Kasta Nominees Pty Ltd v O'Connor [No 2]
[2017] WADC 3
•20 APRIL 2016
KASTA NOMINEES PTY LTD -v- O'CONNOR [No 2] [2017] WADC 3
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2017] WADC 3 | |
| 11/01/2017 | |||
| Case No: | CIVO:92/2014 | 12, 13, 14, 19 & 20 APRIL 2016 | |
| Coram: | BIRMINGHAM QC DCJ | 20/04/16 | |
| PERTH | |||
| 19 | Judgment Part: | 1 of 1 | |
| Result: | Declaration pursuant to s 51 of Strata Titles Act (1985) made | ||
| 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 Approval of re-subdivision- Requirement for unanimous vote Application for declaration pursuant to s 51 of the Act Factors to be considered Proposed re-subdivision in interests of whole development Declaration made |
Legislation: | Nil |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CIVIL
- 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 - Approval of re-subdivision- Requirement for unanimous vote - Application for declaration pursuant to s 51 of the Act - Factors to be considered - Proposed re-subdivision in interests of whole development - Declaration made
Legislation:
Nil
Result:
Declaration pursuant to s 51 of Strata Titles Act (1985) made
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 : In person
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):
Harvey Fields Private Estates Pty Ltd v 33 Malcolm Street Pty Ltd [2012] WASC 218
Kasta v O'Connor [2016] WADC 16
McHattie v Tuscan Investments Pty Ltd (1997) 18 SR (WA) 231
- BIRMINGHAM QC DCJ:
1 This action concerns the mixed commercial and residential strata title property known as Swan View duly registered pursuant to the Strata Titles Act 1985 (the Act). The applicants seek a declaration that the motion to approve a re-subdivision of the units that had failed to be passed unanimously at the 2013 annual general meeting (AGM) of the company be deemed to have been so passed.
2 On 20 April 2016 during the course of the hearing of the originating summons, at the completion of the first-named first respondent evidence, the first, second, third, seventh, twentieth and twenty-second respondents abandoned their opposition to the application and consented to the orders sought by the applicants being made. They further agreed to pay the applicants costs in the agreed sum of $55,000.
3 As a number of other residential unit holders had entered appearances to the application, notwithstanding the consent to the proposal by those who originally opposed it at the AGM, I considered whether the relief sought in the application was in the interests of all unit holders. For the reasons set out below I was satisfied that the relief sought should be granted and made final orders in respect of the application.
Reasons for decision
4 Swan View is situated on the southern corner of the intersection of Melville Parade and Preston Street, Como. It is a mixed commercial and residential strata title property and is duly registered pursuant to the Act.
5 The strata plan 48343 was registered on 12 October 2009 with plans for the building and specific unit entitlements. The property comprises common property, five commercial units and 29 residential units. The aggregate unit entitlement of all lots is 10,000 comprising a commercial lot entitlement of 4,106/10,000th and an aggregate residential lot entitlement of 5,894/10,000th.
6 The first applicant is the proprietor of two ground floor commercial units (30 and 31) that are presently zoned for use as a tavern or restaurant.
7 The second applicant is the proprietor of three above ground floor lots (32, 33 and 34) that are zoned for use as offices.
8 The respondents are each proprietors of residential lots in the development.
9 The common property includes some 97 car bays. The original developer assigned to the commercial unit holders an exclusive licence to use the common property car bays for 20 years from registration of the strata plan. The right to exclusive use of 9 commercial parking bays (being those numbered 3, 7, 46, 47 and 93 to 97) was assigned to the first applicant and the right to use 78 commercial parking bays (being those numbered 1, 2, 4, 5, 8 - 14, 24 - 45 and 48 - 92) to second applicant.
10 It is common ground that it has not been possible to use the ground floor commercial units (units 30 or 31) as either a tavern or restaurant during the life of the building. The applicants seek to change the zoning of the ground floor units to permit them to be used as offices.
11 The City of South Perth has advised that any proposed change to the current zoning for units 30 or 31 will require additional car bays to be provided. It is accepted that the only space to create further parking is on top of the multilevel car parking building.
12 The applicants wish to allocate those parking bays the subject of the exclusive licence to the commercial unit holders to enable them to construct car stackers on the upper floors and create sufficient car parking bays to meet the requirements of the City of South Perth.
13 The applicants say that the change to the zoning to the commercial units will benefit all unit holders.
14 As the proposed allocation of the car bays from common property to the commercial unit owners effects a change to the strata plan the unanimous approval at a meeting of unit holders is required.
15 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 that 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.
16 The owners were advised that the proposal would be the subject of a resolution to be debated and voted on the then upcoming annual general meeting of the strata company scheduled for 27 July 2013.
17 On 5 July 2013 a notice was issued to unit holders advising that the annual general meeting (AGM) would be held on 27 July 2013. The notice of business to be conducted at the AGM included, inter alia, the proposal for re-subdivision to deal with the allocation of the car bays. The resolution proposed was in the following terms:
Item 6 Special business
6.1 Proposed re-subdivision of strata plan 48343
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.
19 I pause to observe that whilst five unit holders were recorded in the minutes as unfinancial, notwithstanding any by-laws to the contrary they were each entitled to vote on such motion: s 3D of the Act.
20 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.
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.
22 Notwithstanding that s 51(2) of the Act only mandates that notice of the originating summons be served on those who did not, either in person or by proxy, vote in favour of the resolution, seemingly all of the residential owners have been joined to the action.
23 Further, the controversy the subject of the application has been the subject of considerable agitation within the complex such that it is extremely unlikely that there are any proprietors unaware of the proceedings.
24 In the circumstances I am satisfied that the necessary service requirements have been met, and that all persons affected by the application are aware of its existence and precise nature of the relief sought.
25 I am further satisfied that those named respondents who acquired their interest in the strata development after the 2013 AGM have sufficient interest in the proceedings as to have standing to be heard on the application.
26 I turn to the merits of the application.
27 Relevantly, s 3 of the Act defines 're-subdivision' as the meaning given by s 3(5) and s 8(1).
28 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.
29 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.
30 The requirements to give effect to a plan of re-subdivision are contained in s 8A of the Act.
31 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;
(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
…
32 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.
33 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.
34 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.
35 Those residential unit holders who did not support the resolution at the AGM, namely the first, second, third, seventh, twentieth and twenty-second respondents, opposed the relief sought in the application on several ground including, inter alia, the efficacy of the notice of meeting. That issue was heard by me as a preliminary point and determined in favour of the applicants on 5 February 2016: see Kasta v O'Connor [2016] WADC 16.
36 The work that was required to be done by the resolution, if passed unanimously authorised the strata company to proceed with a re-subdivision as defined in s 8 in the manner prescribed under s 8A.
37 I was 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.
38 Upon the substantive hearing, the respondents maintained that they would each suffer detriment from the loss of the value of the car parks that are part of the common property for the benefit of all unit holders. The residential unit holders say that they are entitled to be compensated for the loss of the car bays from the common property.
39 During the course of the hearing of the application, at the completion of the first-named first respondent evidence, the first, second, third, seventh, twentieth and twenty-second respondents abandoned their opposition to the application and consented to the orders sought by the applicants being made. They further agreed to pay the applicants costs in the agreed sum of $55,000.
40 As other residential unit holders had entered appearances to the application and filed affidavits opposing the application, notwithstanding the consent to the proposal by those originally opposed to the proposal, the question remains as to whether the motion should be treated as if it has been carried unanimously must be considered in respect of the interests of all unit holders.
41 In McHattie v Tuscan Investments Pty Ltd (1997) 18 SR (WA) 231, 235, Wisbey DCJ identified the factors to be considered in respect of an application pursuant to s 51 of the Act included:
(i) The extent of the majority in favour of the resolution.
(ii) The benefit to the proprietors, occasioned by the resolution.
(iii) The detriment to the proprietors generally, both immediately and prospectively, by the resolution.
(iv) Any detriment flowing particularly to any proprietor, and more particularly to any proprietor opposing the resolution; and whether the resolution will impinge upon that proprietor to the extent that it could be said to derogate from those proprietary rights which were in the proprietors' contemplation at the time of the purchase by him of a unit.
42 When considering the question of possible detriment likely to be suffered, the extent to which proprietors' voting rights at general meeting may be affected by a re-subdivision is an important consideration. This is recognised in pt V of the Act where a special resolution requires 75% or more of the aggregate unit entitlement of lots in the scheme and 75% or more of the proprietors of lots in the scheme to vote in favour of it to be carried.
43 In Harvey Fields Private Estates Pty Ltd v 33 Malcolm Street Pty Ltd [2012] WASC 218 [125] – [138] Kenneth Martin J considered the effect of a reduced unit entitlement at a meeting of the strata company, in the context of a poll taken for a contentious special resolution. In determining what may constitute material prejudice to unit holders his Honour said:
131. A movement in an alignment of voting power can make a crucial difference on a close vote. The composition of Australian parliaments sometimes displays this phenomenon. But, fundamentally, by Part V of the STA the legislature has enshrined the intrinsic importance of a purchaser's unit entitlement. It does that by requiring the Vendor's notification of variations to unit entitlement (s 69A(c)) in furtherance of its policy aim of protecting purchasers. That is not to say that any numerical reduction in unit entitlement will deliver material prejudice. It will not. But clearly the subject matter of unit entitlement enjoys the legislature's special concern as an identified area of protection for the purchaser. When is the line crossed by a reduction that is enough to connote material prejudice in the facts of a particular case? In my view, the bar should not be set at too high a quantitative level given the partly theoretical nature of the material prejudice evaluation that is required.
(emphasis added)
44 In addition to the factors mentioned, regard should also be had to whether the land had met or satisfied its intended purpose, in whole or in part, in the period since the strata title development was completed. This may be particularly relevant where there have been changes to the zoning or where the previously intended use can no longer be enjoyed by the unit holders (or some of them) due to changes to the environment or social amenity in the vicinity of the subject property. For example, where changes in the immediate neighbourhood are such that the operation of a tavern or restaurant as an approved use is no longer be feasible or acceptable in the area.
The evidence
45 The affidavits filed on behalf of the applicants by Ms Deborah June Whiting, Brett Leslie Jackson and valuer Mr John Martin were supplemented by their oral evidence and tested by cross-examination.
46 Mr Martin said the examined sales evidence did not disclose that the use of the common property carpark upon the expiration of the exclusive licence was reflected in the purchase price paid for the residential units. Whilst Mr Martin accepted that the common property car bays would have some value, he did not regard that to be of any significant moment to the residential unit holders. In his opinion, the only circumstance in which the value attributed to the common property car bays might be realised by the unit holders would be akin to the unlikely event of the destruction of the complex or a sale of all units.
47 Those respondents who had voted against the resolution maintained that the use of the common property car parks was of value to them and a factor considered when originally purchasing their respective units.
48 Whilst I have some grave concern as to the evidence that was proffered on behalf of the respondents, as they now abandon their objection and no longer rely on the same, it is unnecessary for me to make any finding in relation to the veracity of that material.
49 I accept the evidence of Ms Whiting, Mr Jackson and Mr Martin and find as follows.
50 The commercial units have an exclusive use licence for 20 years to 87 of the 97 relevant commercial parking bays on the upper floors of the multilevel car parking building on common property.
51 One commercial unit (unit 30) is zoned for use as a tavern or restaurant, the other commercial units are zoned for use as offices. There has never been a tavern or restaurant at the development.
52 The owner of Unit 30 has sought to change the zoning to permit its use as an office. The resolution proposed to the AGM will enable the commercial unit currently zoned for tavern and restaurant use to be rezoned for use as offices.
53 Itis a requirement of the City of South Perth that if the commercial units are used for office purposes the strata plan must allocate specific bays to each commercial strata unit. When the development was first constructed, allocation of 97 car bays to the commercial units was determined on the basis of a plot ratio of 1:25. The City of South Perth Town Planning Scheme No 6 now require a plot ratio of 1:20 in respect of the allocation of car parking bays for office use. As a consequence any change to the use of the commercial units as offices requires the development provide 16 additional car bays. The only area where the extra car bays could be built is on the common property already allocated to commercial car bays. The applicants propose to erect car stackers on the commercial units, to provide the additional car parking bays required.
54 The resolution proposed will make the entitlement of the commercial unit holders to specific bays equivalent to the entitlement of residential unit holders who are also entitled to specific bays. In substance such proposal reflects the use enjoyed by all unit holders since inception.
55 The operation of the development as a whole with some commercial units is consistent with the original concept plan for the development as understood by all unit holders. The proposed change is consistent with the proprietor's rights in contemplation at the time of purchase. In my view, it is improbable that it was contemplated that at the end of the licence period, the car bays would revert to common property use such that the commercial unit holders would then have been at the mercy of the residential unit holders as to whether they could continue to use their premises at all. That is to say, that the residential owners had the right to determine whether the commercial unit holder had the requisite car bays to permit them to use their offices in accordance with the zoning requirement at the end of the licence period.
56 If such was the case, the residential unit holders could effectively deprive the commercial unit holders of their intended benefit namely the economic use of the commercial property if they could not lawfully operate without access to the subject car bays.
57 I accept that it was always contemplated that those bays the subject of the licence agreement would remain exclusively for the use of the commercial units – subject to the allocation of those bays amongst those commercial units being varied from time to time according to use.
58 I am satisfied that resolving the zoning use is of benefit to the development as it will eliminate the threat of prosecution for breaching zoning obligations that may require the closure of the commercial units.
59 Further, the change in zoning will eliminate the possibility of a tavern or restaurant operating from the affected unit. Such change would be consistent with improved amenity for the development and the likely interests of the residents generally.
60 I am satisfied that the proposal will not impact on the entitlement of each residential unit holder to their own car parking bays and that they will retain access to visitor bays that have been surrendered by the commercial unit holders as part of the proposal.
61 Whilst acknowledging that the proposed re-subdivision will result in a small change to the unit entitlement of all residential units in favour of the commercial unit holders, I am satisfied that it is not a material change.
62 The impact of the re-subdivision in respect of each residential unit holder and consequential reduction in unit entitlement is so slight as to be of little significance. For example, in respect of the first respondent the relative change is 2/10,000th - from to 245/10,000th to 243/10,000th. The nett change in unit entitlement between commercial unit holders and residential unit holders in the proposed re-subdivision is 96/10,000th – less than 1%.
63 I am further satisfied on the evidence that the change in zoning and use of the commercial units will enhance the value of the units generally and further improve the amenity of the area is such that the office units are not vacant for lengthy periods of time.
64 Having regard to the affidavit material and the evidence accepted by me I am satisfied that the re-subdivision is in the interests of the whole of the development and that the declarations sought pursuant to s 51 of the Act should be made.
65 Accordingly, there will be a declaration that the special resolution voted on at the annual general meeting of the unit holders in strata plan 48343 held on 27 July 2013 be deemed to have been passed without dissent.
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