MACKIE and HENDERSON
[2010] WASAT 144
•6 OCTOBER 2010
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: COMMERCIAL & CIVIL
ACT: STRATA TITLES ACT 1985 (WA)
CITATION: MACKIE and HENDERSON [2010] WASAT 144
MEMBER: MR T CAREY (MEMBER)
HEARD: 9 JUNE 2010 FINAL WRITTEN SUBMISSIONS PROVIDED 16 AUGUST 2010
DELIVERED : 6 OCTOBER 2010
FILE NO/S: CC 139 of 2010
BETWEEN: GRAHAM LAURENCE MACKIE
Applicant
AND
GRAEME JOHN HENDERSON
KANDY JANE HENDERSON
Respondents
Catchwords:
Strata titles Bylaws Whether invalid Whether procedural requirements met 'Unanimous resolution' Exercise of discretion Effect of agreement between only two proprietors at time of purported resolution Whether bylaws imposing height restrictions not made in accordance with Strata Titles Act 1985 (WA) because inconsistent with the strata company's power to make bylaws Whether bylaws not made in accordance with the Strata Titles Act 1985 (WA) to the extent that they imparted in proprietor right to approve and object to structural alterations in surveystrata scheme Whether bylaws not 'in the interests of all proprietors in the use and enjoyment of their lots'
Legislation:
State Administrative Tribunal Act 2004 (WA), s 9
Strata Titles Act 1984 (WA), s 3, s 7, s 7A, s 7A(2), s 7A(3)(a), s 7(5), s 31C, s 35(1), s 36A, s 42(1), s 42(2), s 42(4), s 83(1), s 93, s 93(2)(c), s 93(c), s 103G, s 115, Sch 3
Result:
Successful in part
Category: B
Representation:
Counsel:
Applicant: Mr R Kronberger
Respondents : Mr J Young
Solicitors:
Applicant: Atkinson Legal
Respondents : Frichot & Frichot
Case(s) referred to in decision(s):
Grant and The Owners of Rosneath Farm Strata Plan 35452 [2006] WASAT 162
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
The applicant sought the invalidation and repeal of a series of bylaws notified on a surveystrata scheme in 1999 which included the imposition of height restrictions on any future alterations to buildings on the applicant's lot. He did so on a number of grounds, and relied on a number of arguments to substantiate each ground. The grounds included alleged failures to comply with the requirements of the necessary unanimous resolution for the adoption of the bylaws, inconsistencies said to exist between the bylaws and the provisions of the Strata Titles Act 1985 (WA), and a claim that the bylaws were not in the interests of all the proprietors in the use and enjoyment of their lots given that strict compliance with them would require the demolition of the applicant's residence.
The Tribunal considered each argument advanced but was unable to accept any of the applicant's grounds, save that it found two of the bylaws to be inconsistent with the provisions of the Act governing structural alterations to surveystrata lots. Specifically:
1)Having found that the formal requirements for adoption of the bylaws were not complied with, the Tribunal refused, in the exercise of its discretion, to invalidate them. It did so because the then proprietors reached a concluded agreement for adoption of the bylaws as part of a package for the conversion of the then strata scheme to a surveystrata scheme.
2)The Tribunal rejected the applicant's claim of inconsistency of the bylaw imposing the height restrictions with the provisions of the Act relating to structural alterations in strata schemes, because the restrictions applied only after the conversion to surveystrata. It rejected a similar claim in respect of the Act's provisions in the context of a surveystrata scheme because, on a correct construction of those provisions, they did not apply in the present case. However, the Tribunal struck down two of the bylaws purporting to vest one of the proprietors with powers to approve and object to proposed alterations as inconsistent with the same provisions.
3)The Tribunal rejected the argument that the bylaws are not in the interests of all the proprietors because the demolition of the applicant's house was merely a theoretical and not a realistic possibility. Given the 1999 agreement comprising a 'package' of conversion to surveystrata and adoption of the bylaws, the Tribunal found the continuation of the bylaws, in the form contemplated in 1999, were in the interests of both proprietors.
Accordingly, the Tribunal made orders declaring two bylaws invalid and for their repeal, but otherwise dismissing the application.
Factual background
This application concerns a twolot residential surveystrata plan located in the Perth suburb of Bicton, a short distance from the Swan River. The land slopes away towards the river, resulting in the lot that is further from the river being higher than the other lot.
Mr Graham Mackie is the owner of Lot 1 in surveystrata plan 6006 (surveystrata plan). The parcel comprising the surveystrata plan was previously the subject of strata plan 6006 (strata plan).
The strata plan consisted of a building containing two lots divided by a common wall. The building as shown in the strata plan is centrally located within the parcel, and the remainder of the scheme, including carports indicated as being for the use of Lot 1 and Lot 2 respectively, was common property. The strata plan consisted of only a ground floor plan.
Mr Graeme Henderson and Mrs Kandy Henderson (the Hendersons), are the owners of Lot 2 in the surveystrata plan. They were also the owner of a lot (also Lot 2) in the strata plan from 14 August 1978.
Sometime during 1998 1999, the former owners of Lot 1 in the strata plan, Mr and Mrs Howard (the Howards) decided to sell their lot. A potential purchaser of the Howards' lot required, by way of a condition of the sale to them, that the strata plan be converted to a surveystrata plan. The Howards asked the Hendersons whether they would agree to such a conversion. The Hendersons' initial response was not favourable. They expressed to the Howards their concern that they suspected that a conversion would dilute the protection of views from within their lot towards the river which they then enjoyed.
Mr Henderson gave evidence of a series of restrictive covenants which were placed by the developer of the strata scheme on three properties between the strata parcel and the river. Although the overall object was asserted by Mr Henderson as being to protect views, including those of his lot, there is no evidence of any restrictive covenant having been placed on the former strata Lot 1 for the benefit of former strata Lot 2. Rather, the protection of views which the Hendersons enjoyed, in the sense of an embargo or limitation on structural works occurring on Lot 1 having a visual impact on Lot 2, existed by reason of the restrictions imposed by the Strata Titles Act 1985 (WA) (ST Act) on structural works proposed by a proprietor of a lot in a strata scheme to the lot.
It appears that the Howards persisted with their requests for a conversion to surveystrata. The Hendersons ultimately agreed to the conversion, but only after they were satisfied that their desire to protect their existing views was catered for to their satisfaction by the parties' agreement that certain bylaws dealing with structural alterations and height limitations would apply to the proposed surveystrata scheme.
I will return to the history of the preparation of the bylaws later in these reasons.
On 11 March 1999, the conversion from strata plan to surveystrata plan occurred, upon registration of the conversion notification by the Registrar of Titles (Notification H49495). On the same date, there was also registered a notification of change of bylaws (Notification H49496) which added five new bylaws (additional bylaws) to the 'standard' bylaws applying to the scheme by reason of s 42(2) of the ST Act. A copy of Notification H49496 is attached to these reasons (Attachment A).
Mr Mackie now wishes to proceed with alterations to his lot. For present purposes, the relevant alteration is the addition of a bedroom at a height not previously built on the lot, described by him as 'a small structural upper floor addition to [his] Lot 1 residence'. The proposal has been objected to by the Hendersons as being in breach of the bylaws of the stratasurvey scheme, and in particular, the height restrictions referred to in Bylaw 16(b), being one of the additional bylaws. Mr Mackie's application seeks orders under s 93 of the ST Act declaring that the additional bylaws are invalid on a variety of grounds, and for their repeal.
Issue for the Tribunal
Section 93 of the ST Act states that on the making of an application under s 93(1) of the Act (that is, the application of any person entitled to vote at a meeting of a strata company for an order under s 93), the Tribunal may make orders of the character sought in this case if satisfied that the bylaw:
(a)was made without power;
(b)was not made in accordance with the Act or the regulations or any other requirement that ought to have been observed; or
(c)should not have been made, having regard to the interests of all proprietors in the use and enjoyment of their lots or the common property.
Mr Mackie relies upon a number of grounds to invoke the Tribunal's power under s 93 of the ST Act. It is my task to determine whether any of the asserted grounds of invalidity of the additional bylaws should be upheld. That task has not, with respect, been assisted by the manner in which the case for the applicant has been conducted, which is a matter addressed at the end of these reasons. I can only express the hope that I have identified correctly all the substantive grounds upon which Mr Mackie has sought to rely.
Requirement of unanimous resolution not met s 93(2)(b) of the ST Act
Mr Mackie's first ground of invalidity of the additional bylaws concerns the requirement found in s 42(2) of the ST Act for the addition of Sch 1 bylaws (as the additional bylaws purport to be) by way of unanimous resolution in the case of a twolot scheme.
The expression 'unanimous resolution' is defined by s 3 of the ST Act. Relevantly for present purposes, its meaning is:
a resolution that is passed unanimously at a duly convened general meeting of the strata company
(i)of which at least 14 days' notice specifying the proposed resolution has been given; and
(ii)at which all persons entitled to exercise the powers of voting conferred under the ST Act are present and vote, either personally or by proxy …
According to Notification H49496, the strata company certified that the required unanimous resolution:
was passed at a meeting of the strata company on the 23[rd] February 1999 which became unconditional on the 23[rd] Feb[ruary] 1999.
As Mr Mackie's written submissions point out, the references to the month of February are both handwritten alterations of the original typewritten 'March', although little, if anything, appears to flow from this. Rather, an alleged impossibility of compliance with the notice requirement in the case of a unanimous resolution and the alleged failure to hold a meeting are relied upon as being fatal to the purported adoption of the additional bylaws.
No minutes of a meeting recording the passing of a unanimous resolution for the adoption of the additional bylaws have been produced. This is perhaps not surprising in the case here of a twolot scheme, in respect of which the strata company is not required to keep minutes of meetings: s 36A of the ST Act. What I am left to consider, then, are the terms of the notification document and other evidence going to the events of February/March 1999.
Mr Graeme Henderson, the first respondent, made a written witness statement. He also attended the hearing for the purpose of crossexamination, although his crossexamination was very limited and did not extend to his evidence of the events of 1999 to which I am about to refer, which was unchallenged.
Mr Henderson's statement explains certain dealings that he had with the Howards' surveyor, Mr Millar, who had been engaged to perform the surveying work for the proposed conversion to surveystrata. In particular, in January or February 1999, Mr Millar attended with the Hendersons in the 'back yard' of their property and also inside their residence. The Hendersons indicated the angle of decline necessary for building and vegetation height restrictions, such that their then existing views would be preserved. They also read from a document which included a requirement that any alterations or additions to the buildings on Lot 1 required the consent of the owners of Lot 2.
Mr Millar's response was that he would develop a plan which incorporated building height restrictions for the neighbours' lot to existing heights.
According to Mr Henderson's statement, Mr Millar completed his survey work 'and provided us with a sketch plan on an identification certificate dated 17 February 1999'. The Hendersons were concerned that the plan did not contain an elevation showing sightlines; rather, levels showing certain heights above the Australian Height Datum (mean sea level) were indicated. Mr Millar told them that the height restrictions were as they required and that their views were preserved in the plan.
The Hendersons remained unconvinced. Mr Millar proceeded to engage Mr Anderson, of a strata title property development and documentation firm, who was reputedly the exRegistrar of the Titles Office, 'to draw up bylaws which would protect our views'. It would appear that Mr Henderson was comforted by assurances he received from Mr Anderson when he spoke with him 'sometime after 11 February 1999'.
On 26 February 1999, Mr Anderson faxed him draft bylaws for the Hendersons' comment. The draft bylaws were in the form of a draft Form 21 notification of change of bylaws, and attached a sketch plan prepared by Mr Millar dated 17 February 1999 which was different from the sketch plan previously supplied by Mr Millar, also dated 17 February 1999, to which I have referred.
On 2 March 1999, in a handwritten letter to Mr Anderson, the Hendersons returned the draft Form 21 with some suggested changes, the covering letter referring to the changes made and seeking an explanation from 'Alistair' (Mr Millar) regarding the new sketch plan.
The Form 21 which became Notification H49496 appears, on its face, to have had the common seal of the strata company affixed on 23 February 1999 in the presence of Mr Howard and Mr Henderson. Mr Henderson confirms his signature, although he denies that he was present at the time that the common seal was affixed. According to Mr Henderson, the notification document was backdated to 23 February 1999 'sometime after 4 March 1999'. This date, 4 March 1999, is the date of a further letter from Mrs Henderson to Mr Anderson, which referred to the Hendersons' assumption that 'the form 38 and 39s', being the documents which they had been provided in draft for the conversion to a surveystrata scheme, could not go ahead without the adoption of the additional bylaws.
A letter from a settlement agent dated 11 March 1999 to Mr Henderson advised that the Forms 21, 38 and 39 were lodged at the then Department of Land Administration, and enclosed copies of the three forms, each of which was signed by the Howards and the Hendersons. Based on Mr Henderson's evidence and this letter, it would appear that the forms were signed sometime between 4 March 1999 and 11 March 1999.
Bearing in mind the evidence contained in Mr Henderson's statement, Mr Mackie advanced the following propositions:
•It was not possible to have given notice of any proposal to adopt the additional bylaws unless the meeting was called for sometime at least 14 days after the date of Mr Anderson's certificate (17 February 1999). This would mean a date not earlier than 4 March 1999.
•The first draft of the proposed bylaw was not provided by Mr Anderson until 26 February 1999. However, that draft attached a sketch plan different from the plan previously provided, without any indication as to what the differences were or which of them the Hendersons agreed with.
•As there was no settled form of the proposed bylaws as at 4 March 1999, the earliest date upon which the required meeting could be called was 20 March 1999, by which time the Howards were no longer proprietors of Lot 1, and therefore not entitled to attend or vote at a meeting of the strata company, nor to witness the affixing of the strata company's common seal.
Mr Henderson's evidence points to there having been no notice given of a general meeting of the strata company as required. Although it was argued for the Hendersons that Sch 1 Bylaw 11(5) requires that only the general nature of special business is required, so that the notice in this case did not need to include the precise form of the additional bylaws in their final form, this does not, in my view, take into account the particular requirement, under the 'unanimous resolution' definition, that the notice specify the proposed resolution. In any event, there is no evidence of any notice given of any meeting, much less the substance of such a notice.
The evidence of Mr Henderson also indicates there was no identifiable meeting, as opposed to a series of negotiations involving the Howards, the Hendersons, and the Howards' agents (Mr Millar and Mr Anderson), which resulted in an agreement whereby the conversion from strata to surveystrata was to occur on the basis that the additional bylaws would apply to the surveystrata scheme.
I find, on these two grounds, that the case for procedural deficiency in respect of the additional bylaws registered on the surveystrata scheme has been made out. There having been no valid notice of a meeting, and no meeting held, I also agree that it was impossible for there to have been the required 14 day interval between notice of the proposed resolution for the adoption of the additional bylaws and any meeting to consider such a resolution.
Although the finding of procedural deficiency is a sufficient condition for orders under s 93 of the ST Act to be made, the use of the word 'may' in s 93(3) connotes that the Tribunal retains an overall discretion based on the particular circumstances of the case before it. It is clear, having regard to the evidence to which I have referred, that the Howards and the Hendersons, who were at the time the only proprietors of lots in the strata scheme, reached a concluded agreement to effect a conversion to surveystrata, and, at the same time, to adopt the additional bylaws, relevantly, in order to limit the heights of buildings and other potential obstructions to the then current levels. The Hendersons would not have agreed to the conversion had the additional bylaws not been agreed. Their requirement that the additional bylaws be part of the bylaws of the surveystrata scheme was based upon their understanding that the conversion would result in the removal of their right, as proprietors in a strata scheme, to object to extensions affecting their outlook to the river, and that their right in that regard would be replicated through the device of the additional bylaws.
Mr Mackie's recent response to the Hendersons' written submissions raises the question whether the strata company's preconversion bylaws, or the ST Act, imparted the Hendersons with any ability to 'protect their views'. It appears that their ability to do so was limited to their right, as a proprietor of a stratatitled lot, to raise one of the permissible objections to a proposal (under s 7(5) of the ST Act). The additional bylaws, on their face, go further than this. In particular, Bylaw 16(b) prevents the proprietor of Lot 1 from erecting any building in excess of specified height limits, which is not one of the s 7(5) grounds. I will, later in these reasons, deal with Mr Mackie's claims that the content of the bylaws is contrary to the provisions of the ST Act and subject to invalidation and repeal on that basis.
The stark fact which arises on the evidence is that, without the additional bylaws forming part of the bylaws of the survey-strata scheme, there would have been no conversion to surveystrata. Regardless of whether the additional bylaws provided protection to the proprietor of Lot 2 in excess of what existed previously, they were the price agreed to by the Howards for the conversion. Further, the price extracted was to inure regardless of the ownership of Lot 1 it was to 'run with the land' because otherwise, its benefit would be lost the first time Lot 1 changed hands. To underscore the point, it was negotiated at a time when Lot 1 was about to be sold.
Mr Mackie's application seeks the repeal of the additional bylaws, but not the conversion itself. He points out that this Tribunal does not have jurisdiction to repeal the conversion. That may be true, but in my view, in the exercise of its discretion under s 93 of the ST Act, the Tribunal ought not permit the benefit secured by Mr Mackie's predecessor in title (the conversion) to remain without the price extracted in the circumstances I have described to also remain. To do so would be manifestly unfair.
For the above reasons, I decline to grant the application on the ground established by Mr Mackie that the requirement of unanimous resolution in relation to the adoption of the additional bylaws was not met.
Additional bylaws not in accordance with the ST Act requirements for structural erections and alterations s 93(2)(b) of the ST Act
Mr Mackie contends that s 93(2)(b) of the ST Act applies on the facts, because the additional bylaws are inconsistent with the bylaw making power of strata companies under s 42(1) of the ST Act.
Section 42(1) of the ST Act provides:
A strata company may make bylaws, not inconsistent with this Act, for
(a)its corporate affairs;
(b)any matter specified in Schedule 2A; and
(c)other matters relating to the management, control, use and enjoyment of the lots and any common property.
It is submitted that, to the extent that the additional bylaws purport to impose a height restriction on structures on parts of surveystrata Lot 1, they are inconsistent with the ST Act provisions dealing with the erection of, or alteration to or extension of, a structure on a surveystrata scheme found in s 7A of the ST Act. That provision is as follows:
Structural erections, alterations and extensions restricted, survey‑strata schemes
(1)This section does not apply to a lot in a strata scheme.
(2)The proprietor of a lot shall not cause or permit
(a)any structure to be erected; or
(b)any alteration of a structural kind to, or extension of, a structure to be made,
on his lot if on completion of the work the structures on the lot will not conform to plot ratio restrictions or open space requirements for the lot, except
(c)with the prior approval of the proprietor of the other lot in the case of a survey‑strata scheme in which there are not more than 2 lots (not including lots designated as common property lots); and
(d)in any other case with the prior approval, expressed by resolution without dissent, of the strata company.
(3)For the purposes of subsection (2) the plot ratio restrictions or open space requirements for a lot are
(a)those provided for by the bylaws of the strata company; or
(b)in the absence of any such provision, those that represent the pro rata entitlements of or requirements for the lot calculated on the proportion that the area of the lot bears to the area of the parcel.
(4)In this section
structure includes any prescribed improvement.
A distinction is drawn between the permissible grounds upon which objection to a proposal may be raised in strata schemes, which include that the proposal is in breach of a bylaw, and the grounds available to challenge such a proposal by a lot owner in a surveystrata scheme, which do not. For a strata company of a surveystrata scheme to allow a bylaw imposing height restrictions, Mr Mackie contends, is to contradict the limited grounds of objection to which s 7A of the ST Act refers, namely, that the resulting structures do not conform to plot ratio restrictions or open space requirements for the lot. The distinction between the two types of scheme is said to be emphasised by the operation of s 103G of the ST Act, which empowers the Tribunal to make orders, in relation to a strata scheme, requiring a proprietor who has engaged in unauthorised structural work to remove the resulting structure or alteration. No such provision exists in relation to surveystrata schemes.
In my view, Mr Mackie's contention is based upon an incorrect reading of s 7A of the ST Act. Unlike s 7 of the Act, applicable to strata schemes, which deals with all proposals for structural erections, alterations or extensions which have not been approved by every other proprietor, and limits the grounds of objection to the grounds referred to in s 7(5) of the ST Act, s 7A of the Act is concerned only with proposals which would result in a structure which does not conform to plot ratio restrictions or open space requirements for the lot. If it applies, the prior approval of the proprietor of other lots is necessary. If not, there is no requirement under the ST Act that the other proprietors' approval be obtained. This would not mean, however, that there might not be a nonstandard bylaw of the strata company imposing some requirement or limitation upon the proposal, provided that the bylaw falls within the legitimate scope of matters upon which the strata company is permitted to make bylaws. I note that this accords with the views of Senior Member Raymond in Grant and The Owners of Rosneath Farm Strata Plan 35452 [2006] WASAT 162 (Grant) at [96] [98]. In Grant, a number of controls on structural works imposed by bylaws in a management statement applicable to a surveystrata scheme were found not to be inconsistent with s 7A of the ST Act, and not invalid on that basis.
The reliance placed upon s 103G of the ST Act does not advance Mr Mackie's contention. To the extent that the relevant limitation is found in a bylaw, any breach would necessitate action by the strata company in accordance with its duty under s 35(1) of the ST Act bylaws, by way of an application to the Tribunal under s 83(1) of the Act. No section equivalent to s 103G of the ST Act is thus required.
It remains necessary to consider each of the additional bylaws in order to determine their legitimacy when tested against the strata company's bylaw making power. That power exists under s 42(1) of the ST Act, which is set out above.
Bylaw 16(a) prohibits the proprietor of Lot 1 from altering any buildings or constructing any new buildings upon the lot without the approval of the proprietor of Lot 2. In circumstances where the ST Act makes general provision, in the case of a strata scheme, for approval of other proprietors, but, in the case of a surveystrata scheme, such approval is required only in the limited cases referred to in s 7A(2) of the Act, a presumption arises against the existence of any such requirement in other cases. This presumption is supported by the extrinsic Parliamentary materials upon which Mr Mackie relied containing clear references to an intention that the consent of other proprietors to erecting, altering or extending structures on a surveystrata lot would be required only in the limited cases now referred to in s 7A(2) of the ST Act. On this construction, which I accept, a requirement in a bylaw for approval by the other proprietor as appears in Bylaw 16(a) is inconsistent with the ST Act and subject to invalidation and repeal under s 93 of the Act.
Bylaw 19, which provides for a limited right (without reference to s 7A(2) of the St Act) to object to alterations to buildings and construction of new buildings on a lot, is invalid and should be repealed for the same reason.
By-law 16(b), which prevents the proprietor of Lot 1 from allowing anything contained within Lot 1 to exceed stipulated height restrictions, including but not limited to trees, vegetation and any 'ariel [sic] or transmitting device', was subject to attack by Mr Mackie based on a number of further claims of alleged inconsistency with the ST Act.
First, it was submitted that the effect of the bylaw is to change the upper horizontal boundary of Lot 1. The fact that the misdescription of the height restrictions which resulted, on a literal interpretation, in the majority of the residence existing on Lot 1 both in 1999 and today being outside the permitted height range (being a separate ground of application under s 93(2)(c) of the ST Act, to be dealt with below) brought this objection into stark relief.
In my view, this contention fails. The bylaw imposes a limitation on use. It does not have any impact upon the boundaries of the lot. Further, the misdescription of the heights does not change the correct characterisation of the subject matter of the bylaw.
Second, Mr Mackie submitted that Bylaw 16(b) was adopted when the parcel was the subject of a strata plan, and therefore breached s 42(1) of the ST Act because it purported to override the provisions of s 7 of the Act applicable to strata schemes. But By-law 16(b) was designed to operate only after the conversion to surveystrata had occurred, and, as Mr Mackie has acknowledged, the conversion was recorded on the title before the additional bylaws.
Third, it was submitted that the differences arising from a comparison of the preconversion strata lots and the postconversion surveystrata lots meant that bylaws intended to operate after the conversion occurred could only be passed by the required unanimous resolution at a meeting of the strata company of the survey-strata scheme. This was because, it was said, there was no relation between the different pairs of lots. However, Mr Mackie did not explain why two lot owners resolving to convert a strata scheme in such a way that each became the owner of a (different) lot in the future surveystrata scheme could not, in reliance upon that devolution of their proprietary interests, also resolve for the addition of particular bylaws upon the conversion taking place. He did not cite any authority to support the requirement of a fresh resolution of the proprietors post conversion, and I am not aware of any. Common sense dictates that this should be possible in order to achieve the type of mutually beneficial outcome which arose on the facts of this case.
Fourth, although I recognise that it is doubtful whether the defects I am about to refer to can be categorised as rendering the additional bylaws invalid on account of their inconsistency with the ST Act, Mr Mackie relied upon a number of alleged defects in the drafting of the additional bylaws in order to demonstrate their invalidity, including:
•The reference in Bylaw 16(b) to 'the height restrictions as set in Area "A" and Area "B" on the strata/survey strata plan', when no height restrictions appear on the stratasurvey plan.
•The sketch plan referred to in Bylaw 16(b) as the other repository of height restrictions specifically refers to 'Strata Lot 1' and 'Strata Lot 2'.
•Bylaw 17 refers to 'Redevelopment of the surveystrata lots', but as at the date of the notification document, there were no surveystrata lots.
•Bylaw 19(b) refers to 'the common property lot', when there was no common property lot as at 23 February 1999, nor is there now.
No explanation is given as to why any of the examples of infelicitous drafting upon which Mr Mackie relies supports one or other of the permitted grounds under s 93(c) of the ST Act. In a proper case, it might be found, on construing a bylaw, that the bylaw is contrary to a provision of the ST Act, or alternatively, that to give effect to the bylaw would not be in the interests of all proprietors because, for example, it is unworkable, or may have unintended and undesirable consequences. I am unable to make any such finding on the basis of the alleged defects in the bylaws relied upon by Mr Mackie. In response to each of the four examples referred to above:
•The fact that there are no height restrictions appearing on the stratasurvey plan does not render the bylaw unworkable, given that the bylaw refers also to the sketch plan attached to the notification, and such plan is duly attached.
•The references to 'Strata Lot 1' and 'Strata Lot 2' need to be considered against the contradictory references in the same document to 'survey strata lots 1 & 2'. Clearly, one (the latter) is correct and the other incorrect.
•Given that the additional bylaws were designed to operate in a postconversion context, the reference to 'Redevelopment on the survey strata lots' is correct.
•I have already found Bylaw 19 to be invalid, albeit for other reasons.
This leaves Bylaw 18 and Bylaw 20. As far as I can see, Mr Mackie has raised no specific complaint in relation to either bylaw. Bylaw 18, dealing with 'Construction standards', falls within the legitimate scope of the strata company's bylaw making power, and does not conflict with any provision of the ST Act that I can identify. Bylaw 20, 'Plot ratio of lots', is specifically authorised by s 7A(3)(a) of the ST Act. I can see no basis upon which either bylaw can be impugned.
Other irregularities with notification of additional bylaws s 93(2)(b) of the ST Act
Apart from the contentions based upon impossibility of compliance with the requirements for a unanimous resolution and the drafting issues with which I have dealt, the validity of Notification H49496 is challenged based on the evidence in Mr Henderson's statement that the common seal of the strata company was not affixed in his presence, and that it was not signed on 23 February 1999 but was 'backdated' to that date at a time on or after 4 March 1999, when he was satisfied with the proposed changes.
The need for the notification document arises under s 42(4) of the ST Act, which states that no additional bylaw has effect until the strata company has, not later than three months after the passing of the resolution for the additional bylaw, lodged a notice of the additional bylaw in the prescribed form with the Registrar of Titles. The form prescribed for the purpose is Form 21 in Sch 3 to the ST Act.
For the same reasons that any technical deficiency affecting the resolution for the adoption of the additional bylaws is overcome on the basis that the resolution reflected the unanimous agreement of the owners at the relevant time, technical deficiencies identified in respect of the document providing notice of the resolution to the Registrar of Titles must also give way to the extent that the notification reflects the same agreement. The additional challenges to the validity of the Form 21 notification document must therefore fail.
Effect of additional bylaws requiring demolition of proprietor's residence s 93(3)(c) of the ST Act
The parties are in agreement that the height restrictions identified in the 'identification certificate', attached to the notification of change of bylaws and identified in the notification as 'the sketch plan attached herewith', are erroneous. As previously stated, one of the objectives of the Hendersons and the Howards was to preserve building heights to the levels which attained in 1999. It turns out that the descriptions of the height restrictions described in the identification certificate are inconsistent with this intent, and that, in fact, by reason of errors in the survey performed in 1999, compliance with those restrictions would require the demolition of Mr Mackie's residence. This result, Mr Mackie argues, can hardly be in the 'interests of all proprietors in the use and enjoyment of their lots', and therefore orders under s 93 of the ST Act should be made on the basis that s 93(3)(c) of the Act applies.
In my view, bearing in mind the clear objective of the additional bylaws to preserve the building heights attaining in 1999, it is inconceivable that any court or tribunal would, if called upon to determine whether Mr Mackie's residence should be demolished based on the erroneous references in the identification certificate, require such demolition. The remedy for such obvious errors is not, however, necessarily the repeal of the bylaw incorporating by reference the identification certificate. It will depend on the intention of the parties moving for the adoption for the bylaw in the first place. In turn, that intention may inform the content of the interests of proprietors in the use and enjoyment of their lots when a bylaw affecting the use and enjoyment of lots by proprietors is being considered.
The intention here was to preserve views enjoyed by the proprietor of Lot 2, by proscribing any structure on Lot 1 beyond the dimensions of the residence on that lot as they were in 1999, as part of a package which included the conversion to surveystrata. Although the misdescription of the height restrictions has resulted in a failure of the additional bylaws to carry into effect the intention of the proprietors in 1999, their entire repeal would also run counter to that intention. Rather than repealing the erroneous bylaws, the solution to the acknowledged problem with the height misdescriptions in the additional bylaws is to amend them so as to substitute height restrictions consistent with the original intent. The Hendersons have provided the report of a surveyor which suggests how this may be done, and undertake to vote in favour of a resolution to amend the bylaws to the necessary extent. This is a matter which must, at least in the first instance, be dealt with by the strata company. Assuming this occurs, it would also provide an opportunity to rectify the other drafting errors.
A separate but related contention of Mr Mackie is that to impose height restrictions in respect of the use of the lot of one proprietor only and not both cannot be regarded as consistent with the interests of both proprietors. It is suggested that the observations of Senior Member Raymond in Grant at [93] [99] require that the bylaws which are within the strata company's power to make must be ones that apply equally to every lot in the scheme. I can find no such requirement in the paragraphs cited.
Perhaps of more relevance to the contention currently under consideration are the passages in Grant at [100] [104], dealing with the submission of the applicant in that case that some of the bylaws were invalid because they purported to or would have the effect of restricting a proprietor's use of common property beyond what is required by the strata company's duty to control and manage the common property for the benefit of all the proprietors. The Senior Member's response was to indicate that, although a bylaw may have the effect of restricting a proprietor's rights in respect of common property, it may still be regarded as being in the interests and for the benefit of all the proprietors where a corresponding benefit is seen to arise. The interests of the proprietors must be considered in a global sense, rather than fixating upon the beneficiary or beneficiaries of particular bylaws in isolation.
Applying such an approach to the present case, it is true that the Hendersons are the sole beneficiaries of the height restrictions imposed by the additional bylaws. But Mr Mackie continues to enjoy the benefits of the conversion to surveystrata for which his predecessor in title, the Howards, agreed to the additional bylaws. As such, the contention that the additional bylaws are subject to repeal on the ground appearing in s 93(3)(c) of the ST Act must be rejected.
Inability of strata company to impose height restrictions for buildings on survey-strata lots or to impose different restrictions on different parts of the same surveystrata lot s 93(3)(a) of the ST Act
I have already found against Mr Mackie on whether bylaws imposing building height restrictions are subject to repeal because the effect is to redefine the upper boundary of the lot. The difficulty with such a suggestion is that it confuses the use of the lot with the definition of its boundaries. Mr Mackie's related submission that it is not possible to impose different height restrictions on the same lot appears to be based on the same confusion. Whether or not it is possible for a surveystrata lot to have a horizontal boundary consisting of different height levels, there is, to my mind, no reason why a bylaw cannot regulate the use of a lot by imposing different building height limitations upon different parts of the lot as Bylaw 16(b) purports to do.
Proposed works outside of areas subject to height restrictions
It was suggested on behalf of Mr Mackie that the additional bylaws have no application to the proposed extension works. Of course, if this contention were correct, it would affect the position significantly, as it would mean that the building works proposed to be performed were not subject to attack as contravening any bylaw. This is not, however, something of which the Tribunal is seized. The application which I must determine is limited to the issues of possible invalidity of the additional bylaws under s 93 of the ST Act.
Conclusion
For the reasons I have expressed, Mr Mackie's application is successful only to the extent that I have found that two of the additional bylaws (being Bylaw 16(a) and Bylaw 19) are invalid and should be repealed. The remainder of the additional bylaws are valid, although, as I have mentioned, their possible amendment should be a priority for the strata company.
Applicant's conduct of the proceeding
In this case, I have found it necessary to make some observations regarding the conduct of the applicant's case for reasons which will hopefully become apparent.
Until the hearing on 9 June 2010, the principal document setting out Mr Mackie's grounds and submissions was the 'Grounds' document attached to the application. On 29 April 2010, I directed the respondents to file a statement of issues facts and contentions, which they did on 10 May 2010. The applicant filed a 'Response' to that document on 13 May 2010.
On the morning of the hearing, which occurred on 9 June 2010, the applicant filed 'Submissions for hearing'. This document was directed solely to the issue of whether the test under s 93(3)(b) of the ST Act was satisfied, in the case of the additional bylaws, based on the various failures to comply with the procedural requirements. In a virtual postscript, the document stated that if the Tribunal was not prepared to grant the application on the basis of s 93(3)(b) of the ST Act, the applicant would provide additional oral or written submissions in relation to the other grounds available under s 93 of the Act.
The hearing, the date of which was fixed by the order of 29 April 2010, was intended to be the final hearing, at which all issues between the parties would be ventilated. When this was pointed out at the start of the hearing, counsel for Mr Mackie noted that the Tribunal is not a court, which was put as a reason why the course contemplated by the 'Submissions for hearing' postscript might be adopted in this case. The argument has no merit. I am not aware of tribunals, and certainly this Tribunal, engaging in the fragmentation of issues in the manner suggested in the applicant's response which courts would never countenance. Indeed, to do so would in most cases simply lead to unnecessary delay, in direct contradiction of one of the Tribunal's main objectives, under s 9 of the State Administrative Tribunal Act 2004 (WA), to act as speedily as is practicable and minimise the costs to the parties.
Counsel for the applicant limited himself, in oral submissions at the hearing, to elaborating on his s 93(3)(b) submissions. Clearly, he was not in a position to deal with the other grounds referred to in the 'Grounds' document. At the end of the hearing, I directed the respondents to file certain further evidence, the applicant to file 'submissions addressing the further four s 93 grounds' by 23 June 2010, and the respondents to file written submissions on all grounds by 7 July 2010. The reference to 'further four s 93 grounds' was to the following grounds under s 93 of the ST Act which were not argued at the hearing:
•the purported imposition of the building height restrictions was inconsistent with the ST Act;
•the additional bylaws should not have been made because they required the demolition of Mr Mackie's residence;
•the variable height restrictions were without power; and
•the proposed extension is not within the area covered by the restrictions.
The applicant did not file any further submissions responsive to the order made at the hearing. Instead, in a letter responding to the respondents' solicitors assertion that they had filed no submissions on the 'further four grounds', the applicant's solicitors indicated that relevant submissions were to be found in various documents already filed.
The respondents filed their submissions in compliance with my order on 7 July 2010. On 30 July 2010, the applicant's solicitors wrote to the Tribunal, asserting that the respondents' written submissions raised new issues, and requesting, 'in accordance with the usual requirements of procedural fairness', an opportunity to file 'responsive submissions'. The Tribunal contacted the applicant's solicitors and informed them that they should identify those issues which they regarded as being newly raised in order that their request could be considered further.
No such advice was given. Instead, on 16 August 2010, the applicant filed his 'Response to respondents' submissions of 7 July 2010', comprising 10 pages of submissions. These submissions included repetition of what had been filed previously and arguments relating to the 'further four grounds' advanced for the first time.
There have been a number of unsatisfactory results flowing from the conduct of the applicant's case as described above. First, it resulted in the need to refer to a number of different documents purporting to contain the applicant's submissions, thereby leading to an increased risk of a point requiring consideration being missed. This was exacerbated because the usual benefit of a hearing that parties bring together the entirety of their case, leaving in no doubt those matters which continue to be relied upon, and the extent of that reliance, was almost entirely lacking. Second, it was pure luck that the decision remained reserved at the time that the last set of submissions was filed. Third, in considering the most recent submissions, filed other than in accordance with the clear program set at the hearing, it was necessary for me to be on constant alert as to compliance with procedural fairness requirements. In the end, it was only due to the conclusions I reached in relation to the arguments raised for the first time by the applicant that I found it unnecessary to invite the respondents to make further written submissions.
Parties to proceedings in the Tribunal are expected to comply with the Tribunal's lawful directions and to otherwise conduct themselves in a way consistent with the Tribunal's objectives to act fairly and decide matters as speedily as possible. This expectation is heightened where parties are legally represented. The conduct of this proceeding by the applicant's representative has failed to meet the Tribunal's expectation.
Order
The Tribunal orders as follows:
1.It is declared pursuant to s 93(2)(a) of the Strata Titles Act 1985 (WA) that the following bylaws contained in Notification H49496 registered by the Registrar of Titles on surveystrata plan 6006 are invalid:
•Bylaw 16(a); and
•Bylaw 19.
2.Pursuant to s 93(2)(b) of the Strata Titles Act 1985 (WA), each of the bylaws referred to in the previous paragraph of this order is hereby repealed.
3.The application is otherwise dismissed.
4.Within 28 days of the date of this order, the applicant is to lodge a copy of this order with the Registrar of Titles pursuant to s 115 of the Strata Titles Act 1985 (WA).
I certify that this and the preceding [78] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR T CAREY, MEMBER
Attachment A
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