PEARCE and CLAY - [2021] WASAT 142

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL
ACT: STRATA TITLES ACT 1985 (WA)
CITATION:   PEARCE and CLAY [2021] WASAT 142
MEMBER:   MS R PETRUCCI, MEMBER
HEARD:   13 AND 14 MAY 2021 AND 6 JULY 2021 (LAST DOCUMENT FILED 9 AUGUST 2021)
DELIVERED          :   9 NOVEMBER 2021
FILE NO/S:   CC 579 of 2020
BETWEEN:   NEAL PEARCE
LESLEY PEARCE
First Applicants
LINDA VANE
Second Applicant
THERESE LADISZLAI
Third Applicant
AND
MARK CLAY
First Respondent
THE OWNERS OF CARINYA COURT ROCKINGHAM STRATA PLAN 25819
Second Respondent

Catchwords:

Strata Titles Act 1985 (WA) (as it was prior to 1 May 2020) - Strata Titles Act 1985 (WA) (as it applies from 1 May 2020) - Scheme dispute - Whether owner 'unfinancial' before commencement of annual general meeting - Whether owner disentitled from voting at the annual general meeting - Constitution of council - Election of council members - Council to be quorate - Scheme by-laws - Proper construction of by-laws - Proper construction of Sch 1 by-law 4 (prior to 1 May 2020) - Whether annual general meeting is valid - Whether extraordinary general meetings invalid - Turns on own facts

Legislation:

Interpretation Act 1984 (WA), s 18
State Administrative Tribunal Act 2004 (WA), s 38(1)
Strata Titles Act 1985 (WA) (post 1 May 2020), s 3, s 119, s 120, s 120(2)(b), s 127(1), s 127(3), s 128, s 138, s 197(4), Sch 5, cl 4(1), cl 4(2), cl 14(1), cl 14(2)
Strata Titles Act 1985 (WA) (prior to 1 May 2020), s 36, s 46, Sch 1, Sch 2
Strata Titles Amendment Act 2018 (WA)

Result:

Application partly successful

Category: B

Representation:

Counsel:

First Applicants	:	In Person
Second Applicant	:	In Person
Third Applicant	:	In Person
First Respondent	:	Did not participate in his own capacity
Second Respondent	:	Mr Clay as agent

Solicitors:

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

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

Grant and The Owners of Rosneath Farm Strata Plan 35452 [2006] WASAT 162
The Owners of Del Mar Strata Plan 53989 and Dart Enterprises Pty Ltd [2020] WASAT 9

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

On 19 May 2020, three owners,[1] Ms Lesley Pearce and Mr Neil Pearce, Ms Linda Vane and Ms Therese Ladiszlai (the applicants), commenced these proceedings in the Tribunal by an application under s 197(4) of the Strata Titles Act 1985 (WA) (ST Act).[2] The owners seek orders to resolve a scheme dispute involving the first respondent, Mr Mark Clay (Mr Clay) and the second respondent, The Owners of Carinya Court Rockingham Strata Plan 25819 (the second respondent).
[1] In these reasons I have used the terms 'proprietor' and 'owner' interchangeably as have the parties. The ST Act (as it was prior to 1 May 2020 used the term 'proprietor' and the ST Act as it applies from 1 May 2020 uses the term 'owner'. Refer to s 3 of the respective ST Act for the definition of these terms.
[2] In these reasons all references to the ST Act are to the ST Act as is applies from 1 May 2020 (unless expressly stated otherwise).
During these proceedings, the applicants sought leave to withdraw the proceedings. Mr Clay for the second respondent did not support the application. On 27 July 2020, the Tribunal refused to grant leave to the applicants to withdraw the proceedings.
The crux of this matter, and on which the decision turns, is, who can appoint additional members to the council[3] to get to the required quorum? Is it only the strata company at a general meeting, or can the candidates or persons nominated to be members of the council at the Annual General Meeting (AGM) held on 12 December 2019 (2019AGM), whom were less than the number required for a quorum, make such appointments?
[3] The term 'council' is defined in s 3 of the ST Act as the governing body of the strata company.
The following statements reflect the position of the applicants:[4]
This proceeding demonstrates clearly that the actions of Mr Clay and his small group of followers since the 2019AGM have resulted in disorder, chaos and confusion concerning the management of the [strata company]. The situation has caused substantial financial and emotional distress to a majority of proprietors.
…
[I]f the present situation is not resolved, Mr Clay's purported council will wreak further havoc on the [o]wners and condemn proprietors to the further bullying and intimidations by Mr Clay in his pursuit of power and control over the [s]trata [c]ompany.
[4] Closing submissions of the First Applicant made on 2 August 2021 at paras 56 and 58.
The applicants seek orders from the Tribunal to restrain Mr Clay and what the applicants describe as the 'purported council' comprised of Mr Clay, Mr Lyn Merifield (Mr Merifield), Keyrise Pty Ltd (Keyrise) and others (the purported council) from acting and continuing to act as the council on the basis that no lawful authority exists for those owners to act in that capacity. In these reasons I will use the term 'purported council' coined by the applicants but in doing so I mean no disrespect to Mr Clay, Mr Merifield, Keyrise and others.
The amended orders[5] sought by the applicants, in summary, are as follows:[6]
a)That the Minutes of Meeting of the 2019AGM prepared by Bellcourt Strata Management (Bellcourt) are a true and correct record of that meeting.
b)That the Minutes of Meeting of the 2019AGM prepared by Mr Clay are not a true and correct record of that meeting.
c)That all meetings held, resolutions made, and actions taken by the purported council, including the Minutes of Meeting of an AGM held on 3 October 2020 (2020AGM) are invalid.
d)That all funds received, including funds deposited into a bank account opened by Mr Clay after the 2019AGM be remitted in full and deposited into the bank account held by the strata manager, B Strata[7] on behalf of the strata company.
e)That B Strata call a general meeting of all the owners for the purpose of electing members to the council. The meeting is to be chaired by an independent arbitrator from the Chartered Institute of Arbitrators (Australia), the Accredited Dispute Resolvers, the Australian Disputes Centre, or the like. At the commencement of the meeting, the independently appointed chairperson is to determine which owners are financial using the records existing at the time of the 2019AGM.
[5] By order of the Tribunal made on 30 June 2020, the applicants were ordered to file their proposed amended orders sought and the grounds for each amended order sought. Leave was granted by the Tribunal (Mr Aitken Senior Member) on 27 October 2020 to amend the application with the orders sought by the applicants in the document titled 'Orders sought, and grounds' dated 20 October 2020.
[6] Exhibit 1, Hearing Book (HB) at pages 538-539.
[7] B Strata was formerly Bellcourt.
In making closing written submissions, the applicants seek further orders that the Tribunal deems appropriate to assist the owners to resolve the scheme dispute in a manner that will lead to, or enable the effective management of the strata company, including, if appropriate, the short-term appointment of an administrator for the purpose of arranging and holding an AGM of the owners and electing members to the council.
Mr Clay's position is that he has not appeared, filed documents, or represented himself in his personal capacity in these proceedings. It is Mr Clay's submission that none of the orders sought by the applicants are sought against him and therefore he should be removed as a respondent in these proceedings.[8] In support of this, Mr Clay submits that the application is against and only concerns the second respondent. During various directions hearings to program the matter to a final hearing the Tribunal (Mr Aitken Senior Member) did not remove Mr Clay as a party to these proceedings.
[8] By order of the Tribunal (Mr Aitken SM), on 19 May 2020 the second respondent was joined as a party to these proceedings pursuant to s 38(1) of the State Administrative Tribunal Act 2004 (WA).
Mr Clay attended the final hearing and gave evidence and made submissions for the second respondent. Mr Clay did not participate in his own capacity as the first respondent apart from on the question or issue of whether he was 'unfinancial' (see below at [61] to [73]).
Mr Clay submits for the second respondent that the applicants' application should be dismissed. Further, Mr Clay submits that the following orders should be made by the Tribunal:
a)The minutes of the 2019AGM prepared by Mr Clay are a true and correct record of that meeting.
b)The 2020AGM was valid including the election of members to the council at the 2020AGM, as disclosed in the minutes of the 2020AGM.
c)The Extraordinary General Meeting (EGM) held on 7 March 2020 and on 14 March 2020 are valid.
For the reasons given below, I conclude that the applicants' application is partly successful.

Relevant procedural history and evidence

I heard the matter over three days on 13 and 14 May 2021 and 6 July 2021.
The applicants, apart from the second applicant, Ms Vane, attended the final hearing in person as did Mr Clay who made submissions for the second respondent (see [8] above).
Final written submissions were filed by the parties. The last document filed with the Tribunal was on 9 August 2021, following which I reserved my decision.
In accordance with the Tribunal's usual practice in matters of this nature, the hearing was conducted on the basis that all the documents filed with the Tribunal would be regarded as being in evidence,[9] subject to any objection. At the hearing, the Tribunal marked the following documents, to which I have had regard for the purpose of my determination in these proceedings, as exhibits:
Exhibit 1HB prepared by the Tribunal dated 13 May 2021 pages 1 to 924.
Exhibit 2Applicants' 'Lot positions report for the financial period 12/12/2019 to 12/12/219' (one day).
Exhibit 3 First respondent's analysis of First and Final Notice.
Exhibit 4 First respondent's 'Owner ledger from 1/10/19 to 1/9/20'.
Exhibit 5Tax Invoice dated 19 July 2019 headed 'Levy Notice' for Mr Clay.
Exhibit 6Applicant's email from Mr Pearce dated 11 June 2021 titled 'CC 1089/2020'.
Exhibit 7Macquarie Bank Limited bank cheque dated 31 March 2021 purchased by Trust Account - Bellcourt Strata Management Pty Ltd FTB The Owners of Carinya Court Rockingham payable to The Owners of Carinya Court Rockingham.
[9] Although forming part of 'exhibits', the parties' contentions, and submissions in Exhibit 1 are taken to be submissions, rather than evidence.
Mr Clay for the second respondent took issue with the documents at pages 392 to 403 of Exhibit 1. Mr Clay in his closing written submissions for the second respondent submits that those pages are defective. I note pages 392 to 393 are the Notice of Meeting for 17 March 2020 prepared by Bellcourt and pages 394 to 403 are the Minutes of Meeting held 12 December 2019 prepared by Bellcourt. In my view, while those documents may be defective in Mr Clay's view, they are nonetheless relevant as they are relied on by the applicants. I have therefore not redacted them from Exhibit 1.
The applicants had seven witnesses. Ms Lesley Pearce was the first witness called by the applicants. Her witness statement is dated 18 December 2020 and was filed with the Tribunal.[10] Ms Maria Torre was the second witness called by the applicants. Her witness statement is dated 16 December 2020 and was filed with the Tribunal.[11] Ms Ladiszlai was the third witness called by the applicants. Her witness statement is dated 15 December 2020 and was filed with the Tribunal.[12] The fourth witness called by the applicants was Mr Pearce. His witness statement is dated 21 December 2020 and was filed with the Tribunal.[13] Mr Renato De'Pannone was the fifth witness called by the applicants. His witness statement is dated 20 December 2020 and was filed with the Tribunal.[14] Mr Scott Bellerby was the sixth witness called by the applicants. His witness statement is dated 25 February 2021 and was filed with the Tribunal.[15] The final witness called by the applicants was Ms Courtney Butters-Kerr. Her witness statement is dated 26 March 2021 and was filed with the Tribunal.[16] At hearing each of the applicants' witnesses confirmed the contents of his or her respective statement. The applicants' witness evidence is summarised below at [41] to [47].
[10] Exhibit 1, HB at page 635.
[11] Ibid, at pages 638-639.
[12] Ibid, at page 636.
[13] Ibid, at page 634.
[14] Ibid, at pages 628-630.
[15] Ibid, at pages 640-680.
[16] Ibid, at pages 683-716.
Each of the applicants' witnesses referred to in the preceding paragraph agree that Mr Clay's financial status as an owner was discussed at the 2019AGM. Those witnesses also gave evidence that no declaration was made by the chairman at the 2019AGM in respect of the election of members for the council.
Ms Bernice Lisa de Vos in her capacity as attorney under an Enduring Power of Attorney for Mr Vane, the owner of Lot 17, made a statutory declaration on 14 December 2020 which was filed with the Tribunal for the applicants.[17] At the commencement of the hearing on 13 May 2021 Ms De Vos informed the Tribunal by telephone conference that she did not intend to give evidence in the proceedings. As Ms de Vos did not make herself available for cross-examination by the respondents, I have not considered her statutory declaration.
[17] Ibid, at page 640.
The second respondent had four witnesses. Mr Clay was the first witness called by the second respondent. His witness statement is dated 18 March 2021 and was filed with the Tribunal.[18] The second witness called by the second respondent was Mr Wayne Luce. His witness statement is dated 17 March 2021 and was filed with the Tribunal.[19] Mr Merifield was the third witness called by the second respondent. His witness statement is dated 18 March 2021 and was filed with the Tribunal.[20] The final witness called by the second respondent was Mr George Dale Trewenack. His witness statement is undated and was filed with the Tribunal.[21] The second respondents' witness evidence is summarised below at [48] to [53].
[18] Ibid, at pages 854-904.
[19] Ibid, at pages 848-853.
[20] Ibid, at pages 906-908.
[21] Ibid, at pages 885-888.
Each of the witness statements for the second respondent were in a question and answer format. Mr Clay prepared the questions for each of the witnesses. In cross-examination, Mr Merifield stated that Mr Clay assisted him to write his answers. I find the second respondent's witnesses' statements demonstrate an intimate involvement of Mr Clay in the process which resulted in a lack of independence of the witnesses. However, nothing turned on this lack of independence.

I will now set out the issues to be determined in this matter, followed by the legal framework relevant to these proceedings by reference to the relevant provisions of the ST Act and the ST Act (as it was prior to 1 May 2020) as necessary, and I will then make relevant findings of facts and set out the parties' main contentions. Finally, I will address each of the issues for determination in turn.

Issues

The parties agree that the issues or questions that require determination by the Tribunal in these proceedings are as follows:
Issue 1:         Whether Mr Clay:
a)was 'unfinancial' before the commencement of the 2019AGM? and
b)was disentitled by s 120(2)(b) of the ST Act from voting at the 2019AGM?
Issue 2:        Who, if anyone, was elected as a member of the council at the 2019AGM? Was that election valid?
Issue 3:        Whether the persons elected, if any, at the 2019AGM, may appoint another person (with the consent of that person) to be a member of the council? If 'no', must a general meeting be held?
Issue 4: What is the proper construction of Sch 1 of the ST Act (as it was prior to 1 May 2020) bylaws 4(10), 4(12) and 4(13)?
Issue 5:        Who was elected as a member of the council, if anyone, at the 2020AGM? Was that election valid?
Issue 6:        Which of the EGMs held on 7 March 2020, 14 March 2020 and 17 March 2020, if any, was valid?
It is first necessary to set out the regulatory framework and factual background against which the consideration of the above issues must be made.

Regulatory framework

The strata plan, the ST Act, and by-laws

The strata plan was registered on 15 June 1994. The parcel and building are described as:
The Building the subject of this plan is a group of 18 residential units, of 3 floors and of brick, concrete and iron construction, known as Carinya Court and situated on portion of Rockingham Sub lot 1 and being lot 1 on Diagram 30305.
A notification of change of by-laws (by instrument G335294) was registered with Landgate on 25 November 1996. The notification amended the by-laws in Sch 1 to the ST Act (as it was prior to 1 May 2020) by the addition of a new by-law 16 to do with exclusive use of carports. A further notification to the bylaws (by instrument M519310) was registered with Landgate on 13 January 2014. That notification added new Sch 1 by-law 17 to do with debt recovery costs and amended Sch 2 to the ST Act (as it was prior to 1 May 2020) by the addition of a new by-law 15 to do with penalty for breach of bylaws and by-law 16 to do with breach of by-laws for damage to common property.
Major amendments to the ST Act came into operation on 1 May 2020 under the Strata Titles Amendment Act 2018 (WA) (ST Amendment Act). However, the coming into operation of the ST Act does not affect the continued existence of the strata scheme, the strata company, or its council, amongst other things (Sch 5 by-law 2(1) of the ST Act).
In this case the applicants filed their application with the Tribunal after 1 May 2020. This means that the provisions of the ST Act, as they are after the amendments, apply to the determination of this application (Sch 5 by-law 30(1) of the ST Act).
Here, the scheme dispute involves events that occurred, or matters that arose before commencement day (1 May 2020). For example, the 2019AGM is an event which occurred in 2019 and it is therefore an event which arose before the commencement day. In determining the scheme dispute, the Tribunal may therefore apply the objectives set out in s 119 of the ST Act as if that section had been in force when the event occurred, or the matter arose. This is provided for by Sch 5 clauses 14(1) and 14(2) of the ST Act.
Importantly, in respect of by-laws, the by-laws as they applied immediately before commencement day (1 May 2020) continue to apply as provided for by Sch 5 clause 4(1) and (2) of the ST Act as follows:
4. Scheme by-laws
(1)The by-laws (including any management statement) of a strata company as in force immediately before commencement day continue in force, subject to this Act, as scheme by-laws and if they had been made as governance by-laws or as conduct bylaws according to the classification into which they would fall if they had been made on commencement day.
(2)However, all by-laws that are in force immediately before commencement day in the terms set out in Schedule 1 clauses 11 to 15, or Schedule 2 clause 5, as then in force are taken to be repealed on commencement day.
In summary, the current by-laws of the strata scheme comprise Sch 1 of the ST Act (as it was prior to 1 May 2020) by-laws 1 to 17 but excluding Sch 1 by-laws 11 to 15 [general meeting, proceeding at general meeting, votes, and common seal] and Sch 2 of the ST Act (as it was prior to 1 May 2020) by-laws 1 to 16 but excluding by-law 5 [children playing upon common property] (by-laws).
The council is the governing body of the strata company. The powers and duties of the strata company, subject to any restrictions imposed or direction given at a general meeting, are to be exercised and performed by the council.

Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4 sets out relevant by-laws concerning the constitution of the council.
The parties each rely on Sch 1 of the ST Act (as it was prior to 1 May 2020) by-laws 4(4), 4(10), 4(12) and 4(13) in these proceedings. The terms of each of these by-laws are set out below:
4.Constitution of council
…
(4)Where there are more than 3 proprietors the members of the council shall be elected at each annual general meeting of the strata company or, if the number of proprietors increases to more than 3, at an extraordinary general meeting convened for the purpose.
…
(10)Any casual vacancy on the council may be filled by the remaining members of the council, except that, in a case where a casual vacancy arises because of the removal from office of a member under sub bylaw (8), the strata company may resolve that the casual vacancy shall be filled by the strata company at a general meeting.
…
(12)The continuing members of the council may act notwithstanding any vacancy in the council, but so long as the number of members is reduced below the number fixed by these by laws as the quorum of the council, the continuing members or member of the council may act for the purpose of increasing the number of members of the council or convening a general meeting of the strata company, but for no other purpose.
(13)All acts done in good faith by the council shall, notwithstanding that it is afterwards discovered that there was some defect in the appointment or continuance in office of any member of the council, be as valid as if that member had been duly appointed or had duly continued in office.
The parties' interpretation of parts of the above by-law differed significantly. I will return to the proper construction of Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4 later in these reasons (see below at [92] to [111]).
The procedure for the nomination and election of members to the council for this case is set out in Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 5. The interpretation of this by-law by the parties was consistent. However, they differed in whether the chairman at the 2019AGM declared the nominations to form the council. The applicants strongly assert that no such declaration was made or could be made by the chairman as there was not a quorum. Mr Clay for the second respondent submits that Mr Bellerby, as the chairman of the 2019AGM, declared that the three persons nominated were elected as members of the council.
A person is not entitled to vote at the election unless certain conditions are satisfied. This is provided for in s 120 of the ST Act as follows:[22]
120. Voting
(1)The owner of each lot in a strata titles scheme is entitled to 1 vote on a proposed resolution of the strata company.
(2)However, the owner of a lot is not entitled to cast the vote attached to the lot if -
(a)the resolution is not required to be a unanimous resolution or a resolution without dissent and is not a resolution for postponing the expiry day for a leasehold scheme or a termination resolution; and
(b)there is an outstanding amount recoverable under this Act owed to the strata company by the owner of the lot[.]
[22] Sch 1 by-law 14(6) of the ST Act (as it applied prior to 1 May 2020) similarly provided as follows:
An AGM must be held each year with no more than 15 months passing between meetings (s 127(1) of the ST Act). There are a number of matters that must be included as an item of business on the agenda for each annual general meeting (s 127(3) ST Act). They are:
…
(a)election of council members;
(b)consideration of accounts; and
(c)the presentation of copies of certificates and schedules for the insurance required under the ST Act, current at the date of the meeting.
An EGM of a strata company is a general meeting of the strata company other than an AGM and:
(a)may be convened by the council of the strata company as the council thinks fit; and
(b)must be convened by the council of the strata company on the written request of owners entitled to 25 per cent or more of the unit entitlements of the lots in the scheme.
(s 128(1) and s 128(2) of the ST Act).
The owners making the written request or any of them holding more than 50 per cent of the unit entitlements of the lots in the scheme, may convene an EGM if the council does not take steps to convene the meeting within 21 days of the request. This EGM must be held within three months starting from the day the request was made. All business transacted at an EGM is taken to be special business (s 128(3), s 128(4), s 128(5), and s 128(6) of the ST Act).

Witness evidence

Ms Pearce

Ms Pearce's evidence may be summarised as follows:[23]
[23] ts 65-96, 13 May 2021 and Exhibit 1, HB at page 635.
a)She and Mr Pearce are the owners of Lot 2 on Strata Plan 25819.
b)She does not recall receiving an email from Mr Bellerby of Bellcourt dated 26 November 2019 with a notice of the 2019AGM.[24] However she does recall receiving the agenda for the 2019AGM[25] and she did attend the 2019AGM where 14 people attended in person and four owners were represented by proxy. The 2019AGM was chaired by Mr Bellerby and Ms Butter-Kerr took the minutes.
[24] ts 81, 13 May 2021.
[25] ts 83, 13 May 2021 and Exhibit 1, HB at page 867.
c)In relation to the 2019AGM:
i)It was unanimously decided that the council would comprise seven members.
ii)Mr Merifield was nominated by Mr Clay. Mr Clay nominated Mr Merifield and Keyrise.
iii)Mr Clay was 'unfinancial'.
iv)No one from Keyrise was in attendance.
v)No council was declared by the chairman.
vi)Discussion was had about termination of the strata scheme and a motion was carried that the strata company call an EGM to be held on 17 March 2020 to resolve by unanimous resolution to terminate the strata scheme. Several owners including Mr Clay voted against the motion.
d)She did not recall receiving an email from Mr Bellerby dated 13 December 2019, however upon reading it, she accepts that it reflects a correct and true representation of what occurred at the 2019AGM in relation to the make-up of the council.[26]
e)In regards to an email dated 14 January 2020 from Mr Bellerby, she takes issue with the reference to 'the 2 councillors validly appointed at the AGM'. She does not know who the two councillors appointed are as the chairman did not make a declaration that there was a council.[27]
f)In the email dated 20 January 2020 from Mr Bellerby, she understands that his reference to 'Council of Owners (COO) are trying to terminate Atkinson Legal' in the first sentence to be a reference to Mr Clay, Mr Trewenack, Mr Merifield and Mr Brown who is a director of Keyrise.[28] She takes issue with the reference to the council as she does not accept Mr Clay, Mr Trewenack, Mr Merifield and Mr Brown/Keyrise to be members of the council. For similar reasons, she takes issue with the reference to the '3 elected councillors' in Mr Bellerby's email dated 31 January 2020.[29]
g)An EGM was held on 17 March 2020 where the 2019AGM minutes were passed as true and correct. She cannot recall who chaired that meeting, but it was not Mr Bellerby as he was away. The chairman stated that 'due to insufficient nominations for the [c]ouncil [ ] and in accordance with Schedule 1 by-law 4 (11 and 12), the functions of the [c]ouncil must therefore be performed by the proprietors in general meetings of the strata company'. She accepted that the motion to amend item 6.4 of the minutes of the 2019AGM was passed unanimously at the EGM on 17 March 2020. The amendment to item 6.4 was:[30]
As was highlighted by the Chair, due to insufficient nominations for the [council] and in accordance with Schedule 1 bylaw 4 (11 & 12), the functions of the [c]ouncil must therefore be performed by the proprietors in general meetings of the strata company.

Ms Torre

[26] ts 84, 13 May 2021.

[27] ts 86, 13 May 2021.

[28] ts 88-90, 13 May 2021.

[29] ts 92, 13 May 2021 and Exhibit 1, HB at page 876.

[30] Exhibit 1, HB at page 594.

Ms Torre's evidence may be summarised as follows:[31]
[31] ts 97-122, 13 May 2021 and Exhibit 1, HB at pages 638-639.
a)She attended the 2019AGM as an observer for her husband who is a part owner of Lot 3 on Strata Plan 25819.
b)In relation to the 2019AGM:
i)One of the agenda items was the election of members to the council. This was necessary because Mr Jeffrey Shane White was no longer the administrator for the strata scheme. Only two nominations, that from Mr Clay and Mr Merifield were made and only one proxy nomination whereby Mr Clay nominated Mr Brown from Keyrise was submitted. However, Mr Brown did not provide a written acceptance form and he was not at the meeting to accept the nomination. She recalls Mr Bellerby asking Mr Clay for the proxy but Mr Clay did not have it.
ii)As the council was to comprise seven members (as required by an earlier motion that had been passed), insufficient nominations were received as a minimum of four had to be elected for the council to be quorate. The consequence was there was no need to hold a vote or ballot. As there no council, all owners were the council.
iii)Even if the proxy for Keyrise had been provided and accepted there were still not enough nominations (a minimum of four) and therefore there still could not be a vote or ballot.
iv)There was discussion either before or at the commencement of the 2019AGM as to whether Mr Clay was 'unfinancial'. She recalls Mr Clay stating that he had paid by way of a cheque to the strata company either the day before or before the 2019AGM had commenced.
v)There was also the issue as who would be chairman of the meeting. Mr Clay nominated himself but there was dissatisfaction in the room. This resulting in Mr De'Pannone nominating himself as the chairman in an effort to calm things down. Mr Bellerby stated that if he was not the chairman he would leave. In the end, Mr Bellerby stayed and was the chairman.
vi)Mr Bellerby followed the procedure as set out in agenda item 7 for the election of the council.
vii)Discussion was had, and a motion was carried that the strata company call an EGM for 17 March 2020 to resolve to terminate the strata scheme by a unanimous resolution. That is provided for in item 7.2 of the minutes of the 2019AGM.
c)At the EGM on 17 March 2020 the minutes of the 2019AGM were accepted as correct. The minutes reflect that no members had been elected to the council.
d)She has not read any of the emails to do with the strata complex for the past three years. Because of this she does not question what Mr Bellerby stated in emails to the owners (for example the email by Mr Bellerby dated 13 December 2019)[32] because nothing in the emails refers directly to her. She could not confirm if what was stated in the emails by Mr Bellerby was true and correct as she cannot answer for what other people have written.
e)The tenure of Mr White as the administrator of the strata scheme ended and that is the reason, they had to have the 2019AGM to elect a council to go forward. The administration ended in about January 2019, but it was extended by the Tribunal (differently constituted) for a further six months to September or October 2019 but Mr Clay opposed the extension. Mr White as the administrator appointed the council that was present and had been elected at the time he was appointed as administrator. However, at the start of the 2019AGM there was no council as all the members of the council had resigned. The persons appointed by the administrator were Mr Pearce, Mr Torre, Mrs Pavone, Ms Bernhardt and Ms Ladiszlai as documented in the record of the meeting of administrator dated 17 December 2018.[33]
f)Over the past few years there has been a reluctance by the owners to become involved with the administration of the strata complex because of personality issues and that some owners feel their concerns have not been addressed and therefore want change. That change was affected in 2016 when Mr White was appointed as the administrator but that resulted in disrespect being shown for all the owners. There are 18 owners and those that have involved themselves with the strata complex have been subjected to a continued treatment that has left them debilitated and tired because they just cannot seem to get anywhere.

Ms Ladiszlai

[32] Exhibit 1, HB at page 869.

[33] Exhibit 1, HB at page 326.

Ms Ladiszlai's evidence may be summarised as follows:[34]
[34] ts 125-144, 13 May 2021 and Exhibit 1, HB page 636.
a)In relation to the 2019AGM:
i)She arrived at the 2019AGM assuming Mr Bellerby would be the chairman because there was no council.
ii)Mr Clay put himself forward to be chairman but that was not agreed to so Mr De'Pannone nominated to be chairman to 'keep the peace'.
iii)Mr Bellerby stated that if he was not elected chairman, he would leave the meeting and facetiously stated he would leave the records at the door of the strata company. In the end, Mr Bellerby was the chairman as he had all the documents and an understanding of all the financials. Mr Bellerby also had all the proxies.
iv)Mr Clay had an altercation with Mr Bellerby and she thinks it was around the suggestion that Mr Clay was 'unfinancial' and so could not be the chairman. Mr Clay said words to the effect that he had paid his outstanding fees that morning and gave Mr Bellerby a sheet of paper showing the payment.
v)Mr Bellerby followed the 'spirit' of procedure set out in item 7 of the agenda for the election of members to the council. Mr Bellerby did not need to conduct a ballot because there were insufficient nominations. In that regard, Mr Bellerby's email of 13 December 2019 is a true and correct representation of what occurred at the 2019AGM. In respect of the last point of that email, she queries who are the 'current elected councillors' because as far as she understood there were none because the quorum (of four) was not achieved. She did not query Mr Bellerby at the time because she did not have the energy.
b)In 2017 she was on the council but not much got done. This was because at every turn Mr Clay filed an application with the Tribunal. Every time the council tried to do something there was an objection.
c)In or about January 2019 Mr White as the administrator explained that he was finishing up and handing the reigns back to the council that had been elected before his appointment as administrator. The council attended the offices of Bellcourt where Mr White gave a report orally on what he had done, and he then handed everything back to the council. As a result of Mr White's actions some of the members of the council understood they were part of the council, others did not see it that way and some people resigned. Prior to Mr White's appointment as the administrator, the council elected at the AGM held on 6 May 2017 comprised Mr Pearce, Mr Torre, Mrs Pavone, Ms Berhardt and herself. In the Record of Meeting of 10 December 2018 at item 6.6 she accepts that Mr White as the administrator appointed these same people to be the council following the end of his tenure as administrator. Someone from Bellcourt took on the role as secretary. At that time, no owner took on the role of strata secretary.
d)Shortly after Mr White ceased to be the administrator, the members of the council resigned.
e)She understood from Mr Bellerby's email of 26 November 2019 that Bellcourt would be continuing to manage the strata company without the presence of the council. She accepts that Bellcourt had been operating without the council for many months in the lead up to the 2019AGM. However, if there is no council then all the owners comprise the council and they (all the owners) were acting as the council in the lead up to the 2019AGM.
f)Apart from paying the electricity bill, the lawn mower man, and the maintenance man, Bellcourt did minimal work in the lead up to the 2019AGM.
g)In regard to Mr Bellerby's email of 14 January 2020 she queries who are the two councillors as she is not clear that there was a council following the 2019AGM.

Mr Pearce

Mr Pearce's evidence may be summarised as follows:[35]
[35] ts 144-162, 13 May 2021 and Exhibit 1, HB at page 634.
a)The council has not operated since 2016.
b)He was a member of the council for about three weeks in 2017 which is when Mr Clay had not been elected to the council. Shortly after that, Mr Clay made his first of many applications to the Tribunal seeking to halt him and others being members of the council and not long after that Mr White was appointed as the administrator.
c)He did not agree to be on council following Mr White ceasing to be the administrator in January 2019.
d)The main contention of the 2019AGM was the election of members to the council. Twelve of the eighteen owners attended the 2019AGM. A motion to have seven council members was carried. Mr Merifield nominated Mr Clay. Mr Clay nominated Mr Merifield and Keyrise. No one from Keyrise was present at the 2019AGM and no nomination form was presented to the chairman. In the end, no one was elected to council.
e)In Mr Bellerby's emails where he refers to elected councillors, he is incorrect as there was no election or ballot at the 2019AGM.
f)Mr Clay was 'unfinancial' for the 2019AGM because he had a debt owing to the strata company of some $3,383.91 as there was a costs order against Mr Clay which arose from proceedings in the Supreme Court.
g)He received from Mr Bellerby a cheque for about $171,000 and the records for the strata company on 12 May 2021. He did not volunteer that information because he was not asked any questions about the moneys or records of the strata company.[36]

Mr De'Pannone

[36] ts 5, 6 July 2021.

Mr De'Pannone's evidence may be summarised as follows:[37]
[37] ts 162-184, 13 May 2021 and Exhibit 1, HB at pages 628-630.
a)Mr White was appointed as the administrator. At the end of his term, Mr White told the councillors that as they were the council prior to his appointment that they would now carry on as the council. This was some 18 months to two years after the administration had commenced and one of the councillors, Ms Bernhardt had sold her share and the previous chairman Mr Berhardt was no longer an owner. Mr Anthony Torre was very ill and so was not available to be a member of the council which left Mr Pearce and Ms Ladiszlai.
b)In relation to the 2019AGM:
i)It was agreed that the council should be made up of seven members.
ii)It was suggested by Mr Clay that he be chairman but Mr Bellerby refused. In the end, Mr Bellerby was the chairman and Ms ButtersKerr was the secretary or minute taker for the meeting.
iii)Mr Bellerby followed the procedure set out in item 7 of the agenda except for items 7.3 and 7.4 which were not required. A ballot was not undertaken as there were insufficient nominations (as a quorum of four was required).
iv)Mr Clay nominated Mr Merifield and Keyrise. Mr Merifield nominated Mr Clay. Neither Keyrise nor Mr Brown (for Keyrise) presented a nomination form to the chairman. Keyrise was 'unfinancial'. But whether Keyrise is 'unfinancial' or not is immaterial because Mr Clay nominated Keyrise and it is Mr Clay who was 'unfinancial' which makes Keyrise's nomination invalid.
v)Mr Clay was 'unfinancial' and therefore he could not nominate either Mr Merifield or Keyrise. Mr Clay owes the strata company $3,358.91 in regards to a costs claim in proceedings before the Supreme Court in matters CIV 1301/2017 and CIV 1514/2018. On 3 October 2020 Mr Clay proposed to extinguish the debt he owed to the strata company.
vi)There was only one valid nomination as Mr Clay was 'unfinancial' and therefore no council was elected. The only valid nomination was that of Mr Merifield who nominated Mr Clay.
c)Mr Bellerby made an error or a 'slip of his pen' in writing various emails after the 2019AGM that the three people who nominated were elected to council. It is perhaps for Mr Bellerby to say three people were nominated for council, but it is clear they did not qualify as being elected as there was not the minimum (four) to form the council. Mr Bellerby got it wrong in referring to elected person(s) because he may not have known how to address the situation.
d)At the EGM held on 17 March 2020 the minutes of the 2019AGM were passed as being true and correct by the majority of owners.

Mr Bellerby

Mr Bellerby's evidence may be summarised as follows:[38]
[38] ts 194-257, 14 May 2021 and Exhibit 1, HB at pages 640-680.
a)Bellcourt was providing administrative services behind the scenes when Mr White was the administrator. His communication with the owners did not commence until after Mr White ceased as the administrator. Mr White, as the administrator, was the same as the council.
b)There were no council just before the 2019AGM and it was Mr White, as the administrator, who requested that the AGM be convened just before he ceased as the administrator in January 2019. Mr White did not give a specific date for the AGM to be convened.
c)When he sent out the agenda for the 2019AGM, no owner had convened or had requested for the convening of an AGM. However, he did ask the owners to let him know if they had any objection to the calling of the 2019AGM.
d)The reference to the secretary of the strata company in the notice of AGM for the 2019AGM is incorrect as there was no strata secretary. He was operating on standing instructions from Mr White, the administrator, most of which were in relation to the need to execute the work orders with Johns Lyng and the need to call an AGM.
e)Bellcourt paid invoices as the strata manager's contract allows for Bellcourt to incur costs of up to $2,000 for the strata scheme in any one month. Apart from paying for the works progressed by Johns Lyng which were substantial and legal work from Atkinson Legal who was appointed by Mr White as the administrator, Bellcourt paid the cleaners, the gardener and other minor maintenance items. It was very challenging dealing with what Mr White, as the administrator, had put into place prior to him finishing up and the obligations that the strata company had in paying for what the administrator had authorised.
f)Mr White appointed each of the people who were on the council before his appointment as the administrator to be on council. They all resigned within a couple of months of Mr White's appointment as administrator ending in January 2019.
g)He does not recall receiving any communication from Mr Pearce wherein he stated that he did not accept his appointment as a member of the council. He recalls that Mr Clay and some owners may have requisitioned for an AGM in April 2019, but his recollection is that his request at the time was not supported by 50% of the owners.
h)At no time did he communicate with the owners to inform them that there was no council and that an AGM needed to be called to elect a new council.
i)In his email of 26 November 2019, he was writing on the basis that following the 2019AGM there would not be a council elected. This was based on feedback he had received from owners who did not want to go on the council if Mr Clay was going to nominate because those owners were concerned that Mr Clay would significantly challenge them based on history.
j)Following the 2019AGM he was relying on Atkinson Legal on how to respond to emails from Mr Clay. It was a challenge in writing each email because he was pulled up on everything by Mr Clay. He was 'crossexamined' on the content of every email he wrote. He found himself 'on his toes' with Mr Clay as opposed to other owners. This is because Mr Clay is somewhat inflexible with regards to other people's viewpoints. In most instances his emails went to the strata company (all the owners).
k)At the 2019AGM it was resolved that the council would comprise seven members. Mr Clay was aware that the 2019AGM was being conducted based on him being financial and 'unfinancial' and that he required a nomination form from a financial owner. Mr Merifield nominated Mr Clay. Mr Clay nominated Mr Merifield and Keyrise. He did not receive a nomination form from Keyrise.
l)He accepts that the existence of an outstanding financial position of an owner is not a bar to them being a member of the council.
m)He made every attempt to try and contact the owners to ask them to nominate for council but could not recall who he contacted, apart from that he contacted Mr and Mrs Pearce and Mr De'Pannone.
n)The 2019AGM determined that there would be an EGM on 17 March 2021 to explore the option around termination of the strata scheme.
o)The decision in Grant and The Owners of Rosneath Farm Strata Plan 35452 [2006] WASAT 162 (Rosneath) concerns the validity of a by-law and not as suggested by Mr Clay that the decision is authority for the proposition that a strata company cannot delegate its decision-making powers to bodies external to the council.
p)He is aware that for many years the strata company had numerous problems trying to progress a general meeting and thus the appointment of an administrator. He did not want to find himself in a situation where every single motion would be argued with counterpoints and therefore he did not want to be involved in the AGM if he was not the chairman as it would have lost all structure. That is why he threatened to leave all the records at 'the doorstep' of the strata company, metaphorically speaking.
q)In seeking legal advice from Mr Alex Shaw (Mr Shaw) at Atkinson Legal, he informed Mr Shaw that there were three persons elected to council at the 2019AGM.
r)In his email of 14 January 2020 to the owners he, on the recommendation of Mr Shaw, strongly encouraged for the calling of an EGM to get the minutes of the 2019AGM approved because there was a misunderstanding by some councillors about which motions had been passed and also to deal with any outstanding matters.
s)He did not forward all requisitions received to Mr Clay and to Mr Merifield and others because there was a lot of content in those requisitions that did not warrant or require sharing. However, he did email to Mr Clay and others a table listing the owners who had requisitioned the EGM.
t)Mr Clay's authority is only, as stated at the 2019AGM and subsequently, to convene an AGM. Mr Clay had no authority to terminate contracts (such as the contract for legal services with Atkinson Legal) as there was no council. There was no election held at the 2019AGM because there were insufficient nominations, and by default Mr Clay became a member of the council. It still needs to be determined if Mr Merifield and Keyrise are members of the council as it will depend on whether Mr Clay was 'unfinancial'.
u)On the morning of the 2019AGM, Bellcourt's accounts section reconciled payments using the program, PropertyIQ, and noted Mr Clay was in arrears $249.18 and therefore was unfinancial. He is not an accountant.
v)Once Mr White was no longer the administrator, they accepted authority from the strata company to issue the levy notices to the owners.

Ms Butters-Kerr

Ms Butters-Kerr's evidence may be summarised as follows:[39]
a)Mr Bellerby was chairman of the 2019AGM while she took the minutes.
b)The document taken by Mr Bellerby from Mr Clay relating to Keyrise only included a proxy form that Mr Bellerby passed to her to take a photocopy of. At no point did she see a consent to serve on council form in the name of Keyrise. She does not know if documents were taken from Mr Clay after the 2019AGM started.
c)The minutes of the 2019AGM were passed at the EGM on 17 March 2020 and represent a true copy of the proceeding subject to the corrections made at the EGM.
d)She attended the EGM on 17 March 2020. Mr Bellerby attended that EGM by telephone to answer questions.
e)There were three members of the council elected at the 2019AGM as stated in an email dated 13 December 2020 from Mr Bellerby to the owners.

Mr Clay

[39] ts 259-266, 14 May 2021 and Exhibit 1, HB at pages 683-716.

Mr Clay's evidence may be summarised as follows:[40]
[40] ts 267-305, 14 May 2021 and ts 4, 6 July 2021 and Exhibit 1, HB at pages 854-904.
a)He owns Lot 18 and has been the owner since the building was constructed in 1964.
b)He was a member of the council from December 2006 until February 2016. There was a change of the council in February 2016 and he had no objection to that.
c)Mr Bellerby had no authority to act without getting approval from the strata company. Following the administrator finishing up in January 2019, Mr Bellerby ought to have been making every effort to call an AGM for the election of members to the council at the earliest possible time.
d)Mr White as the administrator gave the Tribunal an undertaking that he would call an AGM to be held at just before or just after the end of his administration for the purpose of there being an election of members to the council.[41] Mr White failed to do this. Mr White simply stated that the former council (prior to his appointment) continued as the council at the end of his term as administrator.
[41] ts 93, 6 July 2021.
e)Even though it was stated that the council was not active and/or that councillors resigned shortly after Mr White's term ended in January 2019, there is no evidence of their resignation in writing (as required by Sch 1 of the ST Act (as it was prior to 1 May 2020) bylaw 4(9)(b)). In any event, at the end of the 2019AGM those councillors ceased to be members of the council and that in itself gave the newly elected members of the council the authority to appoint additional or replacement members of the council to make up the required quorum (four members of the council).[42]
[42] ts 94, 6 July 2021.
f)In an email sent to owners notifying of the 2019AGM, Mr Bellerby stated 'The agenda has been prepared on the basis that there is no Council of Owners'. The statement is not clear and there was no clarification from Mr Bellerby. He does not know if there was a chairman or secretary of the council before the 2019AGM.
g)In regards to the 2019AGM:
i)The election of the council broadly followed the course as set out in the agenda.
ii)He moved a motion that the number of council members be set at seven.
iii)There was not any dispute initially as to whether he and others were elected to council. The dispute arose later as to whether he and the other council members had the power or authority to appoint a new member to the council.
iv)He received some requisitions to hold an EGM and there was a motion to terminate the strata scheme.
v)He was not 'unfinancial' as he had paid $9,000 before the start of the 2019AGM and was in credit. The Owner Ledger shows an opening balance of $230.02 as at 1 October 2019. If there was any amount owing prior to 1 October 2019 it would have been reflected in the opening balance. He disputes the figure shown at Exhibit 4 of $519.16 recorded on the Owner Ledger with the details as 'interest paid' on 12 December 2019 leaving a balance owing of $249.18 as at 12 December 2019.
vi)Mr Merifield nominated him to be a member of the council. He nominated Mr Merifield and Keyrise. Both he and Mr Merifield consented in person. He had a written consent from Keyrise which was snatched by Mr Bellerby from his four or five sheets of paper which may have been stapled or clipped together. It may be that Mr Bellerby simply identified the proxy of Keyrise and handed it to Ms Butters-Kerr to go and take a copy of it. There may have been no reason for Ms Butters-Kerr to photocopy Keyrise's consent form and so Mr Bellerby may not have given it any attention. He cannot recall if Mr Bellerby gave the documents back to him.
vii)Keyrise, as a company, can be elected as a member of the council. The company can then nominate its representative to be on council. It was not necessary for him to nominate Mr Brown specifically, as the representative of Keyrise.
viii)Keyrise gave to him a proxy form dated 10 December 2019. He also had a proxy form from one or two other persons in case they were not able to attend the 2019AGM at the last minute.
ix)There was no ballot as there were only three nominations. Mr Bellerby declared all three nominees to be elected as members of the council. Mr Bellerby then asserted that the three nominees would only have power to call an AGM which he disputed.
h)On the day after the 2019AGM in an email to owners Mr Bellerby referred to the 'three currently elected councillors'. Further, in numerous other emails (for example 10, 13, 14, 20, 23 and 31 January 2020) Mr Bellerby referred to the 'three members of the council'. This is supported by a letter dated 13 January 2020 from Atkinson Legal which stated in part, 'It is our understanding that the recent AGM set the number of councillors at 7, but only 3 were elected'.
i)On 18 December 2019 the three councillors resolved to appoint Mr Trewenack, with his consent, as a member of the council.
j)On 25 December 2019 the council appointed him as chairman and secretary and Mr Trewenack as treasurer.
k)On 7 January 2020 the council resolved to appoint Mr Wenn, with his consent, as a member of the council.
l)Following the 2019AGM he and the other elected councillors sought legal advice from Vogt Graham as to whether the three elected council members had the power or authority to appoint additional members to the council. This was on the basis that there was no dispute that they had been elected to council as reflected in the correspondence from Mr Bellerby. In addition, they asked Vogt Graham to be the solicitors for the strata company as there were two matters before the Supreme Court which they wanted to have stayed so that they could look to getting the records of the strata company and to see if an amicable settlement could be reached without incurring further legal costs.
m)The minutes of the 2019AGM signed by Mr Clay and Mr Merifield[43] were provided to Vogt Graham as this was the document prepared by the strata secretary (himself) who was appointed following the 2019AGM. There was no strata secretary prior to or at the time of the 2019AGM.
n)Bellcourt was not authorised to prepare minutes of the 2019AGM.
o)He, as the strata secretary, called an EGM for 7 March 2020. Insufficient owners attended the first EGM, so it was adjourned for seven days and an EGM was held on 14 March 2020.
p)The EGM called by Mr Bellerby and/or by others for 17 March 2020 was done without any power or authority under the ST Act.
q)Despite every effort, the issues did not go away. Hence, the current proceedings became necessary.
r)Neither Mr Pearce nor Mr Bellerby told the Tribunal that on 12 May 2021 that Mr Bellerby gave to Mr Pearce a cheque in the amount of about $171,000 and the records for the strata company that he was holding as the strata manager. The failure to make this disclosure during these proceedings goes to the creditability of them as witnesses.

Mr Luce

[43] Exhibit 1, HB at pages 765-766.

Mr Luce's evidence may be summarised as follows:[44]
[44] ts 13-31, 6 July 2021 and Exhibit 1, HB at pages 848-853.
a)He was a member of the council from August 2010 to February 2016 during which time he was the strata secretary for about two years.
b)He does not align himself with any owner(s). Rather, he reads the information he receives and forms his own view of the situation.
c)In regards to the 2019AGM:
i)It was a difficult meeting and there was a lot of discussion about whether Mr Clay was 'unfinancial'. He does not know if Mr Clay was 'unfinancial' and whether he owed any moneys to the strata company.
ii)He did not see or read the papers that Mr Bellerby snatched from Mr Clay. He does not recall any discussion about the papers.
iii)A motion was carried that they would have a council of up to seven members.
iv)There were nominations from three owners, one of which was a company. No ballot was held. He does not recall if the chairman made any declaration.
v)The three nominations were accepted because on 13 December 2019 Mr Bellerby emailed the owners and stated that only three people had nominated for council, and the question is whether the council could function because it needed to come up to a quorum of four. Mr Bellerby's email of 13 January 2021 similarly states that the council of three elected cannot operate until there is a quorum of four. The email from Mr Bellerby of 31 January 2021 conveys the same issue that there are three elected council members and the question is whether they have the legal capability to elect additional council members. In that same email of 31 January 2021, Mr Bellerby acknowledges that Mr Clay is a member of the council.
d)The 2019AGM minutes prepared by Mr Clay were inconsistent with his notes in parts. His notes appear to be consistent with the minutes prepared by Mr Bellerby, however, in his email of 21 December 2020, Mr Bellerby stated that only two owners nominated for council with Mr Clay being one of the two owners. This email is inconsistent with other emails sent by Mr Bellerby.
e)Having read Mr Clay's email of 10 January 2020, he understands the council to comprise Mr Trewenack, Keyrise, Mr Merifield and Mr Clay. He does not know when Mr Wenn became a member of the council.

Mr Merifield

Mr Merifield is aged 87. He is an owner occupier of Lot 11. He has known Mr Clay for about 40 years and has been on council with Mr Clay on three separate occasions. In giving his evidence, Mr Merifield stated that his memory was 'not good'.
Mr Clay for the second respondent submitted at hearing that in giving evidence, Mr Merifield had experienced a loss of medium-term memory and therefore the second respondent placed no reliance on Mr Merifield's evidence and recommended that it be disregarded.
In view of Mr Clay's concession, I have not considered Mr Merifield's evidence.

Mr Trewenack

Mr Trewenack's evidence may be summarised as follows:[45]
[45] ts 42-78, 6 July 2021 and Exhibit 1, HB at pages 885-888.
a)He has been a part owner of Lot 10 since about 2005. His parents purchased the lot in about 1974 and his sister left it to him in her Will. His father and Mr Clay's father were members of the council at about the same time.
b)Both Mr Clay and Mr Merifield were members of the council prior to 2016.
c)Even though Mr Clay wrote the questions in his witness statement, he answered and prepared his witness statement independently of Mr Clay.
d)In regards to the 2019AGM:
i)He was seated about seven people from the corner where Mr Bellerby was and he did not see the papers being snatched, however, he could hear conversation between parties. There were a lot of explanations and talking around the table and that Mr Bellerby seemed to be 'bulldozing'. He cannot say what the documents snatched were, but he recalls there was quite a kerfuffle. There was some conflict as to whether Mr Clay was 'unfinancial'. Nobody was aware of anybody owing anything.
ii)He wanted to nominate for council, but he could not because he was 'unfinancial'.
iii)There were three nominations. The other owners did not want to nominate, and he could not understand why that was because there had to be four for the council to have a quorum. The three nominations were accepted by Mr Bellerby which included the nomination of Mr Clay.
e)On 25 December 2020 a meeting was held by email whereby Mr Clay was appointed chairperson and secretary of the council. Meetings were conducted by email and the four members of the council would reply by email. That is why the minutes do not show the names of the persons attending the meeting. Not all the owners got notice of this meeting and of the other meetings.
f)Besides Mr Clay and Mr and Mrs Pearce, he had no idea who the other owners are. He only knows the names of other owners from the great screed of emails that have gone backwards and forwards between himself and Mr Bellerby.

Factual background

I note some key facts are not in any real dispute. I make the following findings of fact which are relevant to the issues to be determined by me in these proceedings:
a)On 17 December 2018 Mr White, as administrator, held a meeting with the owners. At that meeting, the administrator decided:
i)the number of members of council would remain at five as determined at the AGM held on 6 May 2017; and
(ii)the members of council as at 6 May 2017 (before his appointment) were to continue as the council following the end of his role as administrator. The council comprised: Mr Pearce, Mr A Torre, Mrs Pavone, Ms Bernhardt and Ms Ladiszlai.
b)All the members of council (Mr Pearce, Mr A Torre, Mrs Pavone, Ms Bernhardt and Ms Ladiszlai) resigned shortly after Mr White's role as administrator ended in January 2019.
c)Bellcourt issued a 'First and Final Arrears Notice' to owners on or about 18 November 2019.
d)On 26 November 2019, notice of the 2019AGM was emailed to the owners by Mr Bellerby signed as 'Strata Community Manager For and on behalf of The Owners of Carinya Court'.
e)The 2019AGM was held on 12 December 2019. Mr Bellerby was appointed chairperson. In respect of the 2019AGM:
i)the motion that the number of members of the council be seven was carried; and
ii)three owners were nominated to be members of the council: Mr Merifield, Mr Clay and Keyrise.
Other key facts are in dispute by the parties. Having considered all the evidence before the Tribunal, I make the following findings of fact which are relevant to the issues to be determined by me in these proceedings:
a)It is inferred from Mr Bellerby's emails (from 13 December 2019 to 28 February 2020) that he, as the chairman, received consent from Keyrise to be nominated to the council.
b)No ballot was held at the 2019AGM.
c)No declaration of a council was made by the chairman at the 2019AGM as a quorum (of four) was not achieved.
I have not made a finding of fact as to whether Mr Clay was 'unfinancial' or whether he was disentitled to vote at the 2019AGM. The reasons for this are set out below at [61] to [73].

Parties' contentions

The owners' main contentions may be summarised as follows:
•Mr Clay was 'unfinancial' prior to the commencement of the 2019AGM. The invoice for levies issued by Bellcourt to Mr Clay on 18 November 2019 was authorised by the owners in general meeting. The invoice reflected outstanding levies of $8,993.42. Further, the invoice specified interest on unpaid levies to be charged at 15.00% p.a.
•There were three nominations for council: Mr Clay, Mr Merifield and Keyrise. The nomination of Keyrise was not accompanied by a written consent notice as required by Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 5(3)(a). Due to insufficient nominations, there was no ballot and no council was declared. It was resolved to have an EGM on 17 March 2020 to terminate the strata scheme by unanimous resolution among other matters.
•The proper construction of Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4 is that as a quorum of four was not achieved, there is no council, a general meeting is to be called to elect members to the council.
•As there was not a quorum, most owners at the 2019AGM agreed that the functions of council would be performed by all the owners in general meeting of the strata company (s 138 of the ST Act).[46]
•An EGM was held on 17 March 2020. The minutes of the 2019AGM prepared by Bellcourt were confirmed as being true and correct. The motion to terminate the strata scheme was not passed.
[46] See also s 46 of the ST Act (as it was prior to 1 May 2020).
As noted earlier, Mr Clay asserts that he has not appeared, filed documents or represented himself in his personal capacity in these proceedings and none of the orders sought by the applicants are sought against him and therefore he should be removed as a respondent in these proceedings. Further, Mr Clay submits that the application is against and concerns the strata company only.
The second respondent's main contentions may be summarised as follows:
•Mr Clay was not 'unfinancial' before the commencement of the 2019AGM.
•There were three nominations, Mr Clay, Mr Merifield and Keyrise. Each was declared a member of the council. As the council they were authorised by application of Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4 to appoint new member(s) to the council to get to the required quorum (of four). Following the appointment of Mr Trewenack to council on 18 December 2020 a quorum was achieved. The council was comprised of Mr Clay, Mr Merifield, Keyrise and Mr Trewenack.
•Bellcourt had no authority to prepare the minutes of the 2019AGM.
•The EGM called by Bellcourt for 17 March 2020 is invalid.
•The EGMs called by Mr Clay (as the appointed strata secretary on 25 December 2020) for 7 March 2020 and 14 March 2020 are valid.
I now turn to address each of the six issues identified at [23] above.

Issue 1 - Whether Mr Clay was:

(a) 'unfinancial' before the commencement of the 2019AGM; and
(b) disentitled by s 120(2)(b) of the ST Act from voting at the 2019AGM?

It is Mr Clay's position that he was not 'unfinancial' before the commencement of the 2019AGM.
Mr Clay asserts for the second respondent that there was no authority for Bellcourt to issue levy notices to the owners as there was no council at the end of January 2019 when Mr White's term, as the administrator, ended as the evidence from the members of the council appointed by the administrator was that they had all resigned in early 2019. Further, Mr Clay submits that even if there was a council, it was not acting or performing its duties and therefore there is a miscarriage such that the liability to pay levies at the direction of a strata manager to a trust account owned and operated by the strata manager does not exist.
Mr Clay made closing submissions that the owners had not been notified of any bank account in the name of the strata company and accordingly even if an owner had not paid the levies per the levy notice/tax invoice issued by Bellcourt for the period 1 July 2019 to 1 October 2019, that would not result in the owner becoming 'unfinancial' and could not have any liability for interest on such levies.
Mr Clay's evidence is that he paid $9,000 to the strata company on 12 December 2019 before the commencement of the 2019AGM leaving him with a credit of $6.58. Mr Clay explained that on the date of notice of meeting was issued on 26 November 2019, he owed $8,934.28 for levies and interest per the tax invoice issued to him by Bellcourt titled 'First and Final Arrears Notice'.[47] Mr Clay refutes that he owed $249.18 as at 12 December 2019. Further, My Clay asserts that the Owner Ledger which reflects an amount of $519.16 on 12 December 2019 as 'Receipt: Standard Levy for 01/07/2019 to 30/09/2019 Levy Ref#79 Interest Paid' [48] is either an error or a fabrication.
[47] Exhibit 1, HB at page 762.
[48] Exhibit 4.
It is common ground that Mr Merifield nominated Mr Clay for council at the 2019AGM. It is also common ground that Mr Clay nominated Mr Merifield and Keyrise for council at the 2019AGM.
In giving evidence as to Mr Clay's 'unfinancial' status, Mr Bellerby relied on Bellcourt's accounts section who, according to Mr Bellerby, reconciled payments using the program, PropertyIQ which on the morning of 12 December 2019 before the commencement of the 2019AGM showed Mr Clay was in arrears $249.18 and therefore, in his view, Mr Clay was 'unfinancial'.
Further, it is Mr Bellerby's evidence that once Mr White was no longer the administrator, Bellcourt, as the strata manager, accepted and acted on the authority of the strata company (that is, all of the owners) to issue the levy notices to the owners. The applicants support this position and referred the Tribunal to s 46 of the ST Act (as it was prior to 1 May 2020).[49]
[49] The equivalent section in the ST Act is s 138.
In closing submissions, the applicants submit that absent an audit of Mr Clay's account, the position of his 'unfinancial' status before the commencement of the 2019AGM remains unclear. However, the applicants submit that the levy notice issued to Mr Clay, and all of the owners, includes the statement that '[s]ection 36 of the [ST Act (as it was prior to 1 May 2020)] provides for interest to be charged on unpaid levies and the General Regulations 1996 prescribe the rate to be charged at 15.00% p.a'.
There is no common ground between the parties as to whether Mr Clay was 'unfinancial' before the commencement of the 2019AGM.
Mr Clay is adamant that he was in credit $6.58 before the commencement of the 2019AGM and therefore he was entitled to vote at the 2019AGM. In any event, Mr Clay reiterated that Bellcourt in issuing the levy notices to owners did so without the authority of the strata company as there was no council leading up to the 2019AGM.
The applicants and Mr Bellerby submit that Mr Clay was 'unfinancial' as evidenced by the strata manager's accounting system. The owners submitted in their written closing submissions that without an audit, it would not be possible to conclude one way or the other as to Mr Clay's 'unfinancial' status.
It would be unusual, in my view, for a strata company to require the financial status of every owner to be audited before a general meeting in order to conclude whether or not that owner owes moneys recoverable under the ST Act to the strata company. However, it may, on occasion be necessary for the strata company to appoint an independent auditor where the owner(s) and the strata company cannot agree if the owner(s) is financial or not.
In this case, for the reasons set out below under issue 3, (at [86] to [88]) it is not necessary for me to conclude whether Mr Clay was 'unfinancial' before the commencement of the 2019AGM. For similar reasons, it is not necessary for me to conclude in this case whether Mr Clay was disentitled by application of s 120(2)(b) of the ST Act from voting at the 2019AGM.

Issue 2 – Who, if anyone, was elected as a member of the council at the 2019AGM? - Was that election valid?

On 17 December 2018, at a meeting called by Mr White, he as the administrator decided that the council going forward would comprise Mr Peace, Mr A Torre, Mrs Pavone, Ms Bernhardt and Ms Ladiszlai. They were the owners elected at the AGM held on 6 May 2017, that is before Mr White was appointed as the administrator. This was reflected in the Record of Meeting of Administrator with Proprietors dated 17 December 2018.[50]
[50] Exhibit 1, HB at pages 324-326.
The evidence of Mr Pearce, Ms Ladiszlai and Mr Bellerby is that after the administration had ended in January 2019 but before the 2019AGM all the members of council had resigned. In addition, Mr Pearce stated that he never agreed to be a member of the council (from January 2019).
While some owners were surprised there was no council going into the 2019AGM, Mr Clay in his witness statement referred to an email from Mr Anthony Torre dated 1 April 2019 which stated that he was resigning from the council. Mr Clay also referred to an email from Mrs Pavone dated 3 April 2019 in which she stated that she had resigned as secretary of the council. Mrs Pavone's email was not clear if she had also resigned as a councillor. Finally, Mr Clay referred to an email from Mr Bellerby whereby notice of the 2019AGM was given wherein he stated '[t]he agenda has been prepared on the basis there is no Council of Owners'. Mr Clay submits that the context in which the statement by Mr Bellerby is made is unclear as to whether it referred to the immediate past or to the immediate future. In my view, Mr Bellerby could only be referring to the past (that is, a time before the 2019AGM) and not to the future.
The applicants in their closing written submissions contend that prior to, and after the 2019AGM the decisions of Bellcourt, as the strata manager, were authorised by the owners in general meeting pursuant to s 46 of the ST Act (as it was prior to 1 May 2020).[51]
[51] The equivalent section in the ST Act is s 138.
It is common ground that the event, being the 2019AGM, occurred. It is also not in dispute that Bellcourt prepared and circulated the agenda for the 2019AGM (to be held on 12 December 2019) by letter dated 26 November 2019 which included agenda item 7 as follows:
7.Election of Council of Owners
The Council of Owners has an obligation to put into effect the lawful decisions and the resolutions passed at any general meeting of the strata company and is to carry out the task of administering the day to day affairs of the strata company, in accordance with the Act and the bylaws governing the scheme. They are effectively the office bearers of the company, thus empowered by the proprietors when elected, to enforce the bylaws and control and manage the common property for the benefit of all proprietors. (Please note: there is currently no Office Bearers Liability Cover)
7.1Constitution of the Council (Schedule 1, by-law 4)
Proposed Motion - Determine that the number of persons of whom the Council shall consist shall be - (minimum 3, maximum 7) proprietors.
7.2Receive nominations of candidates for election to the Council.
7.3If required conduct a ballot to elect members of the Council.
7.4Resolve that the members of Council so nominated shall be accepted as the duly elected members of the strata council.
It is also common ground that prior to nominations being called for council at the 2019AGM, it was resolved that the council would comprise seven members in accordance with Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4(3).
Ms Torre, Mrs Pearce and Ms Ladiszlai all gave evidence that the chairman, Mr Bellerby, followed the procedure per agenda item 7 (see above at [78]). Mr Pearce and Mr De'Pannone agreed the procedure as set out in agenda item 7 was followed but as only three nominations were received, a ballot was not required, and no declaration was made by the chairman at the 2019AGM that these nominations were duly elected members of the council.
It is common ground that three nominations were received for council at the 2019AGM. Mr Merifield nominated Mr Clay. Mr Clay nominated Mr Merifield and Keyrise. As noted earlier, what was hotly contested was whether Mr Clay was 'unfinancial' before the commencement of the 2019AGM.
It is also common ground that there was no vote or ballot at the 2019AGM as there was less than the minimum number of nominations for the council to be quorate. What is in dispute is whether Mr Bellerby, as chairman, made a declaration as to who, if anyone, was elected to the council.
Mr Bellerby testified that he followed the procedure in agenda item 7 as set out above at [78]. In the minutes prepared by Ms Butters-Kerr it is recorded that the quorum required was four when a meeting is called and that there was only two valid members of the council. Further, it is recorded in those minutes that only the strata company (all of the owners) has the authority to appoint additional council members and that the council can only fill a casual vacancy which is created, for example, when a councillor resigns.
In subsequent emails from Mr Bellerby to the owners, for example, on the day following the 2019AGM, Mr Bellerby stated three owners were elected to the council and confirmed his position that there was not a quorum for the council to conduct business until such time as the current elected councillors call a general meeting of the strata company for the purposes of electing additional members to the council.
In his closing submissions for the second respondent, Mr Clay challenged Ms Butters-Kerr's minutes of the 2019AGM stating they are 'ambiguous, equivocal and erroneous with respect to the election' because the minutes reported that only two rather than three members were elected to council, that no nomination for Keyrise was handed to the chairperson and that Mr Clay was 'unfinancial'.
Mr Clay asserts that the minutes of the 2019AGM that he prepared are authorised by Sch 1 of the ST Act (as it was prior to 1 May 2020) bylaw 9(a). Those minutes report that 'the chairman declared Mr Clay, Mr Merifield and Keyrise to be elected members of the strata council pursuant to [Sch 1 of the ST Act (as it was prior to 1 May 2020)] bylaw 5'.
I find by its conduct the strata company (that is, all of the owners) authorised the strata manager (Bellcourt) to give notice of the 2019AGM and to hold the 2019AGM. In that respect, I find the notification of the 2019AGM was valid. Further, I find the number of persons who nominated to be members of the council was less than the minimum number of members required to form a quorum for the council. That is, there was less than four nominations. Because of this, it is my view, a ballot or election was not required (Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4(4). Therefore, it is not necessary for me to make a finding as to whether the election was valid. The consequence is, therefore, that no nominations or candidates could be declared elected to the council at the 2019AGM. This leads to the conclusion, in my view, that the strata company (all the owners) was and still is the council immediately following the conclusion of the 2019AGM.
To reach this conclusion (see above at [87]), it is necessary to refer to Sch 1 of the ST Act (as it was prior to 1 May 2020) by-laws 4(4), 4(9), 4(10), 4(12) and 4(13). I set out the proper construction of these bylaws below under issue 4 (at [92] to [108]).

Issue 3 – Whether the persons elected, if any, at the 2019AGM, may appoint another person (with the consent of that person) to be a member to the council - If 'no', must a general meeting be called?

For the reasons already explained (see [61] to [73]), it is my view that there were insufficient nominations or candidates at the 2019AGM for a council to be declared because a quorum (of four members) could not be achieved. There were only three nominations. The consequence is that as there was no council, the strata company (all the owners of the lots in the strata scheme) remained the council following the 2019AGM.
To comply with Sch 1 of the ST Act (as it was prior to 1 May 2020) bylaw 4(4), it will be necessary for a general meeting of the strata company to be called to elect members to the council.
This raises the question, was the 2020AGM valid? I will deal with that question under issue 5 at [112] to [113] below.

Issue 4 - What is the proper construction of Sch 1 of the ST Act (as it was prior to 1 May 2020) by-laws 4(10), 4(12) and 4(13)?

Schedule 1 of the ST Act (as it was prior to 1 May 2020) by-law 5 provides for the procedure and election of members of a council. That by-law provides a procedure for the election of the council where the number of candidates or nominations is equal to, or exceeds the number of councillors required to be appointed in accordance with Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4(3). It does not provide a procedure where the number of candidates or nominations is less than the number of councillors required to be appointed per Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4(3). In other words, Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 5 does not provide a procedure for the situation that has arisen in this case, where at the 2019AGM the number of candidates or nominations to be elected as members of the council was less than the minimum number for a quorum (four members) of the council.
The question arises, and on which this case turns, is, who can appoint additional members to the council to get to the required quorum? Is it only the strata company (that is, all of the owners) at a general meeting or can the candidates or nominations for the 2019AGM (which was less than the number required for a quorum of four) make such appointments?

Mr Clay's position for the second respondent is clear. In his witness statement he states:[52]
It was clear to me that until we could increase the number of members to 4, we would not have a quorum on the strata council or be able to carry out the business of the strata council save to appoint additional members pursuant to Schedule 1 [b]ylaw 4(10) and 4(12), or to call an EGM to appoint additional members.
[52] Exhibit 1, HB at page 860.
Following the above position, Mr Clay and two others held a meeting on 18 December 2019 whereby Mr Trewenack was appointed to the council. That appointment, according to Mr Clay, provided the required quorum (of four) for the council.
Mr Clay for the second respondent stated that he acted on the legal advice of Mr Mark Williams of Vogt Graham Lawyers.[53] Mr Williams' advice in summary was that on the basis that from the three nominations, the three members who were nominated were elected to council, it follows that Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4(12) is engaged and despite the council being inquorate (not having four members), it may act for the purpose of increasing the number of members to the council or convening a general meeting of the owners.
[53] Ibid, at pages 779-785.
Mr Williams in his advice refers to Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4(10) which he says expressly provides that a casual vacancy is not defined in the ST Act and the proper construction of this by-law is by reference to vacancies which have arisen by the manner prescribed in Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4(9) where the number of councillors is reduced below the level determined by the owners under Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4(3). Further, it was Mr Williams' advice to Mr Clay that acts done in 'good faith' by elected members pursuant to Sch 1 by-law 4(13) are valid.
In his advice, Mr Williams' acknowledged that the ST Act and Sch 1 of the ST Act (as it was prior to 1 May 2020) does not provide for the situation where the number of candidates or nominations (in this case three nominations) is less than the number determined by the owners to hold office as the council (in this case seven), Mr Williams stated that it is arguable that no council was elected at the 2019AGM. However, in Mr Williams' view, the result would be somewhat absurd as the result would defeat or frustrate one of the objects of the annual general meeting, being the election of the council.
Finally, Mr Williams concluded his advice by stating that a construction that promotes or enhances the objects of the ST Act should be preferred over one that does not (s 18 of the Interpretation Act 1984 (WA)).
The applicants reject Mr Clay's and the second respondent's position. The applicants submit that as there was not a quorum (of four), the strata company (that is, all of the owners) can only call a general meeting to seek nominations again to get to the required number for a quorum. They rely on a statement made by Mr Alex Shaw of Atkinson Legal in a letter dated 13 January 2020 to Registrar Whitbread of the Supreme Court in relation to proceedings CIV 1301 of 2017: Clay v Torre and CIV 1514 of 2018: Clay v Pearce. Mr Shaw stated in part:[54]
Whether there is presently a quorate strata council is in issue. It is our understanding the recent AGM set the number of councillors at 7, but only 3 were elected. A quorum of 4 is required for the council to make decisions. Those councillors elected at the AGM do not, in our view, have the capacity to make up the numbers by appointment. Rather, those elected councillors must convene a further general meeting to elect sufficient councillors.
[54] Ibid, at pages 770-771.
To determine which of these views is correct, it is necessary to properly construe Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4 and by-laws 4(4), 4(9), 4(10), 4(12) and 4(13).
It is useful to start by restating the relevant parts of Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4 as follows:
4.Constitution of Council
…
(4)Where there are more than 3 proprietors the members of the council shall be elected at each annual general meeting of the strata company or, if the number of proprietors increases to more than 3, at an extraordinary general meeting convened for the purpose.
…
(9)A member of the council vacates his office as a member of the council -
(a)if he dies or ceases to be a proprietor or a co-proprietor of a lot; or
(b)upon receipt by the strata company of notice in writing of his resignation from the office of member; or
(c)at the conclusion of an annual general meeting of the strata company at which an election of members of the council takes place and at which he is not elected or reelected; or
(d)in a case where he is a member of the council by reason of there not being more than 3 proprietors, upon an election of members of the council (as a result of there being an increase in the number of proprietors to more than 3) at which he is not elected; or
(e)where he is removed from office under sub-bylaw (8).
(10)Any casual vacancy on the council may be filled by the remaining members of the council, except that, in a case where a casual vacancy arises because of the removal from office of a member under sub-bylaw (8), the strata company may resolve that the casual vacancy shall be filled by the strata company at a general meeting.
…
(12)The continuing members of the council may act notwithstanding any vacancy in the council, but so long as the number of members is reduced below the number fixed by these by-laws as the quorum of the council, the continuing members or member of the council may act for the purpose of increasing the number of members of the council or convening a general meeting of the strata company, but for no other purpose.
(13)All acts done in good faith by the council shall, notwithstanding that it is afterwards discovered that there was some defect in the appointment or continuance in office of any member of the council, be as valid as if that member had been duly appointed or had duly continued in office.
I summarised the principles applicable to the proper construction of bylaws in The Owners of Del Mar Strata Plan 53989 and Dart Enterprises Pty Ltd [2020] WASAT 9 at [46] - [48]. I will apply those principles in determining the proper construction of Sch 1 of the ST Act (as it was prior to 1 May 2020) bylaw 4 (see above at [102]).
Schedule 1 of the ST Act (as it was prior to 1 May 2020) by-law 4(1) provides that the powers and duties of the strata company are, subject to any restriction imposed or direction given at a general meeting, be exercised and performed by the council and a meeting of the council at which a quorum is present shall be competent to exercise all or any of the authorities, functions or powers of the council.
Schedule 1 of the ST Act (as it was prior to 1 May 2020) bylaw 4(4) requires that where there are more than three owners, as is the case here, the members of the council shall be elected at each AGM of the strata company, or if the number of owners increases to more than three, at an EGM convened for that purpose. Further, the provision in Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4(4) for the election of additional council members at an extraordinary general meeting is for the purpose only of increasing the number of members of the council where that need is created pursuant to an increase in the number of owners above three. That is not the case here.
Mr Clay's contention that the three nominations at the 2019AGM must be elected to the council is mistaken.
I do not accept Mr Clay's position for the second respondent that Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4(12) authorises the nominated persons or the continuing members of the council to appoint additional owners where the number of members of the council was not quorate, in this case, four. In my view, as set out earlier, there was no members elected to form the council at the 2019AGM because the required quorum (of four) was not achieved.
In my view, in the context of the ST Act, Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4(12), construed objectively by reference to what a reasonable person would understand the language of the bylaw to mean, by-law 4(12) is only relevant or can only come into operation when a vacancy arises (such as set out in Sch 1 by-law 4(9) including the resignation or the death of a member of council) for a council that was quorate before the vacancy arose. In such a case, the continuing members (of the previously quorate council) may act to increase the number of members of council or convene a general meeting but for no other purpose. This construction of Sch 1 by-law 4(12) is consistent with the ST Act. As already explained the three nominations at the 2019AGM were insufficient to achieve a quorum (of four) and therefore there was no council following the 2019AGM.
It follows, in my view, that Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4(10), properly construed also deals with the filling of casual vacancies such as the resignation or death of a member of council for a council that was quorate before the vacancy arose. Again, in my view, this by-law cannot apply in this case as there was no members elected to form the council at the 2019AGM because the required quorum (of four) was not achieved.
Finally, Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4(13), construed objectively provides that acts done in good faith shall be valid notwithstanding any irregularity in the appointment of members to the council. Again, this must be construed in the context of the rest of Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4 and in particular by-law 4(12). This means, in my view, it is only those acts done in good faith by the council that was quorate and due to a vacancy (for example a member resigned from the council that was quorate) sought to appoint a member, that the appointment of the member would be valid. Again, in my view, this by-law cannot apply in this case as there was no members elected to the council at the 2019AGM because the required quorum (of four) was not achieved.
In conclusion, while I accept one of the objects of an AGM is for the election of the council, it is my view that the proper construction of Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4 and in particular by-law 4(12) in the context of the ST Act which deals with the governance and operation of strata title schemes and for related purposes, that the by-law is only relevant or can only come in to operation when a vacancy arises (such as set out in Sch 1 by-law 4(9) including the resignation or the death of a member of the council) for a council that was quorate before the vacancy arose. In such a case, the continuing members (of a previously quorate council) may act to increase the number of members of the council or convene a general meeting but for no other purpose. In this case there were no members elected to the council at the 2019AGM because the required quorum (of four) was not achieved and therefore Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 4(12) cannot apply.

Issue 5 - Who was elected as a member of the council, if anyone, at the AGM held on 3 October 2020 (2020AGM)? Was that election valid?

Mr Clay for the second respondent explained that on 18 and 19 September 2020 he and his fellow councillors met by email to vote on calling an AGM to be held on 3 October 2020. The minutes of these two meetings by email reflect that Mr Clay, Mr Jim Brown for Keyrise and Mr Merifield were in attendance.
As already explained earlier (see [92] to [111] above), there was no council following the 2019AGM because the required quorum (of four) was not achieved. Therefore, in my view, as there was no council, the AGM sought to be called for 3 October 2020 by Mr Clay is invalid. The consequence is therefore that no one was (or could be) elected as a member of the council (or the 'purported council') at the 2020AGM.

Issue 6 - Which of the EGMs held on 7 March 2020, 14 March 2020, and 17 March 2020, if any, was valid?

As explained earlier, in my view, there were no council following the 2019AGM because there were less than the minimum number of nominations (four) for the council to be quorate. This raises the question whether the EGMs held on 7 March 2020, 14 March 2020 and 17 March 2020, if any, are valid.
The starting point is to consider who can call an EGM. Sch 1 of the ST Act (as it was prior to 1 May 2020) by-laws 11 and 12 set out the procedure for proceedings at general meetings of the strata company. Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 11(2) provides that all general meetings other than the annual general meeting are EGMs.
The council may whenever it thinks fit, or upon requisition in writing by owners entitled to a quarter or more of the aggregate unit entitlement of the lots convene an EGM. This is provided for in Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 11(3). Further, notice of not less than 14 days of the EGM must be given to all owners and other specified persons. The notice must specify the place, the date and the hour of the meeting and in the case of special business the general nature of that business.
Mr Clay for the second respondent challenged the EGM called for 17 March 2020. Mr Clay asserted that the owners of Lot 3 and/or Bellcourt had no power under the ST Act or the by-laws to call or hold an EGM as explained in his email of 29 February 2020 sent to all owners. Mr Clay stated in that email, amongst other things, that Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 11 only authorises the owners to call an EGM when the requisite number of owners have requisitioned the council to call an EGM and the council fails to call the EGM.
Item 7.2 of the Minutes of the 2019AGM prepared by Bellcourt reflects that it was resolved that the strata company call an EGM to resolve by unanimous resolution to terminate the scheme. The chairperson declared the motion carried.[55] In contrast, item 5 of the Minutes of the 2019AGM prepared by Mr Clay reflects that a motion was put that the strata company call an EGM to resolve by unanimous resolution to terminate the strata scheme. Mr Clay called for a poll. It is recorded by Mr Clay that there is no record of voting for this motion.[56]
[55] Ibid, at page 64.
[56] Ibid, at page 388.
The two sets of minutes presented are in conflict. On the evidence before the Tribunal, it is not clear whether that the motion was carried. I decline to find that at the 2019AGM the motion to have an EGM on 17 March 2020 was carried.
There is other evidence before the Tribunal of the calling for an EGM on 17 March 2020.
According to an email from Mr Trewenack dated 1 March 2020 to the owners and Mr Bellerby it is noted that the owners of Lot 3 requisitioned the EGM for 17 March 2020.[57] Separately, Mr Bellerby in an undated email addressed to the 'Councillors' wrote that the owners of Lot 3 have requisitioned that an EGM be called for the 17 March 2020.[58]
[57] Ibid, at page 245.
[58] Ibid, at page 244.
A Notice of EGM (undated) was prepared by the owners of Lot 3. It provides for an EGM to be held at the office of Bellcourt at 2pm on 17 March 2020. Further, it states:[59]
Notice is hereby given by the motion passed at the AGM held 12^th December 2019 and further by the requisition request of Lot 3 supported by Lots 1 to 4, 6 to 8, 12, 15, 16 and 17 pursuant to [Sch] 1 by[-]law 11, that an [EGM] of [T]he Owners of Carinya Court Rockingham, Strata Plan 25819 will be held on [.]
[59] Ibid, at page 650.
According to the strata title, Lot 3's unit entitlement is 0.05 (12/235).
On the evidence before the Tribunal, it is not clear whether the required notice of the EGM, of not less than 14 days of the EGM to be held on 17 March 2020 was given. Further, it is not clear if that notice is supported by requisition in writing by owners entitled to a quarter or more of the aggregate unit entitlement of the lots. For these reasons, I again decline to find requirements of Sch 1 of the ST Act (as it was prior to 1 May 2020) by-law 11(2) are satisfied regarding an EGM on 17 March 2020. This means, in my view, that the EGM of 17 March 2020 is invalid.
Mr Clay's position for the second respondent is that the council (of which Mr Clay says he is a member) called an EGM for 7 March 2020.
Included in the Notice of the EGM to owners from Mr Clay the following items were listed as items to be dealt with at the EGM:
a)approval of the minutes of the 2019AGM that he prepared; and
b)to vote on the motion to terminate the strata scheme.
According to Mr Clay, there was not a quorum at the meeting on 7 March 2020 and the EGM was adjourned for seven days to 14 March 2020. As I have already found that there were no council following the 2019AGM, Mr Clay had no authority, in my view, to call the EGM for 7 March 2020 (and consequently for 14 March 2020). I therefore find both the EGM of 7 March 2020 and 14 March 2020 are invalid.
In summary, I find that none of the three EGMs (7 March 2020, 14 March 2020 and 17 March 2020) were valid.

Conclusion

The six issues (set out above at [23]) are answered as follows, in summary:
Issue 1:As there was no council following the 2019AGM (see Issues 2 and 3), it is not necessary to conclude if Mr Clay was 'unfinancial' before the commencement of the 2019AGM or whether he was disentitled by s 120(2)(b) of the ST Act from voting at the 2019AGM.
Issue 2:It is common ground that at the 2019AGM the motion was passed requiring a council of up to seven members with a quorum of four members. There were only three nominations for council at the 2019AGM and therefore no election was required. A quorum (four) was not achieved. The result is that there was no council following the 2019AGM.
Issue 3:As there was no council following the 2019AGM, the three nominations had no authority to make appointment of members to the council.
Issue 4:Sch 1 by-laws 4(4), 4(10), 4(12) and 4(13) properly construed means there was no council following the 2019AGM. The three nominations (or purported council) had no authority to appoint new members to the council.
Issue 5:The three nominations at the 2019AGM (or the purported council) had no authority to call the 2020AGM. That AGM is invalid.
Issue 6:The EGMs which the parties say were held on 7 March 2020, 14 March 2020 and 17 March 2020 are invalid.
The result is that following the 2019AGM the strata company (all of the owners) operates as the council.

What orders should the Tribunal make?

Reflecting back on the orders sought by the applicants (refer above at [6] - [7]), and the findings reached in respect of the six issues before me, as well as hearing oral submissions from the parties as to the form of the orders, I would make declarations and orders that cover the following:
a)The decisions and resolutions passed at the 2020AGM are invalid.
b)The decisions and resolutions passed at the EGMs of 7 March 2020, 14 March 2020 and 17 March 2020 are invalid.
c)A general meeting is to be called for the purpose of electing members to the council. Following the election of the council, a further general meeting is to be called to consider the minutes of the 2019AGM (see further at [132] below) and if it is necessary to determine whether Mr Clay was 'unfinancial' at 12 December 2019 (before the commencement of the 2019AGM). In this case, this may require the appointment of an independent auditor.
d)Also following the election of the council, the second respondent may consider taking action to recover moneys deposited into a bank account(s) opened by Mr Clay for the strata company following the 2019AGM.

I will not make an order concerning whether the minutes of the 2019AGM are a true and correct record of that meeting. I find that the minutes prepared by Bellcourt differ to those prepared by Mr Clay. Consequently, the owners in a general meeting will need to work through the minutes of the 2019AGM and confirm them or otherwise deal with the agenda items again.
Finally, I do not accept the applicants' request in their closing written submissions that I appoint an administrator for the purpose of arranging and holding an AGM of the owners and electing members to the council. The reason for this is that a general meeting is to be called for the purpose of electing members to the council.

Conclusion and orders

For the above reasons, I will make the following declarations and orders:
1.Pursuant to s 199(3)(d), s 200(1), s 200(2)(f)(ii), s 200(2)(f)(iii) and s 200(2)(l) of the Strata Titles Act 1985 (WA):
(a)All decisions and resolutions made by strata company at the extraordinary general meetings held on 7 March 2020, 14 March 2020 and 17 March 2020 and the Annual General Meeting held on 3 October 2020 are invalid.
(b)A general meeting of the strata company shall, within 28 days of these orders, be convened and presided over by Mr De'Pannone and the first Respondent for the purpose of electing members to the council. The Third applicant is to be secretary for that meeting.
(c)A further general meeting of the strata company shall be convened at a date to be determined by the elected council (see order 1(b) above) to:
(i)work through the minutes of the 2019 Annual General Meeting (held on 12 December 2019) to confirm them or otherwise to deal with the agenda items again (apart from the election of the council which is dealt with by order 1(b) above); and
(ii)if necessary, determine if Mr Clay was 'unfinancial' as at 12 December 2019 (before the commencement of the 2019 Annual General Meeting).
(d)Following the election of the council (see order 1(b) above), the second respondent may consider taking action to recover moneys deposited into a bank account(s) opened by the first respondent for the strata company following the 2019 Annual General Meeting (held on 12 December 2019).

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS R PETRUCCI, MEMBER
10 NOVEMBER 2021

'Except in cases where by or under the Act a unanimous resolution or a resolution without dissent is required, no proprietor is entitled to vote at any general meeting unless all contributions payable in respect of his lot have been duly paid and any other moneys recoverable under the Act by the strata company from him at the date of the notice given to proprietors of the meeting have been duly paid before the commencement of the meeting'.