| JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : STRATA TITLES ACT 1985 (WA) CITATION : PARSONS and THE OWNERS OF THE PINES AT ELLENBROOK STRATA PLAN 37402 [2013] WASAT 50 MEMBER : MS L WARD (MEMBER) HEARD : 10 DECEMBER 2012 FINAL DOCUMENTS RECEIVED 15 MARCH 2013
DELIVERED : 12 APRIL 2013 FILE NO/S : CC 1330 of 2012 BETWEEN : KEITH GORDON PARSONS Applicant
AND
THE OWNERS OF THE PINES AT ELLENBROOK STRATA PLAN 37402
Respondent
Catchwords: First annual general meeting Quorum Notice of meeting Majority required for resolutions Section 44 and s 97 of Strata Titles Act 1985 (WA) Tribunal's power to invalidate resolutions Discretionary considerations 13 year delay in making application Utility of orders if successful Delegation of functions, duties or powers by council of owners Functions of councils Bylaw 8(2)(b) of Sch 1 to Strata Titles Act 1985 Council may employ agents and employees Jurisdiction of Tribunal to consider Residency Deed with third parties Insurance requirements under s 54 and s 59 of Strata Titles Act 1985
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Legislation: Strata Titles Act 1985 (WA), s 3, s 3B, s 28, s 30, s 31, s 35, s 36, s 37(1)(c), 37(1)(d), s 42, s 42B, s 43, s 43(1)(viii), s 44, s 45, s 47, s 49, s 53, s 54, s 55, s 56, s 57, s 58, s 59, s 97, s 100, Sch 1, Bylaw 4, Bylaw 7(2), Bylaw 8(2)(b), Bylaw 11(5), Bylaw 12(3), Bylaw 14(2), Bylaw 14(6), Sch 2, Pt 4 Div 4
Strata Schemes Management Act 1996 (NSW), s 13(3), s 28
Strata Titles General Regulations 1996 (WA), reg 23, reg 23(d)
Workers' Compensation and Injury Management Act 1981 (WA), s 5 Result: Application unsuccessful
Summary of Tribunal's decision: Mr Keith Parsons has owned Villa 31 in The Pines at Ellenbrook since 23 March 2000. The Pines at Ellenbrook is a strata titled retirement village comprising 139 units. The Owners of The Pines at Ellenbrook Strata Plan 37402 is the respondent.
At the time of signing the sales contract, Mr Parsons also signed a Residency Deed with the developers of the complex, Parkside Villas Management Pty Ltd and Village Management Pty Ltd. Village Management Pty Ltd is both the strata manager appointed by the strata company and the manager of the retirement village appointed under the Residency Deed. In broad terms, Mr Parsons has general concerns about the level of influence that Village Management Pty Ltd has over the complex and whether or not the complex is managed in accordance with the Strata Titles Act 1985 (WA).
In response to the issues raised by Mr Parsons, the Tribunal found that:
1) Notwithstanding the strata company's failure to give notice of the first annual general meeting, the 13 resolutions passed at the meeting held on 27 April 2000 should not be invalidated under s 97(1)(a) of the Strata Titles Act 1985. This finding was based on Mr Parsons' failure to provide any evidence of being prejudicially affected by the resolutions. The 13 year delay in commencing proceedings was also a consideration. Further, given the majority lot ownership and majority unit entitlement of the strata company as at the first annual general meeting, Mr Parsons' vote would not have altered the outcome of any of the resolutions. Accordingly, relief under s 97 of the Strata Titles Act 1985 was denied to Mr Parsons.
2) The Tribunal also found that the strata company had not delegated any functions contrary to s 44 of the Strata Titles Act 1985.
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3) The Tribunal further found that the strata company has maintained all insurance policies required under s 54, 55 and 59 of the Strata Titles Act 1985.
The application was dismissed.
Category: B
Representation: Counsel:
Applicant : Mr RJ Kronberger
Respondent : Ms R Cosentino and Mr VJ Pelligra
Solicitors:
Applicant : Atkinson Legal
Respondent : Gibson & Gibson
Case(s) referred to in decision(s):
Clark and The Owners of Rosneath Farm - Survey Strata Plan 35452 & Anor [2005] WASAT 329
Dimitroff and Owners of 43 Kinsella Street, Joondanna, Strata Plan 14493 [2012] WASAT 12
Grant and The Owners of Rosneath Farm - Strata Plan 35452 [2006] WASAT 162
Owners, Strata Plan No 56443 v Regis Towers Real Estate Pty Ltd [2003] NSWCA 274
Radford and The Owners of Miami Apartments Strata Plan 45236 [2006] WASAT 293
Radford v The Owners of Miami Apartments, Kings Park Strata Plan 45236 [2007] WASC 250
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REASONS FOR DECISION OF THE TRIBUNAL:
Background 1 Mr Keith Parsons is the applicant in these proceedings. He has owned Villa 31 in The Pines at Ellenbrook since 23 March 2000. The Pines at Ellenbrook is a strata titled retirement village comprising 139 villas. 2 The respondent, The Owners of The Pines at Ellenbrook Strata Plan 37402 (strata company), is the corporation which came into existence upon the registration of the strata plan on 23 March 2000. At the time of registration, the bylaws in Sch 1 and Sch 2 to the Strata Titles Act 1985 (WA) (ST Act) were deemed to apply under s 42(2) of the ST Act. 3 The strata company collectively represents all of the owners of the complex, and owns and controls the common property of the complex. The strata company is operated by the council of the strata company, which is referred to as the council of owners (COO). 4 As shown on the copy of the strata plan, the strata complex has expanded from being 16 lots as of 14 April 2000, to 151 lots as of 15 March 2006. 5 At the time of signing the sales contract, Mr Parsons also signed a Residency Deed with the developers of the complex, Parkside Villas Management Pty Ltd (Parkside) and Village Management Pty Ltd (Village Management). The retirement village is managed by an advisory board, council and manager, in accordance with the Residency Deed. 6 Village Management is both the strata manager appointed by the strata company and the manager of the retirement village appointed under the Residency Deed. 7 In broad terms, Mr Parsons has general concerns about the level of influence that Village Management has over the retirement village and whether or not the complex is managed in accordance with the ST Act.
Issues for determination 8 Ultimately, the issues which Mr Parsons requires the Tribunal to determine, using the numbers as set out in Mr Parsons' application, are: (Page 5)
• Issue 1 - should all resolutions of the first general meeting (FAGM) held on 27 April 2000 be invalidated under s 97(1)(a) of the ST Act? • Issue 4 - has the COO delegated its functions, duties or powers to Village Management, or to any other person, contrary to s 44 of the ST Act? • Issue 5 - has the strata company maintained all insurance policies required by s 54 and s 55 of the ST Act, and s 59 of the ST Act where it receives payment of moneys from an insurer? 9 In response, the strata company submits in summary: • The strata company's failure to comply with the provisions of the ST Act by not providing notice of the FAGM to Mr Parsons did not prejudicially affect any person, and that compliance with the provisions of the Act would not have resulted in a failure to pass the resolutions, or would have affected the result of the election, as the case may be. • There has been no delegation of functions by the council contrary to s 44 of the ST Act. • The strata company has maintained all insurance policies required by Pt IV Div 4 of the ST Act in its own name, as demonstrated by the documents before the Tribunal.
Proceedings in the Tribunal 10 At all times, both parties were legally represented before the Tribunal. 11 On 20 August 2012, the application was filed in the Tribunal. The matter was mediated in the Tribunal on 12 November 2012. Ultimately, the Tribunal was advised, by letter dated 4 December 2012 from Mr Parsons' legal representative, that no consent order had been agreed between the parties. Accordingly, the matter proceeded directly to a full day hearing on 10 December 2012. (Page 6)
Documents before the Tribunal 12 Both parties have provided all documents to the Tribunal upon which they rely. Mr Parsons' bundle of documents consists of 377 pages. The bundle of documents from the strata company consists of 275 pages. The Tribunal notes that the documents provided do not include a copy of the strata roll as of 27 April 2000. However, copies of the certificates of titles for Lots 1 to 16 have been provided to the Tribunal. 13 Mr Parsons has provided a copy of the following particularly relevant documents, namely: • Sale Contract between Parkside and Mr Parsons, dated 14 January 2000; • Residency Deed between Parkside, Village Management and Mr Parsons, dated 14 January 2000; and • Strata Management Agreement between the strata company and Village Management, dated 16 May 2012. 14 Both bundles of documents were accepted into evidence by the Tribunal without any objection from either party. Counsel for the parties took the Tribunal to the documents most relevant to their respective cases, and it is those documents which the Tribunal has considered in the most detail. 15 On 11 February 2013, the strata company provided the Tribunal with its current insurance documents. These fresh insurance documents are dated 18 January 2013 and The Owners of the Pines at Ellenbrook SP 37402 is named as one of the insured. The Tribunal afforded Mr Parsons the opportunity to respond to the fresh insurance documents, and he did so under cover of his solicitor's letter, dated 15 March 2013.
Final hearing - 10 December 2012 16 The facts relevant to this application are largely agreed and are as set out in Mr Parsons' statement of issues, facts and contentions. Mr Parsons did not give evidence before the Tribunal; nor did he call any other witnesses on his behalf. Ms Patricia McGreevy, a current member of the COO, was called by the respondent to give evidence. Ms McGreevy was crossexamined by Mr Parsons' legal representative. Ms McGreevy has been a resident of the village since 12 May 2000. (Page 7)
Consideration of the issues 17 As set out in the order made on 10 December 2012, issues 2 and 3 were settled by consent of the parties during the course of the final hearing. 18 Accordingly, the Tribunal will now proceed to consider and determine issues 1, 4 and 5.
Issue 1: Should all resolutions of the FAGM held on 27 April 2000 be invalidated under s 97(1)(a) of the ST Act due to Parkside failing to give proper notice and there not being a quorum of members 19 Mr Parsons has provided the Tribunal with the minutes of the FAGM held on 27 April 2000. The minutes record that five people attended the meeting. The attendees included three people who were then directors of Parkside, the original proprietor. The two other attendees were employees of Fini Retirement Services Pty Ltd. An agent of the original proprietor, Parkside, was appointed to preside at the FAGM, as is permitted by reg 23(d) and Bylaw 7(2) of Sch 1 to the ST Act. 20 At the time of the FAGM, on 27 April 2000, the complex consisted of 16 lots. The relevant certificates of title show that four of the 16 lots were owned by individuals, including Mr Parsons. The remaining 12 lots were owned by the original proprietor, Parkside. None of the four individual proprietors of lots in the complex are noted in the minutes as apologies. No proxies are recorded in the minutes. 21 Based on the FAGM minutes, and using the Tribunal's numbering, the resolutions passed at the FAGM, in summary, were:
Resolution | Resolution Passed | 1 | Council will consist of a nominee of Parkside | 2 | Chairperson/Secretary/Treasurer to be a nominee of Parkside | 3 | Allocation for amendment of by-laws as specified in the disclosure documents was passed unanimously, the seal be applied to and required documents be executed and lodged at the Department of Land Administration | 4 | Appointment of a strata manager by unanimous resolution according to the terms of the Management Agreement | 5 | Owners authorised the Council to affix the common seal of the strata company to the Management Agreement |
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6,7 & 8 | Owners authorised the Owner's agent to comply with s 43 of the ST Act by supplying the information, signing the certificates and retaining any income from the certificates | 9 | Owners unanimously resolved that the strata company's financial year will be 30 June [year?] | 10 | Owners unanimously resolved to authorise the Strata Manager to open such bank accounts as are necessary to administer the affairs of the strata company | 11 | Owners unanimously resolved to authorise the Strata Manager to be the signatory to these accounts | 12 | Owners unanimously resolved that, for the purpose of fixing the amount of authorised expenditure under s 47 of the ST Act, the prescribed amount per lot will be $200 | 13 | Owners unanimously resolved that the monthly strata levies be incorporated in the Villa levies (as per the Residency Deed). | 22 Mr Parsons submits that all of the above resolutions passed at the FAGM should be invalidated under s 97(1)(a) of the ST Act due to Parkside failing to give proper notice and there not being a quorum of members. Mr Parsons has not identified each individual resolution passed at the FAGM; rather, he submits that all of the resolutions passed at the meeting should be invalidated. He submits that none of the resolutions passed at the FAGM were validly made.
1) Quorum 23 In relation to Mr Parsons' complaint about the quorum for the FAGM, the Tribunal is satisfied that a quorum existed based on Parkside's majority shareholding. By-law 12(3) of Sch 1 to the ST Act provides that, at a general meeting, one half of the persons entitled to vote present, in person or by proxy, constitutes a quorum. By-law 14(2) and Bylaw 14(6) are relevant to the entitlement to vote. By-law 14(2) deals with the proprietors having the same number of votes as the unit entitlements of their respective lots on a poll. Accordingly, in this case, as Parkside held the majority unit entitlements, it was able to form the quorum at the FAGM. There is no evidence of Bylaw 14(6) being relevant to this application. (Page 9)
2) Notice 24 At the final hearing, so very late in the proceedings, the strata company admitted that Parkside had not provided Mr Parsons with notice of the FAGM. No admission was made by the strata company as to whether or not the other three individual lot owners had received notice of the FAGM. 25 Section 97(1) of the ST Act states that where the Tribunal considers that the provisions of the Act have not been complied with in relation to a meeting of the strata company, it may make an order either invalidating any resolution, or refusing to invalidate the resolution. 26 Section 97(2) of the ST Act expressly provides that the Tribunal shall not make an order under s 97(1) refusing to invalidate a resolution or election unless it considers: … (a) that the failure to comply with the provisions of this Act did not prejudicially affect any person; and (b) that compliance with the provisions of this Act would not have resulted in a failure to pass the resolution, or have affected the result of the election, as the case may be. 27 The admission by the strata company in relation to the failure to give Mr Parsons notice of the FAGM appears to be prima facie evidence of a contravention of s 49 of the ST Act, reg 23 of the Strata Titles General Regulations 1996 (WA) and Sch 1 By-law 11(5) of the ST Act. Accordingly, Mr Parsons has established circumstances which would permit an order invalidating the resolutions passed at the FAGM. 28 Mr Parsons submits that the Tribunal should exercise its discretion in his favour because the failure to give him notice of the FAGM meant that he was denied the opportunity to vote on any of the above 13 resolutions. It was claimed on Mr Parsons' behalf that he was also prejudiced because if he had notice of the FAGM, then he would have had the opportunity to seek legal advice in relation to the proposed motions. Mr Parsons has not identified the particular motions in relation to which he would have sought legal advice. The almost 13 year delay between when the FAGM was held and when this application was lodged in the Tribunal was, according to Mr Parsons, due to spending seven to eight years attempting to get the information required. Mr Parsons also submits that if he had been given notice of the FAGM and he had voted against any resolution (Page 10)
requiring a unanimous decision, then his vote would have altered the outcome of those particular resolutions at the FAGM. 29 In response, the strata company submits that the Tribunal should refuse to invalidate the resolutions on the basis that there is no evidence to show that any failure to comply with the provision of the ST Act prejudicially affected any person, and also that compliance would not have resulted in a failure to pass the resolution. The strata company submits that only a simple majority was required for each of the resolutions passed at the FAGM, and that as Parkside owned 12 of the 16 lots, it had a majority. The strata company also submits that Mr Parsons' delay in bringing this application indicates a lack of detriment. If Mr Parsons had suffered a detriment, then the proceedings would have been commenced sooner. 30 The Tribunal will now consider whether or not all of the FAGM resolutions should be invalidated under s 97 of the ST Act. The Tribunal has considered the operation of s 97 in a number of previous cases. In Radford and The Owners of Miami Apartments Strata Plan 45236 [2006] WASAT 293 (Radford 2006), at [151], Member De Villiers emphasised the discretionary nature of relief under s 97 of the ST Act where he stated: The Tribunal must be satisfied that provisions of the ST Act have not been complied with before it 'may' take the next step of considering whether to invalidate a resolution. The Tribunal has a discretion to take into account the seriousness of the alleged non-compliance with the ST Act before it considers setting aside a resolution. It would not be in the public interest if an overly technical or zealous approach is taken whereby resolutions without dissent of an AGM are set aside and by-laws repealed for trivial reasons.
3) Was Mr Parsons prejudicially affected? 31 Under s 97(2)(a) of the ST Act, the Tribunal is required to consider if Parkside's failure to give notice of the FAGM to Mr Parsons prejudicially affected 'any person'. Mr Parsons has submitted that he was prejudicially affected. There is no evidence or suggestion before the Tribunal that any other person, apart from Mr Parsons, was affected by the breach of the ST Act. 32 The facts of this case may be distinguished from the facts in Dimitroff and Owners of 43 Kinsella Street, Joondanna, Strata Plan 14493 [2012] WASAT 12. In that case, Mr Dimitroff was on the record as voting against the imposition of a fee in relation an 'exclusive (Page 11)
use by-law' at the 2005 annual general meeting. A second attempt was made at the 2010 annual general meeting to impose an exclusive use licence fee in relation to the six courtyards in the complex. However, Mr Dimitroff did not receive notice of the 2010 annual general meeting and, ultimately, the Tribunal invalidated the resolution in question. 33 In Grant and The Owners of Rosneath Farm - Strata Plan 35452 [2006] WASAT 162 (Grant), Senior Member Raymond recognised that: [t]here may be circumstances in which it would be appropriate to infer, in the absence of direct evidence, the criteria necessary to enable the Tribunal to refuse to make an order invalidating a resolution. … 34 In the Tribunal's view, this is such a case, as recognised in Grant. Mr Parsons has made vague claims about the prejudice he has suffered. There is no direct or contemporaneous evidence of his claim of prejudice. Based on the documents before the Tribunal, Mr Parsons commenced writing to various third parties on 24 September 2009 regarding the meeting of the strata company held on 10 October 2000. The Tribunal notes that matters relating to the meeting held on 10 October 2000 are not before this Tribunal. 35 On 30 October 2009, Mr Parsons wrote to Lend Lease and asked for the strata roll for the period December 1999 to 1 January 2001. In the letter to Lend Lease, Mr Parsons also stated that he had 'sent papers to lawyers to take to [the] Tribunal, [which] I believe will prove that there was not a properly convened meeting in April or October 2000'. The Lend Lease letter is significant because it is the first mention in the documents before the Tribunal of the FAGM, and it also indicates that Mr Parsons was seeking legal advice as of 30 October 2009 to commence this application, which he ultimately did some three years later in 2012. 36 In a letter dated 25 February 2010 to Lend Lease, Mr Parsons refers to the minutes of the FAGM and, for the first time in writing, he raises his concerns regarding the lack of notice and quorum for the FAGM. Mr Parsons indicates in his letter to the strata company, dated 10 June 2010, that he received the FAGM minutes on 14 March 2006. In the letter of 25 February 2010, Mr Parsons also refers to the provisions of s 43 of the ST Act which indicates that he is aware of the provisions for obtaining documents from the strata company. 37 Mr Parsons' letter to the strata council secretary, dated 2 July 2010, refers to the FAGM minutes being shown to him on 15 June 2006. (Page 12)
38 The Tribunal has not been taken to any aspect of the above correspondence which suggests that Mr Parsons has suffered prejudicially as a result of the resolutions made at the FAGM. On the Tribunal's own reading of the correspondence, it appears that Mr Parsons' only concerns in relation to the FAGM were the failure to give proper notice and the lack of a quorum. He does not raise any express queries regarding the resolutions passed at the FAGM. This is in contrast to the queries he raises in some of the letters about the resolutions passing certain bylaws at the October 2000 meeting. 39 Mr Parsons' delay in bringing these proceedings is also a factor in the consideration of the exercise of the Tribunal's discretion under s 97 of the ST Act and whether or not he has been prejudicially affected. While the ability to bring an application under s 97 of the ST Act is not expressly limited in time, the discretionary nature of the section makes delay a relevant factor. Similarly, the utility associated with invalidating resolutions, some of which have long expired or have been superseded, is also a relevant consideration. 40 The FAGM was held on 27 April 2000, now almost 13 years ago. It is not apparent to the Tribunal when Mr Parsons first became aware of the FAGM having been held and of the resolutions passed at that time. Although, based on Mr Parsons' correspondence outlined above, Mr Parsons had a copy of the FAGM minutes by March 2006. By October 2009, he was seeking legal advice on precisely the matters currently before the Tribunal. The Tribunal has not had the benefit of Mr Parsons' oral evidence on this matter to explain in detail the cause of the delay. The delay between when the FAGM was held and when the application commenced is inordinate and has not been adequately explained by Mr Parsons. This application is one which, based on Mr Parsons' own documents, could have been commenced soon after March 2006 when he received the FAGM minutes. There is no evidence before the Tribunal of the reason for the delay between the FAGM and the provision of the minutes to Mr Parsons in March 2006. Also, no valid reason has been given to the Tribunal for the delay between 2006, when Mr Parsons had a copy of the FAGM minutes, and 2012. Further, no reason for the delay is apparent to the Tribunal based on the documents before it. There is no evidence before the Tribunal in support of Mr Parsons' submission that the delay was due to Mr Parsons spending seven to eight years attempting to get the information required for the application. The information required for this application is straightforward the minutes of the FAGM and the strata roll as of the date of the FAGM. Further, Mr Parsons could also avail himself of (Page 13)
s 43 of the ST Act and apply for an order for the strata company to provide him with certain documents, rather than waiting for this to occur for seven to eight years. 41 The Tribunal considers that the long and unexplained delay in Mr Parsons commencing this application is an indication that he was not prejudicially affected by the provisions. The Tribunal attaches a great deal of weight to delay as an indicator of a lack of prejudice, and finds the failure by the strata company to comply with the provisions of the ST Act did not prejudicially affect Mr Parsons. 42 I turn now to the second aspect in s 97(2) of the ST Act, namely, had Mr Parsons been given notice of the FAGM and, if he had attended or provided a proxy, would his vote have resulted in a failure to pass the resolution or affected the result of the election.
4) Would Mr Parsons' vote have resulted in a failure to pass the resolutions at the FAGM? 43 The Tribunal has some difficulties arising from Mr Parsons' blanket submission that all FAGM resolutions should be invalidated. The difficulties arise from different types of motions requiring different voting resolutions. Mr Parsons has not descended into any detail in this regard and his submissions are severely lacking. 44 The Tribunal notes that the ST Act provides for four different types of resolutions which can be passed at general meetings of a strata company, namely: a unanimous resolution; a resolution without dissent; a special resolution; or an ordinary resolution. 45 Mr Parsons' oral submissions focussed on the fact that the minutes of the FAGM record a number of resolutions as being passed unanimously and that, as a result, Mr Parsons' vote against the motion would be sufficient for it to fail. 46 A unanimous resolution is defined in s 3 of the ST Act. It is a resolution which must be passed by all lot owners (or their proxies), or other persons entitled to vote. However, in a scheme which is greater than two lots, a unanimous resolution is required in very few circumstances under the ST Act. One example of where a unanimous resolution is required is under s 30 of the ST Act, 'Termination of a strata scheme'. 47 In the Tribunal's view, the term 'unanimous resolution' is not used in the FAGM minutes to mean a 'unanimous resolution' as defined in s 3 of (Page 14)
the ST Act. This is because, in the Tribunal's view, none of the resolutions passed at the FAGM required a unanimous resolution under the ST Act. While the use of the term 'unanimous resolution' in the FAGM minutes is unfortunate, in the Tribunal's view, no adverse inference can be drawn from the strata company's inappropriate use of that term. Accordingly, Mr Parsons' general submission that his vote would have changed the outcome of the socalled 'unanimous resolutions', namely, resolutions numbered 4, 9, 10, 11, 12 and 13, cannot be sustained. 48 In response, the strata company submitted that all resolutions passed at the FAGM on 27 April 2000 required a simple majority only. It also contended that as Parkside held the majority unit entitlement and that, accordingly, even if the other four proprietors had attended, they were not able to influence the outcome on a poll. 49 The Tribunal notes that the minutes of the FAGM do not record if any proxies were held or if votes were taken by a show of hands or by a poll, in accordance with unit entitlement. No doubt, had any lot owners other than Parkside attended the FAGM, then voting by poll would have been requested by Parkside. 50 In any event, with one possible exception set out below in relation to resolution 3, none of the resolutions passed at the FAGM are matters requiring a resolution without dissent. 51 Resolutions 1 and 2 of the FAGM deal with the election of the COO. Mr Parsons complains that he was not given the opportunity to nominate for these positions at the FAGM. 52 The Tribunal notes that at the time of the FAGM for the purposes of Bylaw 4 of Sch 1 to the ST Act, there were five proprietors (see: Bylaw 4(4) of Sch 1 to the ST Act). Under By-law 4(3) there were required to be a COO of not less than three proprietors. By-law 4(7) states that on an election of members of the council, a proprietor has one vote in respect of each lot owned by him. Accordingly, at the time of the FAGM, Parkside had the voting majority in relation to the constitution of the COO. 53 In relation to resolution 1, the Tribunal is satisfied that Parkside, as a proprietor, was able to nominate a representative to be on the COO. While the minutes of the FAGM are not clear, Parkside's representative would be a director of the company. Mr Parson's vote would not have altered whether or not this resolution passed. This is due to a simple majority being all that was required for election to the COO. Parkside, as (Page 15)
the majority lot owner, had the majority vote. Also, there were five proprietors in the scheme and only a minimum of three were required to form the COO. Mr Parsons did not necessarily suffer any loss of opportunity to be elected to the COO, as his election was not automatic. 54 In relation to resolution 2, it appears that one of the COO office bearers would be held by Parkside. Section 45 of the ST Act permits a corporate body to be chairman, secretary, treasurer or council member, and to act through an individual authorised by the corporation. It appears from the FAGM minutes that only Parkside was on the COO. By-law 4(13) states that all acts done in good faith by the COO will overcome any defect in appointment. Mr Parsons has not suggested that anything done by the COO elected at the FAGM was done in anything other than good faith. Accordingly, Mr Parsons' complaint in relation to resolution 2 must also fail. 55 In relation to resolution 3, the FAGM minutes refer to a bylaw being passed. Mr Parsons has not taken the Tribunal to the bylaw which was passed at the FAGM. The only amended by-laws before the Tribunal are those passed at the strata company meeting on 10 October 2000 notification No H576022AE. The type of by-law passed at the FAGM will determine the voting majority required. Any changes to a Sch 1 bylaw require a resolution without dissent (s 42(2)(a) of the ST Act), whereas changes to a Sch 2 bylaw require a special resolution (s 42(2)(c) of the ST Act). Mr Parsons' vote would have resulted in a failure to pass the resolution if the by-law in question was a Sch 1 by-law. However, on the evidence before the Tribunal, it is not satisfied that the bylaw referred to in the FAGM minutes at resolution 3 was a Sch 1 bylaw. Accordingly, Mr Parsons' complaint in relation to resolution 3 must also fail. 56 Resolutions 4, 5, 6, 7, 8, 9, 10, 11 and 13 are all resolutions which require a simple majority. Accordingly, Mr Parsons' vote on those resolutions on a poll would not have altered the outcome. 57 Resolution 12 varies the strata council expenditure limit. In accordance with s 47(1)(a) of the ST Act, such a variation requires a special resolution of the strata company. A special resolution is defined in s 3B of the ST Act. In summary, a special resolution is passed only if those lot owners, or other persons entitled to vote, are: • those who vote in favour of the resolution have no less than 50% of the lots in the scheme OR when a poll is (Page 16)
requested, have no less than 50% of the unit entitlement in the scheme; and • those who vote against the resolution - do not have 25% or more of the unit entitlement in the scheme OR 25% or more of the lots in the scheme. 58 In this case, Parkside held more than 50% of the lots and the unit entitlements at the time of the FAGM. Mr Parsons owned one lot. He did not have 25% or more of the unit entitlement in the scheme or 25% or more of the lots in the scheme. Accordingly, his vote on resolution 12 could not have changed the outcome. 59 For the reasons set out above, the Tribunal is satisfied that Mr Parsons' vote would not have resulted in a failure to pass the resolutions passed at the FAGM. 60 In conclusion, the Tribunal finds that while the strata company did not comply with the provisions of the ST Act, having considered the requirements under s 97(2) of the Act, it refuses to invalidate any of the resolutions passed at the FAGM. 61 Accordingly, it is not necessary for the Tribunal to address the strata company's submissions as to whether s 100 of the ST Act is the appropriate section for the application to be made, or to consider the effect of the proxy given by Mr Parsons in his sales contract.
Issue 4: Has the strata council delegated its functions, duties or powers to Village Management, or to any other person, contrary to s 44 of the ST Act? 62 Mr Parsons seeks an order that the strata council perform its functions under s 44 of the ST Act and refrain from delegating its functions, duties or powers to Village Management, or any other person. He submits, in effect, that the COO has been usurped by certain provisions of the Residency Deed such that the Advisory Board and Residents' Council created under that deed now control key aspects of the strata scheme. 63 Mr Parsons submits, in the alternate that there has been an impermissible delegation of all COO functions to Village Management under the Management Agreement entered into on 16 May 2012. 64 The Tribunal will consider each of these claims below. (Page 17)
A. Claim that the Residency Deed conflicts with the ST Act
1) Strata company not a party to the Residency Deed 65 The parties to the Residency Deed are Village Management, Parkside and the resident, Mr Parsons. In essence, the Residency Deed sets out how the retirement village is to be managed and the basis on which the Combined Charge is payable and the fees payable upon exiting the village. 66 The strata company submits that Mr Parsons' claims that the Residency Deed and ST Act are in conflict must fail, because the strata company is not a party to the document. Mr Parsons' solicitor acknowledged at the final hearing that that the jurisdictional issue was a 'potential problem'. 67 The strata company submits that the terms of the Residency Deed are not within the jurisdiction of the Tribunal because the substance of the dispute is outside the Tribunal's jurisdiction. The strata company finds support for its submission in the Tribunal's decision of Clark and The Owners of Rosneath Farm - Survey Strata Plan 35452 & Anor [2005] WASAT 329 (Clark), at [12], and in the Western Australian Supreme Court decision of Radford v The Owners of Miami Apartments, Kings Park Strata Plan 45236 [2007] WASC 250 (Radford 2007), at [128]. In both Clark and Radford 2007, the strata company was not a party to the contracts in question and, accordingly, the ST Act did not govern the contracts. 68 In Clark, Mr Clark sought to enforce private agreements that he had with purchasers of lots in a scheme developed by him. The agreements purported to surrender some of the purchasers' voting rights to Mr Clark. In that case, the Tribunal found that Mr Clark's capacity to exercise or perform the power or function in question derived from the agreements and not from the ST Act, and that therefore the Tribunal did not have jurisdiction to deal with the application. 69 The strata company's submission in this regard has, in the Tribunal's view, a great deal of merit. It is also difficult to envisage how any powers, duties or functions of the strata company could be validly delegated by any entity apart from the strata company itself. The critical element in any such delegation is the representative capacity in which a third party acts in relation to the strata company. As a result, any purported delegation of strata company powers under the ST Act by a party other than the strata company, must be void ab initio. (Page 18)
70 Accordingly, the Tribunal upholds the strata company's jurisdictional objection on the basis that the strata company is not a party to the Residency Deed. Further, there is no evidence of any valid delegation of authority by the strata company to the parties to the Residency Deed. For the above reasons, the Tribunal finds that it does not have jurisdiction under the ST Act to determine if the Residency Deed conflicts with the ST Act because the strata company is not a party to that agreement.
2) In the alternate, do the terms of the Residency Deed itself show that the ST Act is not complied with? 71 Mr Parsons submits in the alternate that the Residency Deed impermissibly purports to allow the Advisory Board and Residents' Council to control key aspects of the strata scheme. 72 In contrast, the strata company submits that the Residency Deed expressly recognises the provisions of the ST Act. For example, clause 3.3(c) and clause 5.6 of the Residency Deed both expressly exclude the strata company levies from payments for certain items from the 'Common Care Services Fees'. This, the strata company submits, is an indication of the careful management and distinction made between the retirement village fees and the strata levies in full appreciation of the requirements under the ST Act. 73 Mr Parsons gives a number of examples of where he says that the Residency Deed conflicts with the ST Act and its by-laws. The examples given by Mr Parsons are considered by the Tribunal below.
3) 'Common Areas' 74 Mr Parsons submits that clauses 2.8 and 3.2 of the Residency Deed, which deals with the 'Common Areas', conflicts with the ST Act. 75 In the Tribunal's view, as the overlap between the 'Common Areas' under the Residency Deed and common property under the ST Act is not a complete overlap, it is not necessary for it to decide whether or not an aspect of the management of the 'Common Areas' under the Residency Deed may or may not conflict with the ST Act. The strata company has obligations under the ST Act and there is no evidence of those obligations being disregarded. Mr Parsons' application in this respect is without foundation. (Page 19)
4) Refurbishment and Improvement Contribution Fund (RICF) 76 Clause 3.3 of the Residency Deed empowers Village Management to administer the retirement village's 'Refurbishment and Improvements Contribution Fund' (RICF). Mr Parsons submits that the clause conflicts with s 36(1), s 36(2) and s 36(3) and s 42B of the ST Act. 77 However, it is clear from the Residency Deed that the refurbishment and improvement contribution (RIC) under the Residency Deed is not a reserve fund. The RIC is payable by a resident on settlement of the resale of their villa. Therefore, it is former residents of the complex who contribute to the RICF. The RICF is therefore quite properly managed separately to any fund under the ST Act. The RIC is calculated in accordance with a formula set out in Schedule 7 to the Residency Deed. 78 Ms McGreevy's evidence before the Tribunal was that there was no strata company reserve fund. Section 36(2)(a) of the ST Act states: 79 Accordingly, it is not compulsory to have a reserve fund, and the strata company's failure to have one is not a breach of the ST Act. 80 Further, a strata company may borrow money from third parties required by it in the performance of its functions and give security for repayment pursuant to s 37(1)(c) and s 37(1)(d) of the Act. 81 Mr Parsons' application in this respect is without foundation.
5) Manager's obligations 82 Clause 3.3 of the Residency Deed sets out the manager's obligations in relation to the Village Scheme, which is the retirement village scheme. The obligations imposed on the manager under the Residency Deed are not those imposed by the ST Act on the strata company; nor has there been, and nor can there be, any purported delegation by the strata company to the Village Manager under the Residency Deed. Once again, this is because the strata company is not a party to the Residency Deed. Mr Parsons' application in this respect is without foundation.
6) Adoption of the terminology 83 Mr Parsons also submitted at the final hearing that the strata company had adopted the terminology of the Residency Deed, and (Page 20)
has therefore purported to act in accordance with the Residency Deed. In the Tribunal's view, the use of the same terminology by the strata company as that used in the Residency Deed is not an indication of any noncompliance with the ST Act. 84 Accordingly, having considered all of the matters of which Mr Parsons complains, the Tribunal finds that there is no conflict between the ST Act and the Residency Deed.
7) Minutes 85 Both parties took the Tribunal to various aspects of the minutes which they submitted supported their positions. 86 As the Tribunal understands it, Mr Parsons submits that the reference to certain matters in the minutes of the strata council or strata company indicates that they are influenced unduly by third party arrangements. Mr Parsons took the Tribunal to two sets of minutes of the COO which he submitted demonstrated this third party influence. 87 Firstly, Mr Parsons submitted that the reference in the minutes of the strata council meeting held on 27 February 2012 to item 2, 'Implications of the Village Management Agreement', indicates that the strata council is taking into account agreements involving third parties. However, in the Tribunal's view, the reference to a third party document is in the context of considering the inclusion, or otherwise, of a termination clause in the Strata Management Agreement. Ultimately, the strata council formed the view that the termination clause was unnecessary. There is no adverse inference to be drawn by the Tribunal from the strata council considering the clauses in the Strata Management Agreement in a very careful manner. The reference in minutes to a third party is not contrary to the ST Act. In the Tribunal's view, Mr Parsons' submission in this regard is misconceived. 88 Secondly, Mr Parsons took the Tribunal to item 6.3 'Village Insurance' in the minutes of the COO dated 15 December 2009. The minutes of that meeting record the difficulty that the chairman had in accessing the insurance policy for the retirement village at that time. The minutes record that the details could be accessed in the manager's office and a booklet could be downloaded. In the Tribunal's view, this matter is a historical view of what happened in the retirement village in 2009. The implicit submission from Mr Parsons would appear to the Tribunal to be that the past conduct of the COO is a reliable indicator of its present and future conduct. However, that indicator does not apply to the facts of this (Page 21)
case. This is because the current insurance documents are before the Tribunal. Further, there is an express provision for Mr Parsons to request an inspection of strata documents under s 43(1)(viii) of the ST Act. 89 In response, the strata company submits that the minutes of the strata company and the COO show that they in fact operate in a proactive manner and in accordance with the ST Act. The strata company took the Tribunal through the following matters outlined in the minutes before the Tribunal in support of its submissions: 1) The strata company holds three to four extraordinary general meetings in any one year. 2) Lengthy strata council meetings are held and matters are considered in detail. For example, see the minutes of meeting held on 9 May 2012. 3) Strata budgets and levies receive detailed consideration. For example, see the minutes of meeting held on 24 May 2011. 4) Typical strata issues are considered by the strata company relating to: alterations to the lot, installation of security cameras on common property, pool maintenance, garden contractors, painting, proposal to create a reserve fund, insurance cover and the appointment of a strata manager. For example, see the minutes of meetings held on 23 November 2010, 24 May 2011, 19 August 2011, 28 November 2011 and 29 February 2012. 90 The Tribunal accepts the strata company's submission that the above examples are all consistent with a body complying in material respects with the requirements under the ST Act. Contrary to Mr Parsons' submission, the matters recorded in the minutes evidence the strata company's compliance with the ST Act, particularly s 35, 'Duties of Strata Companies'. Mr Parsons' claim that the minutes show third party control is not made out on the evidence before the Tribunal.
B. Claim that the Management Agreement conflicts with the ST Act 91 The strata council minutes record that the Management Agreement was entered into after consideration was given to it at several strata council meetings. Further, the Management Agreement was the subject of negotiations and quotes from third parties. The minutes of the strata (Page 22)
council meeting held on 10 November 2011 record under item 5.1 that 'Council is continuing to collect information and quotes'. Then, on 27 February 2012, at the strata council meeting a decision was made to enter a contract with Village Management when certain alterations were acceptable. The strata council resolved to appoint Village Management as the manager and agent on behalf of the strata company when the amended agreement was received. Finally, on 16 May 2012, the strata company entered into a strata management agreement (Management Agreement) with the manager. 92 Mr Parsons submits that clauses 5 and 6 of the Management Agreement are express delegations of all of the functions of the COO. The Tribunal notes that clause 5 of the Management Agreement is headed 'Duties of Managers' and is subject to 'any written direction of the Strata Company or the Council'. Clause 5.3 expressly includes as a duty of the manager to 'generally implement the decision of the Strata Company and its Council'. Clause 6 is headed 'Delegation of Powers' and ensures that the manager has all the powers, duties and functions which are 'reasonably necessary' to carry out the obligations under the Management Agreement. 93 Mr Parsons claims that such a delegation is impermissible and cites Owners, Strata Plan No 56443 v Regis Towers Real Estate Pty Ltd[2003] NSWCA 274(Regis Towers) in support of this submission. 94 Regis Towers is a decision dealing with the Strata Schemes Management Act 1996 (NSW) (SSM Act). The SSM Act has a number of provisions dealing with delegations and, in particular, s 13(3) requires that the delegation of any functions of the strata company equivalent must be specifically authorised by the SSM Act. Section 28 of the SSM Act sets out the functions which the managing agent may exercise. 95 In the Tribunal's view, the statutory regime in Western Australia under the ST Act is much more general in its operation in relation to the appointment of a strata manager when compared to the SSM Act regime. Accordingly, the application of Regis Towersto this case is of limited value, although Regis Towers does usefully distinguish between the ability of the strata company to delegate duties or functions, whereas the strata company must at all times retain the decisionmaking power and authority under the SSM Act. 96 In Western Australia, s 44 of the ST Act requires that the 'functions' of the strata company be performed by the council of the strata company, subject to the ST Act and any direction given at a general meeting. (Page 23)
Bylaw 4(1) of Sch 1 to the ST Act states that the 'powers and duties of the strata company' shall be exercised by the council of the strata company, subject to any direction given at a general meeting. Importantly, Bylaw 8(2)(b) states that the COO may employ on behalf of the strata company such agents and employees as it thinks fit in connection with: 97 In the Tribunal's view, the express wording of the Management Agreement makes it abundantly clear that the strata company retains decisionmaking authority under the ST Act. 98 Further, the practical reality, based on the minutes of meetings following the Management Agreement being entered into, is that the strata company continued to actively make decisions. For example, the strata company considered the strata budget and levies at the extraordinary general meeting held on 28 May 2012 and permission was granted to install shade sails in the pool area at the annual general meeting held on 24 August 2012. 99 For the reasons set out above, the Tribunal finds that the Management Agreement does not conflict with the ST Act in the manner alleged by Mr Parsons. Accordingly, the COO has not delegated its functions, duties or powers to Village Management or to any other person, contrary to s 44 of the ST Act. This aspect of the application is dismissed. 100 Accordingly, it is not necessary for the Tribunal to consider the form of relief proposed by Mr Parsons and, in particular, if it is in the form of a mandatory injunction.
Issue 5: Has the strata company maintained all insurance policies required by Pt IV Div 4 of the ST Act in its own name, and, subject to any other order under s 28 or s 31 of the ST Act where it receives payment of moneys from an insurer in respect of the destruction of or damage to a building, it shall apply those moneys in accordance with s 59 of the ST Act 101 Mr Parsons seeks in effect an order that the strata company comply with the insurance requirements under the ST Act. Mr Parsons submits that the strata company has failed to comply with the ST Act, as he claims (Page 24)
clauses 3.6, 3.7 and 3.8 of the Residency Deed are inconsistent with the Act. 102 In response, the strata company submits that, as the strata company is not a party to the Residency Deed, accordingly, the Tribunal does not have jurisdiction to determine disputes regarding the Residency Deed. Rather, the Tribunal's jurisdiction is limited to matters arising within its power under the ST Act. The strata company submits that, in any case, it does comply with the insurance requirement under the ST Act. 103 The Tribunal will now consider the relevant documents and the insurance requirements under the ST Act.
1) Insurance documents 104 On 1 February 2013, after the final hearing, the respondent provided the Tribunal with the current insurance documents for the strata company. These fresh insurance documents are dated 18 January 2013 and The Owners of the Pines at Ellenbrook SP 37402 is named as one of the 'Insured'. Mr Parsons responded to the fresh insurance documents under cover of his solicitor's letter, dated 15 March 2013. Mr Parsons submits that s 54 of the ST Act requires the strata company to be the sole insured under the policy.
2) Residency Deed 105 The parties to the Residency Deed are: the developer, the manager and Mr Parsons. The Residency Deed is dated 14 January 2000. It is convenient to set out briefly the intention giving rise to Mr Parsons entering into the Residency Deed. The recitals state that: 106 Clauses 3.5 to 3.8 of the Residency Deed refer to the manager's various obligations to insure the village (as defined in the Residency Deed), and these clauses are set out below: 3.5 Manager to Insure Village (Page 25)
We must, to the satisfaction of Advisory Board and the Council, always insure with a reputable insurer at their full insurable value (and if possible for full reinstatement value), all parts of the Village that are insurable against fire, storm, and tempest, breakage of glass, impact and explosion and any other risks usually insured against. 3.6 Type of Insurance Cover We must always insure with a reputable insurer (to the satisfaction of the Advisory Board and the Council ) the Advisory Board, the Council, ourselves and each of the Residents against all claims, damages, costs, losses and expenses of any nature which any of the insured suffer or incur in connection with loss of life, personal injury or damage to property arising from: (a) any occurrence in the Village; or (b) the use of the Village or any part of it by any Resident, Residents' Visitors, or any of our employees, contractors and consultants. 3.7 Insurances We must take out those insurances for general and products insurance, industrial special risks insurance, workers' compensation, houseowners and householders insurance, and other insurances as required by the Strata Titles Act 1985, for an insured amount (and if possible for full reinstatement value) approved in writing by the Council which a prudent person engaged in a similar business would take out. We are not required to take out insurance for the Villa's contents, that insurance is your responsibility. We must: 3.8 Application of Insurance Proceeds If any event occurs for which insurance money is payable under any policy of insurance, then that money must be paid by the insurer or insurers directly to us and must be used by us: (a) firstly in reinstatement of so much of the Village that is the subject of the insured event; (Page 26)
(b) secondly in payment of any money owing to the Advisory Board under this Deed; (c) thirdly in payment of any money owing to the Council under this Deed; (d) fourthly in payment of any money owing to the Developer; and (e) fifthly to the Residents. We must, when taking out the insurance, direct the insurer or insurers in the above terms. 107 Mr Parsons claims that: 108 The Tribunal will now examine the relevant sections of the ST Act in order to ascertain if the strata company is complying with the Act.
3) Relevant sections of the ST Act 109 Division 4 of the ST Act is headed 'Insurance'. Section 53 to s 59 of the ST Act deal with the insurance requirements under the Act. Section 53 defines 'building' and 'replacement value'. 'Building' is defined to include proprietors' improvements and fixtures. 110 Both parties proceeded in this application on the basis that s 54 of the ST Act applied. Section 54 is found in Subdivision 3 'Insurance in schemes other than single tier strata schemes'. As a result, the Tribunal also proceeds on the basis that the strata complex is 'other than a single strata scheme'. 111 Section 54 of the ST Act requires the strata company to provide two types of insurance cover. Firstly, it must insure and keep insured the replacement value of all buildings. Secondly, it must also provide public liability cover in the case of property damage, death or bodily injury on common property in an amount of not less than $5 million. (Page 27)
112 Section 55 of the ST Act requires the strata company to provide a third type of insurance 'where applicable'; namely, workers' compensation insurance. 113 Section 59 of the ST Act requires that insurance moneys be applied to rebuilding 'where a strata company receives payment of moneys from an insurer'. According to Alex Ilken, Strata Schemes and Community Schemes Management and the Law (3rd ed, 1998), at paragraph 1104, the manner of indemnification will be at the insurer's option and will be expressed in the policy. For example, the insurer may pay the moneys direct to the strata company or it may arrange for the rebuilding or repairs directly. Section 59 applies only where the insurer makes a payment to the strata company, subject to any order from the District Court under s 28 or s 31 of the ST Act. 114 Mr Parsons makes a number of complaints about the insurance cover the strata company has taken out. He also submits that the Residency Deed does not comply with the requirements of the ST Act. However, for the reasons as set out above, the Tribunal lacks jurisdiction to enforce the Residency Deed.
4) Has the strata company contravened s 54 or s 55 of the ST Act? 115 Mr Parsons alleges that s 54 of the ST Act is not complied with in a number of respects. Each of the complaints made by Mr Parsons is dealt with below. • Length of insurance documents The insurance documents are at pages 136 to 208 of the respondent's bundle of documents. Mr Parsons claims that the insurance documents are lengthy and complex. The Tribunal agrees with the strata company that this is not a valid objection. The Tribunal must determine if the strata company is complying with its obligations under s 54 of the ST Act, irrespective of the length or perceived complexity of the insurance documents. Accordingly, the strata company has not contravened s 54 of the Act in this regard. • Level of public liability cover Mr Parsons complains that the $5 million level of cover is inadequate because it was set in 1985, when the ST Act commenced, and because the complex in this case is a large one. In the Tribunal's view, the ST Act does not require it to (Page 28)
determine the appropriate level of insurance for the strata complex in this matter. The level of cover is a matter for the strata company to determine. The Tribunal must merely be satisfied that the public liability insurance is at least $5 million, as required by the ST Act. On 1 February 2013, after the final hearing, the strata company provided the Tribunal with the Combined General Liability Policy No 10M 3952752, and a certificate of currency, dated 18 January 2013, for 'Class of insurance: Liability'. The certificate of currency names The Owners of the Pines at Ellenbrook SP 37402 as one of the Insured. The certificate of currency also states that the limit of liability is $50 million Public Liability expressed as $5 million combined general liability and $45 million in excess of $5 million. Accordingly, the Tribunal is satisfied that the level and type of cover provided under the above certificate of currency meets the requirements of s 54(1a)(b) of the ST Act. • Replacement value of all buildings and clause 3.7 of the Residency Deed - Insurances On 1 February 2013, after the final hearing, the strata company also provided the Tribunal with a certificate of currency, dated 18 January 2013, for 'Class of insurance: Industrial Special risks'. The certificate of currency names The Owners of the Pines at Ellenbrook SP 37402 as one of the Insured. The certificate of currency covers material loss or damage and consequential loss. It has a combined limit of liability of $600 million. The insurance policies are in the strata company bundle of documents at pages 142 to 274. Mr Parsons has not taken the Tribunal to any aspect of the document which indicates that the level and type of insurance coverage taken out by the strata company does not meet the requirements of s 54 of the ST Act. Further, the requirement in clause 3.7 of the Residency Deed that the insured amount be approved in writing by the council in no way detracts from the strata company's obligations under s 54 of the ST Act. This is because the strata company is not a party to the Residency Deed. The Residency Deed does not, (Page 29)
• Sole insured and clause 3.7 of the Residency Deed - Insurances Mr Parsons submits that s 54 of the ST Act requires the strata company to be the sole insured under the policy. Mr Parsons complains that the Act does not permit the strata company, either expressly or impliedly, to join other parties in the insurance policy. Mr Parsons has not taken the Tribunal to anything in s 54 of the ST Act which requires that the strata company must be the sole insured under the policy. Mr Parsons also submitted that clause 3.7 of the Residency Deed is inconsistent with s 54 and s 55 of the ST Act. Mr Parsons makes this claim on the basis that the Residency Deed requires the manager to take out insurance in the name of the developer and manager, in addition to the strata company. The strata company is not a party to the Residency Deed. The Residency Deed does not, and cannot, derogate from the statutory requirements imposed on the strata company by the ST Act. Whether or not insurance is held in the name of the strata company and additional parties is irrelevant to the strata company, which has independent and separate obligations to insure as required by the Act. In the Tribunal's view, clause 3.7 of the Residency Deed is not inconsistent with the strata company's obligations to insure under s 54 and s 55 of the ST Act. The Tribunal accepts that the strata company must be the insured under the policy. However, it does not accept that the ST Act requires, either expressly or implicitly, that the strata company be the only insured entity under the policy. In the Tribunal's view, the ST Act sets out the minimum requirements for insurance. There is nothing in the Act preventing the insurance taken out by the strata company from being more expansive than that required by the Act. Mr Parsons' complaint that the cover is excessive is not made (Page 30)
• Clause 3.5 of the Residency Deed manager to insure village • Clause 3.6 of the Residency Deed type of insurance cover Mr Parsons submits that clause 3.6 of the Residency Deed requires the manager to effect public risk insurance cover in the retirement village and that this requirement is inconsistent with the strata company's obligations under s 54 and s 55 of the ST Act. As set out above, the strata company is not a party to the Residency Deed. The Residency Deed does not, and cannot, derogate from the statutory requirements imposed on the strata company by the ST Act. Whether or not the manager affects certain types of insurance is irrelevant to the strata company (Page 31)
who has independent and separate obligations to insure as required by s 54 and s 55 of the ST Act. In the Tribunal's view, clause 3.6 of the Residency Deed is not inconsistent with the strata company's obligations to insure under s 54 and s 55 of the ST Act. • Workers' compensation cover Section 55 of the ST Act deals with the requirement of a strata company to effect and maintain workers compensation insurance 'where applicable'. In this case, the strata company submits that, based on Ms McGreevy's evidence, as the strata company does not have any workers, it is not required to take out workers' compensation insurance. Ms McGreevy's evidence before the Tribunal was that, for example, the gardeners in the complex are independent contractors with their own protective insurance. The minutes of the meeting of the strata council dated 19 April 2012, at pages 115 and 117 of the respondent's bundle of documents, support Ms McGreevy's claim that there is a contract in place for garden maintenance. In relation to the hairdresser in the complex, they are provided with a room in the retirement village and the residents pay for it. The hairdresser does not pay rent to the strata company for the room. The hairdressing agreement is referred to in the minutes of the meeting of the strata council dated 19 July 2012, at page 134 of the respondent's documents. There is no evidence before the Tribunal which contradicts Ms McGreevy's evidence and it is therefore accepted in its entirety. The strata company submitted that while the Workers' Compensation and Injury Management Act 1981 (WA) has an extended definition of 'worker' in s 5 of the Act, it does not include a person whose work is of a casual nature and is not for the purpose of the employer's trade or business. Ms McGreevy's evidence in relation to the strata company not having any workers within the terms of the Workers' Compensation and Injury Management Act 1981 (WA) was not challenged by Mr Parsons. In these circumstances, the Tribunal accepts Ms McGreevy's evidence in this regard and accepts that workers' compensation insurance is not 'applicable' to the complex.
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Accordingly, based on the evidence before the Tribunal, there is no contravention of s 55 of the ST Act by the strata company. 116 In summary, having considered all of the above claims made by Mr Parsons, the Tribunal is not satisfied that the strata company has contravened s 54 or s 55 of the ST Act.
5) Has the strata company contravened s 59 of the ST Act? 117 Clause 3.8 of the Residency Deed, 'Application of Insurance Proceeds', provides that proceeds of any insurance money is to be applied to the reinstatement of the retirement village, and then to others, and finally to residents. Mr Parsons submits that, as a result, clause 3.8 of the Residency Deed is contrary to s 59 of the ST Act. 118 The requirements of s 59 of the ST Act are set out above. In the Tribunal's view, there is no express or implied requirement in s 59 of the Act relating to how insurance moneys are dealt with where the strata company receives insurance moneys and applies them 'forthwith' to 'rebuilding, replacing, repairing or restoring the building'. The Act is silent in these circumstances. Further, neither the strata company nor the insurer is a party to the Residency Deed, nor can they be bound by its terms. 119 Accordingly, the Tribunal is satisfied that clause 3.8 of the Residency Deed does not contravene the manner in which insurance moneys are to be applied when they are received by the strata company under s 59 of the ST Act. Accordingly, the strata company has not contravened s 59 of the ST Act.
Conclusion 120 For the reasons set out above, Mr Parsons' application is unsuccessful.
Orders |