PEEL and WHITE
[2012] WASAT 148
•18 JULY 2012
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: COMMERCIAL & CIVIL
ACT: STRATA TITLES ACT 1985 (WA)
CITATION: PEEL and WHITE [2012] WASAT 148
MEMBER: MS NATASHA OWEN-CONWAY (MEMBER)
HEARD: 9 JULY 2012
DELIVERED : 18 JULY 2012
FILE NO/S: CC 710 of 2012
BETWEEN: GERALDINE PEEL
Applicant
AND
PAUL WHITE
DEBBIE WHITE
Respondents
Catchwords:
Strata lot proprietor - Obligations of strata company - Insurance
Legislation:
Strata Titles Act 1985 (WA), s 53A, s 53B, s 53B(1), s 53B(2), s 53C, s 53E
Result:
Application dismissed
Category: B
Representation:
Counsel:
Applicant: Self-represented
Respondents : Self-represented
Solicitors:
Applicant: N/A
Respondents : N/A
Case(s) referred to in decision(s):
Nil
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
Ms Peel is the owner of one of the lots and units at No 27 Justinian Street, Palmyra. Mr and Mrs White are the joint owners of another lot and unit at that address. There are three lots comprised in the relevant Strata Plan 28708. Each lot has been developed with a unit. Since about 2000, Ms Peel, on behalf of the strata company, has arranged and paid for insurance for the whole of the strata development, including each of the lots, and each lot proprietor has, in the past, reimbursed Ms Peel the proportional cost of that insurance. Ms Peel asserted that Mr and Mrs White did not have a right to insure their unit and lot, and were obliged to contribute to the insurance taken by her on behalf of the strata company in respect of all three units and the common property.
The Tribunal found that there was no evidence of any determination that the strata company was obliged to insure the units and the common property on behalf of the proprietors of the individual lots. As there was no determination in terms of s 53B(2) of the Strata Titles Act 1985 (WA), Mr and Mrs White were free to insure their unit and lot individually, and were not obliged to contribute to the insurance taken by Ms Peel on behalf of the strata company. There was no evidence led concerning the quantification of the cost of the insurance premium taken by Ms Peel on behalf of the strata company attributable to the insurance of the common property. The Tribunal was not able to make any order in respect of the contribution that Mr and Mrs White should make to this portion of the strata company's insurance premium, pursuant to s 53C of the Strata Titles Act 1985 (WA).
The application was dismissed.
Introduction
Ms Peel (applicant) is the proprietor of one of three strata lots situated at No 27 Justinian Street, Palmyra. Mr and Mrs White (respondents) are the proprietors of Unit 2, No 27 Justinian Street, Palmyra. The applicant commenced her application against the respondents on 9 May 2012 wherein she sought an order from the Tribunal that the respondents 'reimburse their proportion of strata insurance in the amount of $519.24'. The applicant asserts in the application that the order sought is to be made pursuant to s 53C of the Strata Titles Act 1985 (WA) (ST Act). The respondents deny any liability to pay any sum, and claim they are entitled to ensure their own lot and unit and the common property without regard to the strata company, and are therefore not obliged to pay the strata company any sum of money or contribute in any way to the insurance premium taken by the applicant on behalf of the strata company.
The issues
In the circumstances of this dispute, are the respondents obliged to contribute towards a policy of insurance arranged by the respondents on behalf of the strata company to insure the buildings situated on the individual lots?
The facts and the evidence
The following facts are agreed between the parties:
1)The respondents purchased Unit 2 in late 2007.
2)The respondents paid a portion of strata company building insurance for the years 2008, 2009, 2010 and 2011.
3)The applicant had arranged for the strata company insurance since about 2000.
4)There was no formal meeting of owners and members of the strata company at any stage, whereby a vote was taken or an agreement was made empowering or obliging the strata company to obtain and pay for the building insurance for all three units and the common property, and for the individual lot proprietors to be obliged to proportionally reimburse the strata company for that cost.
5)In early May 2012, the secondnamed respondent approached the applicant and informed the applicant that the respondents intended to arrange their own building insurance for their lot and unit (Unit 2) from thereon.
6)The applicant, notwithstanding the information received and referred to in subparagraph 5 above, renewed the policy of insurance taken by her on behalf of the strata company which insured all three lots and units and the common property.
7)The only common property was the paved driveway providing access from Justinian Street to each of Units 1, 2 and 3.
The applicant gave evidence that since 2000, she had arranged on behalf of the strata company for the renewal of a building insurance policy which insured Lots 1, 2 and 3 and Units 1, 2 and 3 and common property. She gave evidence that at no time had there ever been any dissent from this process until early May 2012. The applicant initially relied upon a repealed provision of the ST Act. However, she withdrew that submission and relied instead on s 53C of the ST Act to establish that the strata company was obliged to insure all of the buildings and common property, and that the respondents were obliged to contribute and reimburse her on behalf of the strata company for their share. Section 53C of the ST Act refers only to insurance of common property.
Alternatively, the applicant submitted that the strata company had determined at some unspecified time, by way of an unrecorded oral agreement of the then lot proprietors, that the strata company would insure all of the lots and the buildings situated on Units 1, 2 and 3 and the common property. The applicant could not recall this oral agreement but presumed one had been made because of her practice, from 2000, that she personally had arranged the insurance for the whole strata development. The applicant submitted that in the absence of a resolution (without dissent) to vary that determination, the respondents were obliged to contribute to a policy of insurance taken out and paid for by the applicant on behalf of the strata company in respect of all three lots, Units 1, 2 and 3 and the common property, and were not free to arrange insurance of their lot and unit (Unit 2) by themselves.
Further, the applicant asserted that the respondents' insurer was not compliant with the ST Act. The applicant withdrew this submission.
It was not in issue between the parties that the strata was a single tier strata scheme.
Statutory provisions
Section 53A of the ST Act provides:
Application of this Subdivision
References in this Subdivision
(a)to scheme are to a single tier strata scheme;
(b)to strata company are to a strata company for such a scheme; and
(c)to proprietor are to a proprietor of a lot in such a scheme.
Section 53B of the ST Act provides:
(1)For the purposes of this Act
(a)whether there is insurance in respect of
(i)any building on a lot in a scheme; or
(ii)damage to property, death or bodily injury for which the proprietor of a lot in a scheme could become liable in damages;
(b)the occurrences to be insured against by the proprietor in relation to those matters; and
(c)the terms on which any insurance is obtained,
are, subject to this section, at the discretion of the proprietor of the lot.
(2)A strata company for a scheme may determine that it is a function of the company to insure in respect of the matters referred to in subsection (1), and may at any time revoke the determination.
(3)While such a determination is in force the strata company shall comply with section 53D.
Section 53C of the ST Act relevantly provides:
(1)The strata company for a scheme shall
(a)insure and keep insured any building, or part of a building, or improvement on the parcel that is common property; and
(b)effect and maintain insurance in respect of damage to property, death or bodily injury for which the proprietors of lots in the scheme could become liable in damages as holders of the common property.
…
(3)A resolution under subsection (2)(b) remains in force until
(a)it is revoked; or
(b)it ceases to have effect under subsection (4).
(4)A resolution of a strata company under subsection (2)(b) ceases to have effect if a proprietor at any time after the passing of the resolution serves notice in writing
(a)on the strata company; or
(b)in the case of a two-lot scheme, on the other proprietor,
that he requires that subsection (1) apply to the scheme.
Section 53E of the ST Act is concerned with the obligations of the lot proprietors to proportionally reimburse the strata company.
On a proper reading of s 53A, s 53B and s 53C of the ST Act, the Tribunal concludes that, in the case of single tier strata schemes such as the one before the Tribunal in this matter, the proprietors of a lot have the discretion, subject to the provisions of s 53B of the ST Act:
1)to decide whether to insure any building on their lot;
2)to insure in respect of any damage, property, death or bodily injury for which they, as proprietors of their lot in the scheme, could become liable in damages;
3)to determine the type of events or occurrences they wish to insure against; and
4)to determine the terms of their insurance.
Section 53B(2) of the ST Act provides that a strata company for a single tier strata scheme may determine that the function of obtaining and paying for insurance of individual proprietor's lots may be imposed on the strata company. If there is such a determination, the strata company is obliged to keep the property insured and the individual proprietors of the lots are obliged, by reason of s 53E of the ST Act, to contribute their share of the cost of insurance taken out and paid for by the strata company or another person on behalf of the strata company. If there is a determination that the strata company is to insure, and keep insured, the individual lots of the strata scheme, that determination may be revoked at any time (s 53B(2) of the ST Act).
However, where no determination has been made, the individual lot proprietors have the discretion what to insure, for what events, the extent of the damage that they wish to insure against, on what terms and with whom they intend to insure.
Section 53C and s 53E of the ST Act provides that the strata company is obliged to insure the common property in a single tier strata scheme and that the individual lot proprietors are to contribute towards the strata company's cost of that insurance of their common property. Section 53C of the ST Act is not concerned with insurance of individual lots and any buildings thereon.
The findings
The Tribunal has found, on the evidence presented, that:
1)there is no earlier determination made pursuant to s 53B(2) of the ST Act that the strata company is obliged to insure, and keep insured, the individual lots of the strata scheme in question;
2)there being no determination, the respondents were free, and remain free, to insure their lot and unit (Unit 2) pursuant to s 53B(1) of the ST Act;
3)there is no specific amount allocated to the insurance taken by the applicant on behalf of the strata company in respect of the common property; and
4)the respondents gave the applicant sufficient warning to indicate that they did not intend to contribute to the insurance policy arranged by the applicant on behalf of the strata company, as they intended to insure their lot and the building thereon with another insurer, whose terms suited them.
Conclusion
As a consequence of the findings made, the Tribunal concludes that the respondents are not liable to contribute to the strata company's insurance policy premium for 2012 in respect of the insurance taken over the respondents' lot and unit (Unit 2).
Whilst the respondents may be liable to contribute to the strata company's insurance of the common property, as no evidence was led as to whether the strata company's policy of insurance did, in fact, insure the common property and, if so, the quantification of that amount, the Tribunal could not make an assessment of the portion of the insurance cost for which the respondents were liable to the applicant.
On the evidence before the Tribunal, accordingly, the application was dismissed.
Orders
1.The application is dismissed.
I certify that this and the preceding [22] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MS NATASHA OWEN-CONWAY, MEMBER
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