Mitra and Ors and Bonnie Vale Pty Ltd and Anor - [2007] WASAT 152

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: STRATA TITLES ACT 1985 (WA)

CITATION: MITRA & ORS and BONNIE VALE PTY LTD & ANOR [2007] WASAT 152

MEMBER: MR C RAYMOND (SENIOR MEMBER)

HEARD: DETERMINED ON THE DOCUMENTS

DELIVERED : 15 JUNE 2007

FILE NO/S: CC 1404 of 2006

BETWEEN: JIM MITRA
LESLIE JACOBS
WALTER HOLDINGS PTY LTD
Applicants
AND
BONNIE VALE PTY LTD
First Respondent
OWNERS OF MANDURAH GATES RESORT STRATA PLAN 36239
Second Respondent

Catchwords:

Strata Titles Act 1985 (WA) - Application for removal of alterations to common property - Orders sought for strata company to enforce bylaws - Whether application an unjustified proceedings within the meaning of s 47 of the State Administrative Tribunal Act 2004 (WA)

Legislation:

State Administrative Tribunal Act 2004 (WA), s 47
Strata Titles Act 1985 (WA), s 47(1), s 83, s 85

Result:

Application refused

Category: B

Representation:

Counsel:

Applicants:     N/A
First Respondent           :     N/A
Second Respondent      :     N/A

Solicitors:

Applicants:     DLA Phillips Fox
First Respondent           :     Hardy Bowen
Second Respondent      :     Marks and Sands

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

Bonnievale Pty Ltd and Walter Holdings Pty Ltd & Anor [2005] WASAT 267
Mitra & Ors and Green & Ors [2006] WASAT 42
Sisto and the Owners of Glenway Gardens [2005] WASAT 282

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

The applicants applied for orders for the removal of works carried out on common property, reinstatement of the common property, and an order requiring the second respondent to enforce the bylaws.
The evidence established that the council of the strata company had given consent to the first respondent for the carrying out of the works, although it was not clear whether the terms of the consent covered all that had been done, or whether any additional work was simply incidental to what had been authorised. The significant issue raised was therefore whether the council had authority to consent to alterations to the common property or whether, as contended for by the applicants, the unanimous consent of all lot owners was required.
The Tribunal did not find it necessary to determine this issue because other considerations, in any event, militated against the exercise of discretion to grant the relief sought. That was because the nature of the works undertaken fell within the type of improvements permitted by Sisto and the Owners of Glenway Gardens [2005] WASAT 282, as works which were for the benefit of all proprietors and the applicants had delayed for more than a year in bringing the application. The Tribunal considered that if the approval of the strata company in general meeting was sought, the works could be approved by a simple majority and a significant majority would support the decision. Taking account of all factors, the Tribunal declined to grant the relief sought.
The Tribunal did not accept submissions made on behalf of the respondents for the proceedings to be dismissed under s 47 of the State Administrative Tribunal Act 2004 (WA) as being unjustified proceedings.

The application and orders sought

On 7 September 2006, the applicants applied for orders against the respondents (referred to separately as Bonnie Vale and the strata company) requiring the removal of a timber fence handrails and steps, paving stones, signage installed on the timber fence, the reinstatement of a lattice screen and flora and lawn, an order relating to the control of parking on a particular lot and an order that the council of the strata company take all steps necessary to enforce the bylaws in relation to the parking issue.
The grounds alleged to support the application reflect that the lattice fence was damaged in a storm in August 2005 and that Mr Craig Green, a director of Bonnie Vale, engaged a contractor to remove the lattice fence and install the wooden fence and steps. The signage is alleged to have been installed by Bonnie Vale and advertises the reception of Mandurah Motel and Apartments. It is alleged that contractors and staff engaged by Mr Green and Bonnie Vale, park and stand vehicles on the parking area of Lot 20.
It is common cause that all of the above works and the display of the signage has occurred upon common property.
Subsequent to the commencement of the application, the applicants have also complained about the construction of a concrete ramp and stainless steel railing in the courtyard comprising part of the common area in the vicinity of Lots 25 and 26.
Submissions filed on behalf of the applicants reflect that their case is also founded on Bonnie Vale having failed to obtain any valid approval for the changes made to the common property. It is asserted that the unanimous consent of all lot owners is required.
Reference is made to a number of the strata company bylaws which it is alleged to have been breached by the above works and conduct.

The relevant bylaws

The strata plan was first registered on or about 30 April 1999 and then comprised 19 lots. A plan of resubdivision of Lot 1 on strata plan 36239 was registered on 20 September 2001 in terms of which Lot 1 was resubdivided into 37 separate lots, being Lots 20 – 57. A notification of change of bylaws Notification No H167356 was registered on 14 July 1999. In terms of that notification, the standard Sch 1 bylaws were repealed and replaced by Sch 1 bylaws 1 – 30 and the Sch 2 bylaws were repealed and replaced with bylaws 1 – 11.
The applicants have alleged breaches of a number of the specific bylaws. It is asserted that the carrying out of the works on the common property constitutes a breach of the following bylaws. In each case, a summary of the content of the bylaw is given to avoid prolixity.
1. Schedule 1 bylaws:
(a)bylaw 1 dealing with the theme of the development;
(b)bylaw 2(2)(a) which prescribes that the common property must be used and enjoyed in such manner as not unreasonably to interfere with the use and enjoyment of other proprietors, occupiers residents or their visitors;
(c)bylaw 2(2)(b) which prescribes that a lot must not be used or must not be permitted to be used in such a manner or for such purposes as cause a nuisance;
2. Schedule 2 bylaws:
(a)bylaw 1(a) which prescribes that a lot must not be used or any part of the common property must not be used for any purpose which may be a breach of any strata company, local government regulation or bylaw, or any other government and regulating authority law;
(b)bylaw 1(b) which prescribes that a lot must not be used for any purpose that might be illegal or injurious to the reputation of the scheme;
(c)bylaw 1(d) which prohibits the obstruction of the lawful use of common property;
(d)bylaw 1(e) which provides that no facility or utility within common property must be used for any purpose other than that for which it is specifically intended;
(e)bylaw 1(g) which prescribes that a proprietor, occupier or tenant must not use or permit common property or any part of common property to be used for any business or commercial purpose or to display or advertise any services generally for any purpose other than the purpose for which the scheme intended to provide;
(f)bylaw 4(a) and 4(b) which prohibit that parking or standing of any motor vehicle or other vehicle upon common property except with the approval of the strata company and prohibit the use of any part of the common property for parking inter alia commercial vehicles other than in those areas set aside for such use as shall be allocated from time to time by the strata company.
In relation to the signage issue, the applicants allege breach of Sch 1 bylaws 1, 2(2)(a) and Sch 2 bylaws 1(a), 1(b), 1(d), 1(e), 1(g) and bylaw 8(b). All of these bylaws have been summarised above except bylaw 8(b) which provides that a proprietor, occupier or other resident of a lot shall not, except with the consent in writing of the strata company, display any sign or advertisement in such a way as to be visible from outside the building.
In relation to the standing or parking of motor vehicles, the applicants allege breach of Sch 1 bylaws 2(2)(a), 2(2)(b), 2(2)(c) and 2(2)(d). Bylaws 2(2)(a) and 2(2)(b) are summarised above. Bylaw 2(2)(c) requires that a proprietor, occupier or other resident of a lot shall take all reasonable steps to ensure that his visitors do not behave in a manner likely to interfere with the peaceful enjoyment of another lot. Bylaw 2(2)(d) provides that a proprietor, occupier or other resident of a lot shall take all reasonable steps to ensure that his visitors comply with the bylaws relating to the parking of motor vehicles. Breach is also alleged of Sch 2 bylaws 1(a) and 2(c). Bylaw 1(a) is summarised above. Bylaw 2(c) prohibits the parking of any vehicle in a position where it is likely to be a nuisance or obstruct access or egress to any car parking area, lot or part of the common property.

Responses to the application

The strata company has annexed minutes of meetings on which it and Bonnie Vale rely to establish that the council of the strata company had consented to the carrying out of the works. It is also pointed out that the third applicant was notified by letter on 18 September 2006 that approval had been granted by the council of the strata company for the construction of the ramp and that the works was about to commence. The third respondent was advised that the builder and his workmen had been requested not to enter into the car parking section of Lot 20 at any time during the carrying out of the works. The letter also stated that Bonnie Vale had undertaken to meet all costs associated with the construction, and that the ramp would remain common property without any exclusivity of use.
Underpinning the responses of both respondents is an argument that the works carried out could be authorised by the council of the strata company under its obligation to exercise control and management of the common property in accordance with the principles discussed in Sisto and the Owners of Glenway Gardens [2005] WASAT 282.
Both of the respondents contend that the proceedings are unjustified and should be dismissed or struck out pursuant to s 47 of the State Administrative Tribunal Act 2004 (WA) (SAT Act). The basis on which the respondents advance this contention is that they submit:
(a)the facts giving rise to the application commenced more than a year prior to the commencement of the proceedings;
(b)the applicants have failed to show any contravention of the bylaws;
(c)the applicants, as owners, would have been aware of the approval of the works in question by the strata council, as the minutes of the meetings could have been requested, but were not;
(d)the proceeding is a further attempt to frustrate the respondents given the historic acrimonious relationship between the applicants and the respondents, as evidenced by the number of current proceedings involving the parties.

Background history

The respondents have referred to previous proceedings between the parties which are reported as Bonnie Vale Pty Ltd and Walter Holdings Pty Ltd & Anor [2005] WASAT 267 and Mitra & Ors and Green & Ors [2006] WASAT 42. The background to the long running dispute between the parties can be gleaned from these decisions. By way of a very brief summary, the land and improvements within the parcel are used as a resort. Individual lot owners had previously leased all the lots under separate leases to a company, Mandurah Resorts Pty Ltd. During or about July 2004, the various leases were assigned to Mandurah Gates Pty Ltd. A dispute occurred which resulted in the proprietors of 44 of the 56 lots in the scheme terminating the leases. Various common facilities for the use of the resort, including a reception area, are included within Lot 20 which is owned by the third applicant. On or about 18 February 2005, the third applicant, as proprietor of Lot 20, and Mandurah Gates Pty Ltd as the then lessee of Lot 20, and J&L Property Group Pty Ltd entered into a deed of assignment of lease of Lot 20 in terms of which the lease was assigned to J&L Property Group Pty Ltd. J&L Property Group Pty Ltd now operates the resort for the lot owners, other than the 44 lot owners who had terminated the lease. The 44 lot owners have aligned themselves with Bonnie Vale. Bonnie Vale manages a resort business and uses Lots 25 and 26 for that purpose.
The majority of lot owners who are aligned to Bonnie Vale have effective control of the strata company.

Considerations

The application is brought under s 83 of the Strata Titles Act 1985 (WA) (ST Act) which provides that the Tribunal may, pursuant to an application of certain categories of applicants, make an order for the settlement of a dispute, or the rectification of a complaint, with respect to the exercise or performance of, or the failure to exercise or perform, a power, authority, duty or function conferred or imposed by the ST Act or the bylaws in connection with the particular scheme. The power vested in the Tribunal is discretionary.
It is evident from the minutes provided by the strata company that the strata council gave due consideration to and approved the removal of the lattice screen and the replacement fencing. There is room for argument as to whether the minutes properly authorise all of the work concerned, but it may well be that any additional work and removal of plants is seen as simply incidental to that which was authorised.
The minutes reflect that the signage was expressly approved.
There is nothing in the evidence which demonstrates that the strata company has failed to discharge its obligations to enforce the bylaws in relation to parking. To the contrary, there is evidence that the strata company took steps to endeavour to control parking at the time when it gave notice that the ramp construction was to commence in September 2006.
The minutes reflect that the strata company gave specific consideration to and approved the construction of the ramp.
The parties have all referred to various authorities to support their respective contentions. The applicants submit that the unanimous consent of lot owners is required to the carrying out of works on common property. On the other hand, the respondents put their position on the basis that the functions of the strata company are to be performed by the council of the strata company, and that consistent with the Sisto principles already referred to above, the requisite approvals were given.
The application raises interesting issues as to the extent to which a council of a strata company may make decisions in relation to control and management of common property. It is not, however, necessary to determine those issues because of the conclusions expressed below relevant to the exercise of the Tribunal's discretion. It is arguable that a strata council has only limited scope within which to make decisions concerning the control and management of common property, where that involves carrying out of works which go beyond the obligation to replace and repair. That is because ordinarily whatever works are contemplated will have been authorised through the budgetry process by the strata company in general meeting. That authority may therefore be established by way of a simple majority vote in favour of works authorised under the budget as was recognised in Sisto. Some works might be so minor or incidental that it may be arguable that a strata council has authority to carry out such works. The extent to which a strata council is authorised will be a matter of fact to be determined having regard to the circumstances of each case but a strata council cannot incur expenditure, except to the extent authorised by the ST Act, the bylaws or any specific resolution passed by the strata company in general meeting. In this instance, the works carried out were carried out at the expense of Bonnie Vale.
The respondents argue that, in these circumstances, the strata council could validly consent to the works, because the works fall within the strata company's obligation to properly control and manage the common property, including the taking of steps to erect structures upon common property to ensure that it is maintained and presented in a way which accords with the reasonable expectations of the proprietors as a whole consistent with the principles expressed in Sisto. The applicants submit to the contrary that the works, in particular the concrete ramp, was created for the predominant purpose of providing access for laundry services to Bonnie Vale's business. It must, of course, be observed that no order is sought in relation to the ramp, but the Tribunal is obliged to deal with the substantial merits of the dispute between the parties, and if necessary, will afford a party an opportunity to amend the relief sought.
In any event, whatever uncertainty may exist as to whether the strata council had authority to give consent to the carrying out of the various works, one thing is clear. That is, that the lot owners aligned to Bonnie Vale are in a very clear majority. The Tribunal has determined in Mitra & Anor and Green & Ors [2006] WASAT 42, that it is open to conduct two separate businesses within the parcel. When considering what is in the interest of all proprietors, the strata company is under a duty to ensure that it acts in a manner which allows both businesses to operate. Thus, consent given to alterations to common property, which will facilitate and are necessary for the conduct of either one of the business operations, must be regarded as being for the benefit of all the proprietors.
In some cases in which unauthorised alterations have been effected to common property, the Tribunal has adjourned an application made for an order to remove the works, and has afforded the erring party an opportunity to put a proposal to the strata council. If it is rejected, the Tribunal has allowed an application under s 85 of the ST Act to challenge that decision, to proceed and be heard at the same time as the first application. In this instance, if that course was to be followed, it is inevitable, on the information before the Tribunal, that any shortcoming in the approvals given by the strata company, on which the Tribunal makes no finding, would be rectified. The nature of the works in question are, in my view, works which fall within the type of improvements permitted by the Sisto decision and capable of being approved by a simple majority. Further, even if the Tribunal were to find some fault in the approvals given by the strata company, which might then result in some technical breach of any of the rules referred to, that breach would in turn be rectified by a subsequent approval of the works by the strata company in general meeting. These considerations militate against the exercise of a discretion to grant relief to the applicants.
Added to these considerations is the delay in the bringing of the proceedings by the applicants. The initial works of which complaint is made was undertaken in August 2005 and the application was not made for more than a year thereafter. This is a matter to be taken into account in the exercise of the Tribunal's discretion as to whether it is appropriate to grant any relief.
Taking into account all of the above factors, I do not consider that any relief is warranted. Some of the arguments advanced come close to constituting an abuse of process. Arguments, that the works and the provision of signage are inconsistent with the theme of the development fly in the face of the Tribunal's decision recognising that two businesses could be operated within the parcel. Nevertheless, taking the proceedings as a whole, I do not consider that it is appropriate to characterise the application as an unjustified proceeding, on any of the bases permitted under s 47 of the SAT Act. The applicants, however, should be forewarned that in the context of the ongoing dispute between the parties delay in the commencement of proceedings including proceedings for interim relief, thereby allowing costs to be incurred in the carrying out of works, may result in relief being refused. The council of the strata company should also exercise caution in making decisions relating to alterations to common property and if it wishes to avoid the risk of further applications to the Tribunal, should ensure that authority is obtained from lot proprietors in general meeting.

Orders

For the above reasons, I decline to grant the applicants the relief sought, or any other relief, and order as follows.
1.The application is dismissed.

I certify that this and the preceding [34] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR C RAYMOND, SENIOR MEMBER