Maber and Anor and the Owners of "Mill Point" Strata Plan 11391

Case •

[2005] WASAT 241

•

5 SEPTEMBER 2005

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL

STREAM:   COMMERCIAL & CIVIL

ACT: STRATA TITLES ACT 1985 (WA)

CITATION:   MABER & ANOR and THE OWNERS OF "MILL POINT" STRATA PLAN 11391 [2005] WASAT 241

MEMBER:   DR B DE VILLIERS (MEMBER)

HEARD:   ON THE PAPERS

DELIVERED          :   5 SEPTEMBER 2005

FILE NO/S:   CC 2457 of 2005

BETWEEN:   MARGARET MABER

WILLIAM MABER
Applicants

AND

THE OWNERS OF "MILL POINT" STRATA PLAN 11391
Respondent

Catchwords:

Real property - Strata titles - Licence to use common property - Reasonable enjoyment of unit - Refusal to issue licence - Amending by­laws

Legislation:

State Administrative Tribunal Act 2004 (WA), s 81(2), s 92(1), s 94(2)(a)

Strata Titles Act 1986 (WA), s 94, s 77

Result:

Orders made

Category:    B

Representation:

Counsel:

Applicants:     Self­represented

Respondent:     Self­represented

Solicitors:

Applicants:     Self-represented

Respondent:     Self-represented

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

Nil

Case(s) also cited:

Nil

REASONS FOR DECISION OF THE TRIBUNAL: 

Summary of the Tribunal's decision

  1. The applicants, who are proprietors of unit 4 of the strata title complex named "Mill Point", sought an order under s 94 of the Strata Titles Act 1985 (WA) for a licence to enclose their balcony (unless otherwise specified, any reference to a section of an Act refers to the Strata Titles Act 1985 (WA)).

  2. The balconies of the complex are common property although the proprietors have exclusive use thereof.

  3. At an Annual General Meeting on 1998, the proprietors of units 3, 5, 7, 9, 11, 13 and 15 were given permission to enclose a section of their balconies in accordance with a design approved by the respondent.  A by‑law to this affect was registered (Schedule 1 by‑law 20).

  4. The applicants applied in 2004 for a similar by‑law to be registered that would enable them and other proprietors on their side of the complex to enclose their balconies.  The units concerned are numbers 4, 6, 8, 10, 12, 14 and 16 (affected owners).

  5. The applicants contended that the respondent had unreasonably refused their application to enclose their balcony and that the respondent had failed to convene an Extraordinary General Meeting (EGM) as instructed by the Annual General Meeting (AGM), to consider the proposed by‑law.

  6. The respondent contended in response, that it had allowed opportunity for the owners of the affected units to reach agreement on a common design prior to the proposal being submitted to an EGM.  However, due to the failure of the affected owners to agree on a design, the respondent decided not to convene an EGM.

  7. The following order was made:  The respondent must within 30 days from the date of the order convene an Extraordinary General Meeting to consider the enactment of a by‑law that would enable the owners of units 4, 6, 8, 10, 12, 14 and 16 to enclose their balconies on terms similar to Schedule 1 by‑law 20.

Background

  1. The strata company registered a change to its by‑laws in 1998 to enable the partial enclosure of balconies of units 3, 5, 7, 9, 11, 13 and 15.  Schedule 1 by‑law 20 allows the owners of those units "to enclose the north western most section only of their balcony, to a style and design to be approved by the Strata Council after any negotiation that may be necessary with the local shore office.  Cost of the initial installation and future maintenance is to be met by the individual owner."  There is no obligation on any of the owners of these units to enclose his/her balcony.  The applicants tendered photographs of the enclosures that have occurred and the style that has been adopted.  Not all the balconies have been enclosed.

  2. The applicants applied to the respondent for permission to enable the affected owners to also enclose their balconies subject to similar conditions set out in Schedule 1 by‑law 20.  The applicants contend that by enclosing their balconies the affected owners would have the benefit of making more effective use of their balconies; the balconies would be protected from wind; and the windows and door between the living area and balconies could be opened without the wind blowing through.

  3. The applicants allege that their application to enclose their balcony has not received proper attention from the respondent.  The decision by the respondent not to convene an EGM to consider the change of by‑laws amounts to a refusal to grant the licence.  They content that their unit is incapable of reasonable use and enjoyment unless the licence is granted.  Mr Bill Maber suffers from Parkinson's Disease and he is virtually housebound.  They would like to convert the balcony into a type of sun‑room.  At present the balcony is exposed to wind and is of little practical use.  Schedule 1 by‑law 20 already allows owners on the other side of the strata complex to enclose their balconies for reasons similar to those raised by the applicants.

  4. The respondent disputed the allegation that it had unreasonably refused to convene an EGM.  According to the respondent the affected owners have not been able to reach agreement on the appropriate design to enclose the balconies. In the absence of an agreement on an acceptable design, the respondent does not see the value in convening an EGM to consider a change in the by‑laws.  To proceed without clarity of design, would according to the respondent be a waste of time.

  5. The applicants therefore seek the following order:

    "That the Applicants be permitted to enclose the north western most section of their balcony to the design they submitted, that design being in keeping with similar enclosures already completed by 4 other balconies."

  6. The application for relief was lodged under s 77 of the Act.  The applicants did not certify, as is required by s 77B, that the strata company had no by‑laws to regulate the resolution of a dispute.  However, no submissions were received in regard to the existence of alternative dispute resolution by‑laws.  SAT may provide relief from procedural requirements (s 92(1) State Administrative Tribunal Act 2004 (WA)) and the Tribunal is of the view that, in the absence of evidence regarding alternative dispute resolution procedures in the bylaws of the strata company, the matter can be determined.

Enacting a new by‑law to enable balconies to be enclosed

  1. The applicants submitted their application to the respondent to enclose their balcony in a letter dated 24 February 2004.  In the letter they requested that the proposed enclosure of their balcony be placed on the agenda of the Annual General Meeting (AGM) scheduled for 24 February 2004.

  2. The application was discussed at the AGM and the meeting resolved to give permission to the affected owners:

    "to enclose the north western most section of their balcony to a style and design to be approved by the strata council, after any consultation that may be necessary with the local shire office.  The owners of the units are to pursue designs and prepare a by‑law for presentation at a general meeting of the strata company."

  3. Following the AGM, the Council of Owners (Council) had the responsibility to set design guidelines for the enclosures.  The design guidelines set by the Council were similar as to the guidelines accepted for the other units in 1998, namely "windows that complement current windows and that will be easy to clean."  (Refer to the letter by the chairman of the Council, Mr Ron Lutz, dated 26 April 2004).

  4. The Council decided at their meeting of 20 August 2004, to convene an EGM for the purpose of resolving by resolution without dissent to amend Schedule 1 by‑law 20 as follows:

    "The Strata Company gives permission to owners of Units 4, 6, 8, 10, 12, 14 and 16 to enclose the northern section only of their balcony, to a style and design to be approved by the Strata Council after any negotiation that may be necessary with the local shire office.  Cost of the initial installation and future management to be met by the individual owner."

  5. The Council did not convene the EGM to consider the proposed by‑law, but decided that all the affected owners must first agree on the design for the enclosures before the EGM could be convened (refer to AGM Minutes of 13 April 2005).

  6. Due to a lack of agreement between the affected owners on an appropriate design, the Council decided to revoke the decision to convene an EGM (refer to letter from Mr Lutz on 12 November 2004).  According to the chairman of the Council, the design must be agreed between the affected owners "otherwise there is no point proceeding with the By‑law."

  7. This decision by Council was apparently motivated by the desire to save time and cost.

  8. However, in the opinion of the Tribunal the opposite also holds true – if the affected owners had agreed after much effort and possible expense on a design and the EGM rejects the proposed by‑law, all the effort by the affected owners would be for nothing.

  9. The Council therefore placed itself in a circular argument where they required agreement between the affected owners on a design although the legal basis to allow the enclosure had not yet been approved by the EGM.

  10. The decision by the AGM on 7 April 2004 clearly authorised the convening of a general meeting to consider the draft by‑law and for the "style and design to be approved by the strata council …".  At no stage did the AGM authorise Council to delegate its responsibilities by handing the matter back to the affected owners expecting them to work out a design amongst themselves.  Of course the Council can invite proposals from the affected owners, but the ultimate decision regarding design remains that of Council and not any individual owner.

  11. In its correspondence of 26 April 2004, the Council set a basic standard to which the design had to comply, namely "windows that complement current windows and that will be easy to clean."  It would therefore be appropriate for Council to invite proposals on the basis of this criterion and to determine an appropriate design.  However the first step before settling a design would be to implement the decision of the AGM by convening an EGM to consider the draft by‑law.

  12. Section 94(1) empowers the Tribunal to order that common property such as the balconies of the affected owners may be used in a manner and purpose as may be specified in an order. However, before making an order the Tribunal must be satisfied that the unit is "incapable of reasonable use and enjoyment" unless the order is made (s 94(2)(a)) and that the strata company has refused to grant a licence that would enable the applicant to reasonably enjoy the lot. The Tribunal may record such an order under s 115 which would have the effect that the terms of the order were regarded as a new by‑law. In addition, s 81(2) enables the Tribunal to make any order that is ancillary or consequential to the order sought.

  13. The Tribunal is of the view that it would be appropriate, reasonable and practical for the EGM to determine the legal base, if any, for allowing the enclosures and thereafter for issues of design to be dealt with by the Council.

Conclusion

  1. The Tribunal is not satisfied that the requirements for an order under s 94(2) have been met. There has not yet been a refusal by the respondent for the applicant to enclose the balcony. The respondent merely decided not to convene an EGM at this stage. The Tribunal is also not able to determine with the information at its disposal that without the enclosure the applicant would not be able to reasonably use and enjoy the lot.

  2. However, the Tribunal accepts that there may be benefits to enclose the respective balconies and that the affected owners have a reasonable expectation that they would also be afforded the right to enclose their balconies on terms and conditions similar to Schedule 1 by‑law 20.

  3. The merits of the reasons raised by the Council for not convening the EGM can be questioned.  Council was instructed by the AGM to convene an EGM to consider a new by‑law that would enable the affected owners to enclose their balconies on conditions similar to Schedule 1 by‑law 20.  The obvious thing for Council to do was to convene the EGM and allow owners to make a decision.  However, the Council decided to first require the affected owners to agree on a design before it would convene an EGM.  This pre‑condition to convening an EGM seems to be unreasonable and in contrast with the instruction of the AGM.

  4. The AGM anticipated a two-step process similar to the enactment of Schedule 1 by‑law 20 namely –

    (a)The Council would convene an EGM to consider enacting a by‑law similar to Schedule 1 by‑law 20; and

    (b)if the by‑law is approved, for Council to settle the design of the enclosures after consultation.

  5. The respondent should therefore be ordered to comply with the decision of the AGM.

Orders

1.The order sought is dismissed.

2.The respondent must, within 30 days from the date of this order, convene an Extraordinary General Meeting to consider the enactment of a by‑law that would enable the owners of units 4, 6, 8, 10, 12, 14 and 16 to enclose their balconies on terms similar to Schedule 1 by‑law 20.

I certify that this and the preceding [31] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

___________________________________

DR B DE VILLIERS, MEMBER

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