRIAN KNOWLES
First-named Sixteenth Respondent

MARY-ELLEN KNOWLES
Second-named Sixteenth Respondent

JACQUELINE HEALEY
Seventeenth Respondent

CLIFFORD EPTON
Eighteenth Respondent

SCOTT ADAMS
Nineteenth Respondent

BARRY ROSS MITCHELL
First-named Twentieth Respondent

SUZANNE MARIE MITCHELL
Second-named Twentieth Respondent

ANTHONY ROSSER
Twenty-First Respondent

ROBERT JOHN SCOTT
First-named Twenty-Second Respondent

GLENYS DAWN SCOTT
Second-named Twenty-Second Respondent

ANTHONY DONALD YOUNG
First-named Twenty-Third Respondent

ELIZABETH ALISON YOUNG
Second-named Twenty-Third Respondent

ASHROSE PTY LTD
Twenty-Fourth Respondent

JAMES ALVEY
First-named Twenty-Fifth Respondent

SHEILA LESLEY ALVEY
Second-named Twenty-Fifth Respondent

DAWN GAIL VOGES
Twenty-Sixth Respondent

HARUHIKO FUKUDA
First-named Twenty-Seventh Respondent

TETSUKO FUKUDA
Second-named Twenty-Seventh Respondent

ERIC BROOKE
Twenty-Eighth Respondent

RCG PTY LTD
Twenty-Ninth Respondent

Catchwords:

Strata Titles Act 1985 - Requirement for unanimous vote - Application for declaration pursuant to s 51 of the Act - Form of resolution - Whether separate resolution in respect of approval of unit entitlements upon re-subdivision required - Trial of preliminary issue

Legislation:

Strata Titles Act 1985

Result:

Preliminary issue dismissed

Representation:

Counsel:

First-named Applicant : Mr C M Slater
Second-named Applicant : Mr C M Slater
First-named First Respondent : Mr M A Atkinson
Second-named First Respondent : Mr M A Atkinson
Second Respondent : Mr M A Atkinson
Third Respondent : Mr M A Atkinson
Fourth Respondent : No appearance
First-named Fifth Respondent : No appearance
Second-named Fifth Respondent : No appearance
Third-named Fifth Respondent : No appearance
Sixth Respondent : No appearance
First-named Seventh Respondent : Mr M A Atkinson
Second-named Seventh Respondent : Mr M A Atkinson
Eighth Respondent : No appearance
First-named Ninth Respondent : No appearance
Second-named Ninth Respondent : No appearance
First-named Tenth Respondent : No appearance
Second-named Tenth Respondent : No appearance
Eleventh Respondent : No appearance
First-named Twelfth Respondent : No appearance
Second-named Twelfth Respondent : No appearance
First-named Thirteenth Respondent : No appearance
Second-named Thirteenth Respondent : No appearance
Fourteenth Respondent : No appearance
Fifteenth Respondent : No appearance
First-named Sixteenth Respondent : No appearance
Second-named Sixteenth Respondent : No appearance
Seventeenth Respondent : No appearance
Eighteenth Respondent : No appearance
Nineteenth Respondent : No appearance
First-named Twentieth Respondent : Mr M A Atkinson
Second-named Twentieth Respondent : Mr M A Atkinson
Twenty-First Respondent : No appearance
First-named Twenty-Second Respondent : Mr M A Atkinson
Second-named Twenty-Second Respondent : Mr M A Atkinson
First-named Twenty-Third Respondent : No appearance
Second-named Twenty-Third Respondent : No appearance
Twenty-Fourth Respondent : No appearance
First-named Twenty-Fifth Respondent : No appearance
Second-named Twenty-Fifth Respondent : No appearance
Twenty-Sixth Respondent : No appearance
First-named Twenty-Seventh Respondent : No appearance
Second-named Twenty-Seventh Respondent : No appearance
Twenty-Eighth Respondent : No appearance
Twenty-Ninth Respondent : No appearance

Solicitors:

First-named Applicant : Morgan Alteruthemeyer
Second-named Applicant : Morgan Alteruthemeyer
First-named First Respondent : Atkinson Legal
Second-named First Respondent : Atkinson Legal
Second Respondent : Atkinson Legal
Third Respondent : Atkinson Legal
Fourth Respondent : Not applicable
First-named Fifth Respondent : Not applicable
Second-named Fifth Respondent : Not applicable
Third-named Fifth Respondent : Not applicable
Sixth Respondent : Not applicable
First-named Seventh Respondent : Atkinson Legal
Second-named Seventh Respondent : Atkinson Legal
Eighth Respondent : Not applicable
First-named Ninth Respondent : Not applicable
Second-named Ninth Respondent : Not applicable
First-named Tenth Respondent : Not applicable
Second-named Tenth Respondent : Not applicable
Eleventh Respondent : Not applicable
First-named Twelfth Respondent : Not applicable
Second-named Twelfth Respondent : Not applicable
First-named Thirteenth Respondent : Not applicable
Second-named Thirteenth Respondent : Not applicable
Fourteenth Respondent : Not applicable
Fifteenth Respondent : Not applicable
First-named Sixteenth Respondent : Not applicable
Second-named Sixteenth Respondent : Not applicable
Seventeenth Respondent : Not applicable
Eighteenth Respondent : Not applicable
Nineteenth Respondent : Not applicable
First-named Twentieth Respondent : Atkinson Legal
Second-named Twentieth Respondent : Atkinson Legal
Twenty-First Respondent : Not applicable
First-named Twenty-Second Respondent : Atkinson Legal
Second-named Twenty-Second Respondent : Atkinson Legal
First-named Twenty-Third Respondent : Not applicable
Second-named Twenty-Third Respondent : Not applicable
Twenty-Fourth Respondent : Not applicable
First-named Twenty-Fifth Respondent : Not applicable
Second-named Twenty-Fifth Respondent : Not applicable
Twenty-Sixth Respondent : Not applicable
First-named Twenty-Seventh Respondent : Not applicable
Second-named Twenty-Seventh Respondent : Not applicable
Twenty-Eighth Respondent : Not applicable
Twenty-Ninth Respondent : Not applicable

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

Nil
1 BIRMINGHAM QC DCJ: This action concerns the mixed commercial and residential strata title property known as Swan View. It is situated on the southern corner of the intersection of Melville Parade and Preston Street, Como. The property comprises common property, five commercial units and 29 residential units.

2 The applicants are the registered proprietor of the five commercial lots. The respondents are proprietors of the residential lots.

3 The strata plan (48343) was registered on 12 October 2009 with plans for the building and specific unit entitlements. The aggregate unit entitlement of all lots is 10,000. The aggregate unit entitlement of the commercial lots is 4,106. The aggregate unit entitlement of the residential lots is 5,894. The common property includes 97 car bays.

4 On 23 May 2013 the council of owners wrote to all owners and outlined a proposal for re-subdivision of the strata plan and unit entitlement to allocate 95 of the 97 common property car bays proportionally to each of the commercial units. The re-subdivision was said to be required to facilitate a change in use for the commercial units consistent with the relevant local zoning requirements. Attached to the letter were:

(i) the amended strata plan detailing proposed re-subdivision and identifying by survey those areas of common property to be allocated to the commercial units;

(ii) an engineer's letter (relating to proposed structural changes to install car stackers in the carpark following the re-subdivision); and

(iii) A completed Form 3 detailing the proposed unit entitlements following the re-subdivision duly certified by Shane Jaeger, a licensed valuer, on 9 May 2013 in accordance with s 14(2) of the Act.

5 The owners were advised that the proposal would be the subject of a resolution to be debated and voted on the upcoming annual general meeting of the strata company then scheduled for 27 July 2013.

6 On 5 July 2013 a notice of annual general meeting (AGM) was issued to unit holders giving notice of the AGM to be held on 27 July 2013. The notice set out, inter alia, the background to the proposal for re-subdivision and a proposed resolution in the following terms:

Item 6 Special business

6.1 Proposed re-subdivision of strata plan 48343

As you are aware the owners of the commercial strata units which to have the commercial units as owned as offices rather than the existing zoning in which the upper floors are offices and the ground floors can be used as a restaurant or tavern. In order to alter the zoning, additional car bays are required and the first step is to register the existing car bays proportionally to each of the commercial units, which means that a new strata plan would need to be registered with Landgate.

Owners have been sent a letter from the council of owners, the proposed re-subdivision of the strata plan, engineer's letter and proposed unit entitlements, and given an opportunity to meet with Clive Ross to discuss this proposal. The commercial owners have requested that we table these resolutions for further discussion amongst the owners and approval. As you are aware, these changes require approval from all owners.

'The owners of the strata company resolves by a unanimous resolution that the re-subdivision of the strata plan in accordance with the details as has been provided in the proposed strata plan of re-subdivision and accompanying notes is agreed to'.

Please note this is a unanimous resolution

7 At the AGM, of the 29 owners attending or holding proxies, 21 voted in favour of the resolution, five voted against and three abstained.

8 By originating summons dated 6 June 2014, the applicants seek orders pursuant to s 51 of the Strata Titles Act1985 (the Act) that:

1. The special resolution voted on at the AGM held on 27 July 2013 which required unanimous approval and which abstained 21 votes in favour, five votes against and three votes abstained, be declared sufficient to authorise the particular act proposed:

2. That the resolution shall be deemed to have been passed as a unanimous resolution.

9 Section 51 of the Act provides:

51. Relief where unanimous resolution or resolution without dissent required

(1) In any case where under this Act a unanimous resolution or a resolution without dissent is necessary before any act may be done and that resolution is not obtained but the resolution is supported to the extent necessary for a special resolution, a person included in the majority in favour of the resolution may apply to the District Court to have the resolution as so supported declared sufficient to authorise the particular act proposed and if the District Court so orders, the resolution shall be deemed to have been passed as a unanimous resolution or a resolution without dissent, as the case may be.

10 Counsel for the first, second, third, seventh, twentieth and twenty-second respondents contends that regardless of the vote, the subject resolution in the form moved at the AGM, even if deemed to be sufficiently carried, was incapable of satisfying the requirements of s 8 and s 8A of the Act. It is contended that the resolution was deficient in that it did not seek the consent of the unit holders for both the proposed plan of re-subdivision and the proposed allocation of unit entitlements set out in the application. The respondents say that s 8A(1) of the Act calls for both issues to be separately agreed by the unit holders.

11 The applicants accept that the plan of re-subdivision does require both aspects to be agreed however say that the resolution in the form proposed encompassed both aspects, that is to say, that approval of the re-subdivision by implication also included the allocation of unit entitlements as set out in the document accompanying the draft re-subdivision of the subject property.

12 Counsel for the respondents submitted that if the question as to the efficacy of the resolution was determined in the respondents' favour, the full hearing of the originating summons and consideration of the evidence and the substantive merits of the application pursuant to s 51 of the Act would not be required.

13 On 13 December 2015 I directed that issue to be heard as a preliminary issue.

14 For the purpose of the hearing, it was accepted that each owner or unit holder received a copy of the letter of 23 May 2013 together with the enclosures and, further, that such documents were incorporated by reference and identification as part of the papers for consideration with the resolution at the AGM.

15 Relevantly, s 3 of the Act defines 're-subdivision' as the meaning given by s 3(5) and s 8(1).

16 Section 3(5) provides:

A reference in this Act to a re-subdivision of a lot or common property is a reference to the alteration of the boundaries of —

(a) one or more lots so as to create only 2 or more different lots; or

(b) one or more lots so to create one or more different lots and common property; or

(c) one or more lots and common property so as to create one or more different lots or one or more different lots and common property; or

(d) common property so as to create one or more lots,

but does not include a reference to the consolidation of 2 or more lots into one lot or the conversion of one or more lots into common property.

17 Section 8 of the Act provides:

8. Re-subdivision within a scheme

(1) Lots or common property, or lots and common property, may be re-subdivided by the registration of a plan under and in the manner provided by this Act as a plan of re-subdivision.

(2) A lot in a strata scheme may only be re-subdivided by a strata plan of re-subdivision.

18 The requirements to give effect to a plan of re-subdivision are contained in s 8A of the Act. Relevantly, s 8A provides:

8A. Requirements for plan of re-subdivision

A plan of re-subdivision shall —


(a) be accompanied by an application in the prescribed form requesting the Registrar of Titles to register the plan; and the application —

(i) shall be under the seal of the strata company; and

(ii) shall confirm that —


(I) the strata company has by unanimous resolution consented to the proposed re-subdivision and to the proposed allocation of unit entitlement set out in the application; or

(II) the plan either complies with any by-laws of the kind described in item 8 in Schedule 2A or sufficiently complies with those by-laws in a way that is allowed by the regulations;

and

(b) define, in the prescribed manner, the boundaries of each lot in the parcel that is to be altered or created by the plan of re-subdivision and, in the case of a plan of re-subdivision for a strata scheme, do so by reference to a floor plan; and

…

(h) be accompanied by a certificate of a licensed valuer in accordance with section 14(2); and

19 Section 14 of the Act deals with unit entitlements. Section 14 provides:

14. Unit entitlement of lots

(1) The unit entitlement of a lot, as stated in the schedule referred to in section 5, determines —


(a) the voting rights of a proprietor; and

(b) the quantum of the undivided share of each proprietor in the common property; and

(c) subject to subsection (1)(c)(ii) of section 36, the proportion payable by each proprietor of contributions levied under that section.


(2) The certificate of a licensed valuer which is required by sections 5B(1)(b), 8A(h), 21T(1)(d) and 31E(1)(d) to accompany a strata/survey-strata plan and a plan of re-subdivision lodged for registration shall be in the prescribed form and shall certify that, or to the effect that, the unit entitlement of each lot, as stated in the schedule referred to in those sections, bears in relation to the aggregate unit entitlement of all lots delineated on the strata/survey-strata plan a proportion not greater than 5% more or 5% less than the proportion that the value of that lot bears to the aggregate value of all the lots delineated on the plan.

20 Section 8 permits the re-subdivision of a lot under the Act by the registration of a plan in the manner provided by the Act. Section 8A mandates the requirements of the Act to give effect to the re-subdivision.

21 Pursuant to s 8A(a)(ii)(I) when seeking to apply for registration of a re-subdivision the strata company must confirm that the unit holders have consented to the proposed re-subdivision and to the proposed allocation of unit entitlement.

22 It is apparent that to be effective, two matters have to be addressed and unanimously approved by the unit holders before the strata company can inform the Registrar of Titles of its consent to the proposed re-subdivision.

23 First is the physical re-subdivision and redefining by an amended plan of what might be described as the real property interests. In the present case it is the identification of those areas of the common property carparks that were to be attached to each respective commercial unit as part of each lot. A plan detailing the physical changes by measurement and survey was one of the documents that was sent to the unit holders on 23 May 2013.

24 The second matter is the re-allocation of the unit entitlement of each unit holder. In the present case the unit entitlement of each owner was set out in the Form 3 attached to the letter of 23 May 2013 with the proposed unit entitlement following the re-subdivision duly certified by Shane Jaeger, a licenced valuer, on 9 May 2013 in accordance with s 14(2) of the Act.

25 There is no genuine dispute that the reference in the notice of the meeting and resolution to 'the details as has been provided in the proposed strata plan of re-subdivision and accompanying notes' were those documents provided under the cover of the letter of 23 May 2013 with reference to the intention to seek approval at the upcoming AGM. Those matters were before the meeting for consideration.

26 The applicants say the issue, in essence, is one of substance rather than form, that is to say, that the form of the resolution was sufficient to embrace both aspects for consideration in s 8A, namely, the proposed plan of re-subdivision (s 8A(b)) and the certificate of unit entitlements (s 8A(h)) in accordance with s 14(2).

27 Unlike other provisions, the Act and regulations do not specify any particular form of resolution that must be approved by the unit holders.

28 In my view, s 8A of the Act sets out what must receive the consent of the unit holders. It does not mandate the form of the resolution to give that consent.

29 The critical issue is whether, the resolution, if carried by a meeting of the unit holders, authorised the strata company to confirm that the company (and its members) had consented to the subdivision and to the allocation of unit entitlements set out in the application.

30 In my view the resolution as presented to the meeting was directed to the approval of the proposed re-subdivision as defined in s 8 of the Act.

31 As noted above, there is no genuine dispute that the documents referred to and provided under the cover of the letter of 23 May, including the Form 3 detailing the unit entitlement of owners after the proposed re-subdivision, were before the meeting for consideration.

32 I am satisfied that the notice of the meeting, including, as it did, the preamble to the proposed resolution, sufficiently identified those documents in respect of the re-subdivision for which approval was being sought. There is no suggestion to the contrary and there was no competing proposal for consideration.

33 The work that was required to be done by the resolution was to authorise the strata company to proceed with a re-subdivision as defined in s 8 in the manner prescribed under s 8A. The documents incorporated into the meeting by reference in the notice included the plan of re-subdivision and the proposed unit entitlements.

34 Insofar as the meeting approved the re-subdivision and authorised the strata company to proceed, by implication it authorised the company to do all that was required to give effect to that resolution by proceeding with the application in the manner required by s 8A of the Act. The unit holders, by their vote in favour of the proposed re-subdivision, also approved the new unit entitlements created. A vote in favour of the re-subdivision necessarily encompassed the product of that process, namely, the resulting unit entitlement following that re-subdivision.

35 I am satisfied that upon its proper construction the resolution was valid and effective for the purposes of an application under s 8 and s 8A of the Act. That is to say, subject to any determination made pursuant to s 51 of the Act, for the purposes of submitting the application for re-subdivision, that the strata company could confirm that, by the resolution carried at the meeting on 27 July 2013, the strata company, by its members, had consented to the re-subdivision and to the unit entitlement set out in the application.

36 It follows that the issue contended by the respondents must fail.

37 I will hear from the parties as to the directions sought in respect of the hearing of the remaining issues for determination.