RADFORD and THE OWNERS OF MIAMI APARTMENTS STRATA PLAN 45236 [2006] WASAT 293

Jurisdiction:	STATE ADMINISTRATIVE TRIBUNAL	Citation No:	[2006] WASAT 293
Act:	STRATA TITLES ACT 1985 (WA)
Case No:	CC:446/2006	Heard:	2 AND 8 AUGUST 2006
Coram:	DR B DE VILLIERS (MEMBER)	Delivered:	25/09/06
No of pages:	50	Judgment Part:	1 of 1
Result:	Application dismissed
Category:	B
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Parties:	KEVIN WILLIAM AND CORAL OLIVE RADFORD THE OWNERS OF MIAMI APARTMENTS STRATA PLAN 45236
Catchwords:	Strata title – Resolution without dissent – Re-subdivision of common property – Management and control of common property – Having regard to the interests of all proprietors – Repeal of by-law – Non-compliance with Strata Titles Act 1985 in conduct of an AGM – Do future proprietors have standing to challenge the validity of a by-law enacted prior to them becoming a proprietor? – Must the interests of future proprietors be taken into account at an AGM where by-laws are enacted by means of resolution without dissent – Implications of registration of a by-law
Legislation:	State Administrative Tribunal Act 2004 (WA), s 87(1) Strata Schemes Management Act 1996 (NSW), s 157 Strata Titles Act 1985 (WA), s 3(1), s 3AC, s 3AC(1)(a), s 5C, s 8A, s 8A(ii)(II), s 14(2), s 14(3), s 25(3)(c), s 35, s 35(1), s 35(1)(b), s 35(1)(c), s 42, s 42(1)(b), s 42(2)(b), s 42(8), s 42(1)(b)(iii), s 42(3), s 49(3), s 69, s 69A, s 69A(d), s 69B, s 69B(1)(a), s 69B(1)(b), s 69B(2)(f), s 69D, s 69D(1), s 70B, s 79(2), s 81(4), s 81(7), s 82, s 83(1), s 83(2), s 83(4), s 93, s 93(1), s 93(2), s 93(2)(a), s 93(2)(b), s 93(3), s 93(3)(a), s 93(3)(c), s 93(5), s 94, s 97, s 97(1), s 97(1)(a), s 97(2), s 97(2)(a), s 99A, s 115(3), Sch 1, Sch 2, Sch 2A, Sch 7 Strata Titles General Regulations (WA), 1996, reg 37(1)(a)
Case References:	Houghton & Anor v Immer (No 155) Pty Ltd (Supreme Court of New South Wales) Matter No CA 40764/96 2378/96 Re Bundy and Secretary, Department of Housing and Construction (2 ALD 735, 1980) Re R.J.D Hunt; Exparte Sean Investments Pty Ltd High Court 1979 53 ALJR 552 The Queen v Toohey, Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327 White v Betalli & Anor 2006 NSWSC 537 Nil
Orders	1. The application for order 1 is dismissed.,2. The application for amended order 1A is dismissed.,3. The application for amended order 1B is dismissed.,4. The application for order 2 is dismissed.,5. The application for order 3 is dismissed.,6. The application for order 4 succeeds in part:,(a) The respondent must within 30 days from the date of these orders provide to the applicants access for inspection to all information in regard to the building licence for the roof-area works pursuant to s 43(1)(b)(iii) of the Strata Titles Act 1985;,(b) The application for an order that part of the roof-area structures where erected without written consent of the strata company, is dismissed.,7. There is liberty to apply for costs within 30 days from the date of these orders. The attention of parties is drawn to s 81(7) of the Strata Titles Act 1985 and s 87(1) of the State Administrative Tribunal Act 2004 (WA) in this regard.

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : STRATA TITLES ACT 1985 (WA) CITATION : RADFORD and THE OWNERS OF MIAMI APARTMENTS STRATA PLAN 45236 [2006] WASAT 293 MEMBER : DR B DE VILLIERS (MEMBER) HEARD : 2 AND 8 AUGUST 2006 DELIVERED : 25 SEPTEMBER 2006 FILE NO/S : CC 446 of 2006 BETWEEN : KEVIN WILLIAM AND CORAL OLIVE RADFORD

Applicants

AND

THE OWNERS OF MIAMI APARTMENTS STRATA PLAN 45236

Respondent

Catchwords:

Strata title – Resolution without dissent – Re-subdivision of common property – Management and control of common property – Having regard to the interests of all proprietors – Repeal of by-law – Non-compliance with Strata Titles Act 1985 in conduct of an AGM – Do future proprietors have standing to challenge the validity of a by-law enacted prior to them becoming a proprietor? – Must the interests of future proprietors be taken into account at an AGM where by-laws are enacted by means of resolution without dissent – Implications of registration of a by-law

(Page 2)

Legislation:

State Administrative Tribunal Act 2004 (WA), s 87(1)

Strata Schemes Management Act 1996 (NSW), s 157
Strata Titles Act 1985 (WA), s 3(1), s 3AC, s 3AC(1)(a), s 5C, s 8A, s 8A(ii)(II), s 14(2), s 14(3), s 25(3)(c), s 35, s 35(1), s 35(1)(b), s 35(1)(c), s 42, s 42(1)(b), s 42(2)(b), s 42(8), s 42(1)(b)(iii), s 42(3), s 49(3), s 69, s 69A, s 69A(d), s 69B, s 69B(1)(a), s 69B(1)(b), s 69B(2)(f), s 69D, s 69D(1), s 70B, s 79(2), s 81(4), s 81(7), s 82, s 83(1), s 83(2), s 83(4), s 93, s 93(1), s 93(2), s 93(2)(a), s 93(2)(b), s 93(3), s 93(3)(a), s 93(3)(c), s 93(5), s 94, s 97, s 97(1), s 97(1)(a), s 97(2), s 97(2)(a), s 99A, s 115(3), Sch 1, Sch 2, Sch 2A, Sch 7
Strata Titles General Regulations (WA), 1996, reg 37(1)(a)

Result:

Application dismissed

Category: B

Representation:

Counsel:

Applicants : Mr R Kronberger

Respondent : Mr JF Park

Solicitors:

Applicants : Atkinson and Associates

Respondent : Park Legal Solutions

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

Houghton & Anor v Immer (No 155) Pty Ltd (Supreme Court of New South Wales) Matter No CA 40764/96 2378/96
Re Bundy and Secretary, Department of Housing and Construction (2 ALD 735, 1980)
Re R.J.D Hunt; Exparte Sean Investments Pty Ltd High Court 1979 53 ALJR 552
The Queen v Toohey, Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327
White v Betalli & Anor 2006 NSWSC 537

(Page 3)

Case(s) also cited:

Nil

(Page 4)

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

1 The applicants are the proprietors of Lot 2 in a five lot residential strata-title scheme entitled 'Miami Apartments'. They purchased the lot off the plan in 2002 prior to registration of the strata plan. In the contract for sale, the roof area of the development was described as "common property". The applicants agreed in the contract for sale that the proprietors of Lots 4 and 5 would have exclusive use of the roof area.

2 The strata plan was registered on 22 October 2004. On the day of registration, titles to Lots 1 - 3 were issued to Bellevue Apartments Pty Ltd, title to Lot 4 was issued to RA Smith and title to Lot 5 to RD Day.

3 The first Annual General Meeting of the strata company was held on 8 November 2004. At the Annual General Meeting, the then proprietors voted unanimously to amend the standard Schedule 1 by-laws to the effect that the roof area common property could be re-subdivided and that the proprietors of Lots 4 and 5 would become the owners of the re-subdivided lots for no consideration payable to the other proprietors.

4 The amendments to the Sch 1 by-laws were registered on the strata plan on 23 November 2004 per instrument Notification J94143.

5 Settlement of Lot 2 in the name of the applicants was effected on 3 December 2004.

6 After the applicants became aware in February 2005 of the amendments to the by-laws, they lodged an application with the State Administrative Tribunal to have the amendments repealed.

7 The applicants sought relief pursuant s 83(1), s 93(2) and s 97 (1) of the Strata Titles Act 1985 (WA).

8 They contended that s 83(1) of the Strata Titles Act 1985 empowers the Tribunal to rectify a complaint and to order the strata company to withdraw the by-laws; s 93(2) of the Strata Titles Act 1985 empowers the Tribunal to repeal a by-law if it is satisfied that the by-law should not have been made having regard for the interests of all owners, and s 97(1) of the Strata Titles Act 1985 allows for the repeal of a by-law if a provision in the Strata Titles Act 1985 was not complied with in the process of enacting the by-law. The applicants also sought other orders in regard to the use of common property parking bays and lifts.

(Page 5)

9 The respondent contended that the applicants did not have standing to bring the application since they became proprietors after the amendments to the by-laws had been registered. If, however, the Tribunal found that the applicants had standing, the respondent contended that s 83(1) of the Strata Titles Act 1985 does not apply since the by-laws were enacted by a resolution without dissent and therefore s 83(4) of the Strata Titles Act 1985 disqualifies an application under this section; s 93(2) of the Strata Titles Act 1985 is not available since the evidence shows that at the time of the decision of the Annual General Meeting, the interests of all proprietors were taken into account; and s 97(1) of the Strata Titles Act 1985 does not apply since no provision of the Strata Titles Act 1985 had been breached when the decision was made.

10 The Tribunal found as follows:

(a) The applicants have standing to bring the application even though they were not proprietors when the decision was made. The

Strata Titles Act 1985

allows for an invalid by-law to be repealed, and there is no reason why only proprietors who were entitled to vote at the meeting should be afforded the right to seek the repeal of an otherwise invalid by-law. A person who only became a proprietor after the enactment of a by-law, can therefore bring an application pursuant to s 83(1), s 93(1) or s 97(1) of the

Strata Titles Act 1985

to have a by-law repealed.

(b) The amendments to the by-laws cannot be repealed pursuant to s 83(1) due to working of s 83(4). The bylaws were enacted by resolution without dissent pursuant to s 42(2)(b) and s 42(8) of the Strata Titles Act 1985 respectively. The conflict-resolution power of the Tribunal under s 83(1) of the Strata Titles Act 1985 is therefore not available.

(c) The amendments to the by-laws cannot be repealed pursuant to s 93(3) of the Strata Titles Act 1985 since all the proprietors at the time of the Annual General Meeting were informed about the proposed by-laws, they had opportunity to discuss it, they supported the proposal, and there was no objection lodged against the decision after the Annual General Meeting. The Tribunal is therefore satisfied that regard was had to the interests of all proprietors before the decision was made.

(Page 6)

It would be impractical and unreasonable to expect an Annual General Meeting to have regard to the interests of all future proprietors. The apparent inconsistency between the draft by-laws enclosed to the contract for sale, the power of attorney held by Bellevue Apartments Pty Ltd and the actual by-laws enacted at the first Annual General Meeting with the approval of Bellevue Apartments Pty Ltd, may give rise to a claim for breach of contract by Bellevue Apartments Pty Ltd or equitable relief, but neither falls within the jurisdiction of the Tribunal.

(d) The by-laws cannot be repealed pursuant to s 97(1) of the

Strata Titles Act 1985

since the Tribunal does not consider that a provision of the

Strata Titles Act 1985

was breached in the conduct of the Annual General Meeting.

(e) In regard to the alleged unauthorised structures on the roof, there is insufficient evidence to support the contention by the applicants. The applicants are, however, entitled to a copy of the building licence for the roof structures.

(f) In regard to the use of the lifts and installation of a roller door, there is insufficient evidence to support the applicants' contention.

Issues arising from the application

11 The main issue giving rise to the application is if amendments to standard Sch 1 by-laws that were enacted pursuant to s 42 of the Strata Titles Act 1985 (ST Act) can be repealed by order of the Tribunal. The amendments were approved by resolution without dissent on 8 November 2004 at the first Annual General Meeting (AGM) of the strata company and registered by the Registrar of Titles on 23 November 2004 per instrument Notification J94143 (by-laws). The by-laws in contention are By-law 25(1) (exclusive use of parking) and Bylaws 26 and 27 (proposed re-subdivision of common property).

12 The main issue can be divided into the following several sub-issues:

1) Do Kevin William Radford and Coral Olive Radford (applicants), who acquired Lot 2 after the registration of the by-laws, have standing pursuant to s 83, s 93 or s 97

(Page 7)

of the ST Act to bring the application? If the answer to question 1 is in the affirmative, issues 2 - 4 must be dealt with.

2) Can the Tribunal make orders to settle the dispute pursuant to s 83(1) of the ST Act?

3) Can the by-laws be declared invalid and repealed pursuant to s 93(3)(c) of the ST Act on grounds that it should not have been made having regards to the interests of all proprietors in the use and enjoyment of their lots or the common property?

4) Can the resolution that authorised the by-laws be invalidated pursuant to s 97(1) of the ST Act on grounds that provisions of the ST Act had allegedly not been complied with in relation to the AGM?

5) Were the alterations brought about to the roof area of the common property unauthorised and therefore in breach of Sch 1 By-law 25(3)(c) which requires written consent of the strata company?

6) Can orders be made pursuant to s 83(1) of the ST Act in regard to the use of other common property facilities such as lifts and the installation of a roller door?

Outline of reasons

13 The submissions and evidence will, for convenience, be considered on the basis of the following headings:

1. Summary of the facts.

2. Orders sought by the applicants.

3. Excerpts from the contract for sale and by-laws.

4. Sub-issues:

4.1 Standing and alleged breaches of s 83(1), s 93(3)(c) and s 97(1) of the ST Act;

4.2 Alleged unauthorised structures on roof area;

(Page 8)

4.3 Other issues regarding the use of common property;

4.4 Summary of findings;

5. Orders.

1. Summary of facts

14 The facts giving rise to the application can be summarised as follows:

15 The applicants are the proprietors of Lot 2 in a five lot residential strata-title scheme entitled "Miami Apartments" on strata plan 45336 situated at No 2 Bellevue Terrace, West Perth. The land which comprises the strata plan was the whole of the land in Certificate of Title Volume 1258 Folio 530.

16 The applicants purchased the lot "off the plan" on 9 July 2002 prior to the registration of the strata plan.

17 The vendor, according to the contract for sale, was Bellevue Apartments Pty Ltd and Miami Gold Pty Ltd (vendor). It is acknowledged by the parties that Miami Gold Pty Ltd was not at any time a registered proprietor and had no interest in the original title. Miami Gold Pty Ltd was the holder of all shares in Bellevue Apartments Pty Ltd. (The parties agreed that the inaccuracy in the contract for sale has no bearing on the application.)

18 On 31 October 2002, the original title to the land was transferred by Bellevue Apartments Pty Ltd into the names of the following tenants in common: Bellevue Apartments Pty Ltd, Malcolm Raymond Day and Rodney Alan Smith. They were collectively, pursuant to s 3(1) of the ST Act, the original proprietors of the scheme (original proprietor).

19 At the time when the contract for sale was entered into, the strata scheme had not been registered as was acknowledged in cl 3 of the contract for sale. The contract for sale did not contain a disclosure statement but it contained Special Conditions of Sale (Special Conditions).

20 In the Special Conditions were included the standard Sch 1 and Sch 2 by-laws (Annexure 4) set out in the ST Act with proposals to have it amended, repealed and added to by draft by-laws (Annexure 7). The relevant parts of the Special Conditions are quoted under heading 3

(Page 9)

of these reasons. The applicants consented to the draft by-laws, as contained in Annexure 7 to the Special Conditions, being adopted by the strata company (cl 14.3 Special Conditions).

21 The applicants appointed the vendor as power of attorney to do several things including to convene and vote at the first AGM, execute documents, consent to passing of by-laws, and propose and vote for bylaws (cl 14.2(i) - (v) Special Conditions). The power of attorney was to have effect "up to and including the date of registration of the Strata Plan in its final form or the Settlement date whichever shall last occur" (cl 14 Special Conditions). The power of attorney is quoted under heading 3 of these reasons.

22 The strata plan was registered on 22 October 2004. On the same day titles to lots were issued to the original proprietors. Titles to Lots 1 - 3 were issued to Bellevue Apartments Pty Ltd, title to Lot 4 was issued to RA Smith and title to Lot 5 to RD Day. The original proprietors were the same persons as the owners of the land and the developers of the scheme.

23 The first AGM of the strata company was held on 8 November 2004. Mr David Bertram, project manager who oversaw the development, represented the proprietor of Lots 1 - 3 at the AGM and held a general proxy to vote on its behalf. Mr Bertram also held a proxy for the respective proprietors of Lot 4 and Lot 5.

24 The AGM was chaired by the to-be-appointed strata manager, Ms E Loguidice.

25 Ms Loguidice explained in evidence that she did all the preparatory work for the AGM in anticipation that her company would be appointed as strata manager. She prepared and circulated the agenda and attachments, including proposed alterations to the standard by-laws, to the proprietors.

26 Ms Loguidice chaired the AGM. She was also responsible for drawing up minutes of the AGM and to send it to the proprietors as well as to persons who became proprietors after the AGM.

27 The amendments to the standard Schedule 1 by-laws were approved by resolution without dissent by the AGM. This decision was recorded in items 15 and 16 of the minutes of the AGM.

28 The amendments to the by-laws were registered on the strata plan on 23 November 2004 per instrument Notification J94143.

(Page 10)

29 Settlement of Lot 2 in the name of the applicants was effected on 3 December 2004. Lot 3 was transferred to Mr and Mrs Daryanani on 22 November 2004 and Lot 1 was transferred to Fiona Elizabeth Foreman on 23 November 2004.

30 According to the applicants, they became aware in February 2005 that the amendments made to the standard Schedule 1 by-laws, were inconsistent with the draft by-laws that were enclosed to their contract for sale. They were aggrieved that they had not been consulted about the changes to the draft by-laws to which they had agreed in the contract for sale. The applicants did not give evidence to explain why their legal representatives did not draw their attention to the registered by-laws prior to settlement.

31 Ms Loguidice explained in evidence that she had circulated the proposed amendments to the standard Schedule 1 by-laws provided to her by Mr Bertram, to the registered proprietors and that she had not been aware that the proposed amendments differed in some material respects from the draft by-laws enclosed with the contract for sale of the applicants. She insisted however that she had no interest in the terms of any contract for sale since she only dealt with the registered proprietors and the general proxy held by Mr Bertram to act on their behalf.

32 The amendments that most concerned the applicants were the by-law dealing with parking on common property (new Sch 1 By-law 25(1)) and the by-laws authorising the re-subdivision of common property (new Sch 1 By-laws 26 and 27). The essence of their concern can be summarised as follows:

• Firstly, draft By-law 24 of the Special Conditions provided that the basement parking bays would be available as visitors' parking bays for all lot owners. Bylaw 25(1) provides that although the basement car bays remain common property, the proprietors of Lots 4 and 5 have exclusive use of it. The applicants are therefore aggrieved that they (and their visitors) have been deprived of the use of the common property basement parking bays.

• Secondly, draft By-law 27 of the Special Conditions provided that although the roof deck and terrace were common property, the proprietors of Lots 4 and 5 would have had exclusive use thereof and would have been

(Page 11)

responsible for all costs arising from the repair and maintenance thereof. By-law 25(2) to (5) is consistent with the contract for sale but two additional by-laws (26 and 27) were added without the consent of the applicants. By-laws 26 and 27 provide that the proprietors of Lots 4 and 5 are entitled to exchange occupancy rights of the roof deck and terrace common property for ownership of the area, for no consideration payable to the other proprietors. To give effect to the change from common property to ownership, a resubdivision would occur to create new lots in accordance with s 8A of the ST Act and in particular s 8A(ii)(II) of the ST Act. The applicants are therefore aggrieved that By-laws 26 and 27, when implemented, will deprive them of their undivided share in common property without them being consulted or compensated for the loss. The creation of new lots will also impact on lot entitlement of the respective lots and will diminish the voting power of the applicants in the overall scheme.

33 The applicants initially lodged an application pursuant to s 83(1) of the ST Act, seeking orders for the amended by-laws to be cancelled and withdrawn. The respondents opposed the application. The applicants also sought interim orders but after the respondent gave certain undertakings, the applicants sought leave to withdraw the application for interim orders. At the directions hearing held on 25 May 2006, the applicants sought leave to amend the original application. On 25 May 2006, leave was granted for the interim application to be withdrawn and for the main application to be amended.

34 The Tribunal ordered, at the directions hearing held on 25 May 2006, that a copy of the application and supportive documents must be provided to the persons referred to in s 79(2) of the ST Act and for such persons to make submissions to the Tribunal if they chose to do so. No submissions were received from persons other than the parties to the application.

2. Orders sought

35 The following orders were sought by the applicants:

1. The respondent immediately apply to the Registrar of Titles and do all things and pay all fees necessary to cancel and withdraw from registration

(Page 12)

Notification J94143 which was recorded on Strata Plan 45236 on 24 November 2004.

1A. If requested order 1 is not granted, then the Tribunal:

invalidates, pursuant to s 97 of the ST Act the resolution, voted on at the first AGM of the strata company, held on 8 November 2004, which recorded the adoption of the by-laws recorded on Strata Plan 45235 in Notification J94143.

1B. If requested order 1 is not granted, then the Tribunal:

declares, pursuant to s 93(2)(a) of the ST Act that, to the extent that the by-laws comprised in Notification J94143 do not constitute by-laws made or deemed to be made under s 93(2)(b) of the ST Act, they be repealed.

2. The respondent remove or otherwise leave open at all times the roller door which has been installed across the driveway access between the upper and lower basement levels of the building comprised in Strata Plan 45236.

3. The respondent ensure that the applicants are able at all times to travel to and from the lower basement common property areas by way of one or both common property lifts to the lower basement level of the building comprised in Strata Plan 45236.

4. The respondent provide to the applicants full details, dimensions and purposes development approvals and building licences in respect of all structural works and all fixtures and fittings installed on the common property roof deck of the building comprised in Strata Plan 45236.

3. Excerpts from the contract for sale and registered by-laws

36 Below are the relevant excerpts from the contract for sale (including the power of attorney) and the By-laws 25, 26 and 27 as registered.

(Page 13)

3(a) Special Conditions from Contract for Sale: power of attorney

37 For purposes of convenience and reference the relevant parts of the Special Conditions of Sale as enclosed in the contract for sale are quoted in full below:

14. STRATA COMPANY MEETINGS

14.1 The by-laws will be the Schedule 1 and Schedule 2 bylaws contained in the

Strata Titles Act

and set out in Annexure 4, as amended repealed and added to in the manner set out in Annexure 7.

14.2 Without affecting the Purchaser's rights under the Strata Titles Act and except to the extent that the Act may override any provision of this clause, regardless of any agreement between the Parties of the contrary, the Purchaser irrevocably:

(a) Appoints the Vendor and each officer of the Vendor, as defined by the Corporations Law, jointly and severally for a period from the date of this Contract up to and including the date of registration of the Strata Plan in its final form or the Settlement Date whichever shall last occur to be the true and lawful attorney and proxy of the Purchaser, in the name and for and on behalf of the Purchaser;

(i) to convene, attend and vote at the first annual general meeting of the Strata Company, even to the exclusion of the Purchaser if present at the meeting, for the purposes of dealing with any matter arising at such meeting in accordance with the provisions of this contract, including but not limited to any matters required by the Vendor to enable the Vendor to proceed with and complete the development;

(Page 14)

(ii) to do all such things and execute all such documents as may be necessary to give effect to any resolution passed at such meeting or any matter required by this contract;

(iii) to consent to the passing of any bylaw conferring on the proprietor of the Property the exclusive use or enjoyment of, or special privileges in respect of, any part of the common property and grant any easement; and

(iv) to propose and vote for any by-law whether by way of repeal, substitution or variation of the bylaws; and

(v) to execute on behalf of the Purchaser all documents whatsoever including but not limited to any contract, transfer, application, form, certificate or withdrawal of Caveat necessary or desirable to enable the registration of the Strata Plan

(b) agrees to ratify and confirm all that such attorney and proxy does pursuant to this clause;

(c) agrees to ensure that any third party that may acquire an interest in the Property will be bound by the terms of Special Condition 14 and if required by the Vendor will enter into a deed or other documents to be prepared by the Vendor's solicitors at the cost of the Vendor in favour of the Purchaser to give effect to this.

(Page 15)

14.3 The Purchaser unconditionally:

(a) approves the By-Laws; and

(b) consents to the Strata Company adopting the By-laws.

14.4 The Purchaser unconditionally and irrevocably consents to the appointment by the Strata Company of Gow Real Estate or such other person or company in the Vendor's discretion may see fit as the manager of the Strata Company, substantially in accordance with the terms of the Management Agreement or such other reasonable terms and conditions as the Vendor may see fit and, if requested in writing by the Vendor, must vote for and ratify any resolution of the Strata Company with respect to that appointment.

…

35. PURCHASER'S ACKNOWLEDGEMENT

35.1 Subject to the provisions of clauses 7.1 and 7.2 hereof, the Purchaser acknowledges and makes no objection that the title of the Land and/or the proposed Lot/s may be affected or amended by any on[e] or more of the following:

35.1.1 variation of the proposed boundaries between the Lots and between Lots and common property other than the Lot hereby sold including those resulting from relocation of the external walls of the proposed improvements.

35.1.2 alteration to the Lot numbers including car space numbers and position of car spaces.

35.1.3 the granting of rights of exclusive occupancy in respect of any part of the Common Property.

35.2 If the Strata Plan as registered is affected or amended only as contemplated in this Special

(Page 16)

Condition then the Strata Plan will be deemed to be substantially in the form set out in Annexure 5 to this contract.

35.3 The Purchaser acknowledges that other than as contained in this Contract[,] no representations, inducements or warranties have been made by the Vendor or its agent or representatives in relation to the Development and if they have that they are hereby negatives and that any measurements which appear in the plans attached to the Plan and Specification are approximate and indicative only."

3(b) Proposed amendments to standard by-laws as enclosed as Special Conditions of Sale

38 For purposes of convenience and easy reference, the relevant parts of the amended by-laws that formed part of the Special Conditions of Sale as Sch 7 as enclosed in the contract for sale are quoted in full below:

24. BASEMENT VISITORS['] VEHICLE PARKING BAYS

(1) The cleaning and maintenance contractors employed by the strata company or the managing agent shall be -

(a) issued with a security keycard that permits access to the parcel during normal business hours;

(b) permitted to use the visitors['] car parking bay when on the parcel.

(2) At all other times the visitor's [

sic

] car parking bays shall be available for the use of visitors to the lots for car parking.

25. EXCLUSIVE USE OF A LIFT FOR LOTS 4 AND 5

(1) The proprietors of lots 4 and 5 shall have exclusive use of the lift compartment and the machinery that operates the lift that is located in the

Eastern

section of the lift well.

(Page 17)

(2) The proprietors of lots 4 and 5 shall be issued with security keycards. Only the holders of these security keycards will be permitted access to this lift.

(3) The proprietors of lots 4 and 5 shall not be permitted to modify the internal or external appearance of the lift compartment without the written consent of the strata council.

(4) All maintenance, repair, replacement and upkeep of the lift compartment, machinery and the security system shall be included as part of the strata company expenditure.

26. EXCLUSIVE USE OF A LIFT FOR LOTS 1, 2 AND 3

(1) The proprietors of lots 1, 2 and 3 shall have exclusive use of the lift compartment and machinery that operates the lift that is located in the

Western

section of the lift well.

(2) The proprietors of lots 1, 2 and 3 shall be issued with security key cards [sic]. Only the holders of these security keycards will be permitted access to this lift.

(3) The proprietors of lots 1, 2 and 3 shall not be permitted to modify the internal or external appearance of the lift compartment without the written consent of the strata council.

(4) All maintenance, repair, replacement and upkeep of the lift compartment, machinery and the security system shall be included as part of the strata company expenditure.

27. EXCLUSIVE USE OF THE ROOF DECK AND TERRACE FOR LOTS 4 AND 5

(1) The proprietors of lots 4 and 5 shall have exclusive use of the common property that forms the roof deck and terrace that is located on the top

(Page 18)

level of the building as delineated on Annexure "10". Security keycards issued to the proprietors of lots 4 and 5 restrict access to this area.

(2) The proprietors of lots 4 and 5 shall

(a) keep this area clean neat and tidy and shall make arrangements between themselves as to the hours of use;

(b) be equally liable for all costs associated with the repair, maintenance and upkeep of the spa, landscaping, water features, entertainment area, kitchen barbeque and ablutions;

(3) Notwithstanding subclause 27(1) above[,] the Strata Company and the proprietors of Lots 1, 2 and 3 shall have the right of access to the roof deck for the purpose of servicing the lifts, air conditioning and other fixtures, fittings, plant and equipment located on the roof deck.

(4) The exclusive use referred to in sub-clause 27(1) above and obligations set out in sub-clause 27(2) above shall apply with respect to Lot 4 only whilst the original proprietor of Lot 4 remains the proprietor and upon the original proprietor transferring Lot 4 the said exclusive use and obligations shall apply with respect to Lot 5 only.

3(c) Registered amendments to the standard Schedule 1 by-laws as approved by AGM

39 For purposes of convenience and easy reference, the relevant parts of the by-laws as registered and the subject of these proceedings are quoted in full below:

23. VEHICLE PARKING BAYS WITHIN A PART OF A LOT

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(1) A proprietor, occupier or tenant is permitted to park a passenger motorcar, four wheel drive passenger vehicles or motor cycles, in their garage. No other type of vehicle is permitted to be parked within this area.

(2) A proprietor, occupier or tenant shall not use their garage for any other purpose other than for vehicle parking.

24. EXCLUSIVE USE OF A LIFT FOR LOTS 4 AND 5

(1) The proprietors of lots 4 and 5 shall have exclusive use of the lift compartment and the machinery that operates the lift that is located in the eastern section of the lift well.

(2) The proprietors of lots 4 and 5 shall be issued with Security Keys. Except in the case of emergencies or breakdowns, only the holders of these Security Keys will be permitted access to this lift.

(3) The proprietors of lots 4 and 5 shall not be permitted to modify the internal or external appearance of the lift compartment without the written consent of the strata council.

(4) All maintenance, repair, replacement and upkeep of the lift compartment, machinery and the security system shall be included as part of the strata company expenditure.

(5) The occupiers of lots 1, 2 and 3 shall, in the case of a breakdown of the lift located in the western part of the lift well or in the case of an emergency, be permitted to use this lift.

25. EXCLUSIVE USE OF THE ROOF DECK, TERRACE AND CAR BAYS FOR LOTS 4 AND 5

(1) The proprietors of lots 4 and 5 shall, for no consideration, have exclusive use of part of the common property including the car bays and the

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part of the common property that forms the roof deck and terrace that is located on the top level of the building as delineated and hachured on Annexure 'A', as 'Area for Exclusive Use of Lots 4 and 5', but only for such parts of that area (Area for Exclusive Use of Lots 4 and 5) while those parts are common property on the strata plan or in any registered strata plan of resubdivision under by-laws 26 and 27.

(2) Security Keys that are issued to the proprietors of lots 4 and 5 prevent access to the exclusive use areas by the proprietors of lots 1 to 3.

(3) The proprietors of lots 4 and 5 shall -

(a) keep this area clean, neat and tidy and shall make arrangements between themselves as to the hours of use;

(b) be equally liable for all costs associated with the repair, maintenance and upkeep of the spa, landscaping, water features, entertainment area, kitchen barbecue and ablutions;

(4) Notwithstanding sub-clause 25(1) above the strata company and the proprietors of lots 1, 2 and 3 shall have the right of access to the roof deck for the purpose of servicing the lifts, air conditioning and other fixtures, fittings, plant and equipment located on the roof deck.

(5) The exclusive use referred to in sub-clause 25(1) above and obligations set out in sub-clause 25(3) above shall apply with respect to lot 4 only, whilst the original proprietor of lot 4 remains the proprietor and upon the original proprietor transferring lot 4, the said exclusive use and obligations shall apply with respect to lot 5 only.

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26. PROPOSED RE-SUBDIVISION OF LOTS 4, 5 AND PART OF THE COMMON PROPERTY

(1) Whilst the proprietors of lots 4 and 5 are the original proprietors (in which case clause 27 does not apply) the proprietors of lots 4 and 5 shall have the right to exchange occupancy rights for ownership of the parts of the common property specified in schedule 1 by-law 25. The proprietors of lots 4 and 5 shall be permitted to have ownership of those parts of the common property comprising the strata plan of resubdivision for no consideration to the strata company, the other proprietors, or each other.

(2) At the discretion of the proprietors of lots 4 and 5[,] a strata plan of re-subdivision of lots 4 and 5 and part of the common property to create lots 6, 7 and 8 shall be prepared and registered in accordance with section 8A and in particular section 8A(a)(ii)(II) of the Strata Titles Act. The indicative form and content of the proposed strata plan of re-subdivision and the proposed schedule of unit entitlement is set out in the Annexures hereto;

'B' Proposed strata plan for the resubdivision of lots 4 and 5 and part of the common property;

'C' Licensed valuers certificate form 27 and the proposed unit entitlements for the strata plan of re-subdivision;

'D' Proposed architectural plans

Warning

The proposed re-subdivision in this by-law is not binding on the Western Australian Planning Commission, Local Government, or any other public or statutory authority. Any of these authorities may not approve, or may require changes before approving, the proposed resubdivision.

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27. PROPOSED RE-SUBDIVISION OF LOT 5 AND PART OF THE COMMON PROPERTY

(1) In the event that the proprietor of lot 4 is no longer an original proprietor then the following shall apply.

(2) The proprietor of lot 5 shall have the right to exchange occupancy rights for ownership of the parts of the common property specified in Schedule 1 by-law 25. The proprietor of lot 5 shall be permitted to have ownership of those parts of the common property comprising of the strata plan of re-subdivision shown in Annexure 'E', for no consideration to the strata company, the other proprietors, or each other.

(3) At the discretion of the proprietor of lot 5, a strata plan of re-subdivision of lot 5 and part of the common property to create lots 6 and 7 shall be prepared and registered in accordance with section 8A and in particular section 8A(a)(ii)(II) of the Strata Titles Act. The indicative form and content of the proposed strata plan of resubdivision and the proposed schedule of unit entitlement is set out in the Annexures hereto:

'E' Proposed strata plan for the resubdivision of lot 5 and part of the common property;

'F' Licensed valuers certificate form 27 and the proposed unit entitlements for the strata plan of re-subdivision;

'G' Proposed architectural plans

Warning

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changes before approving, the proposed resubdivision."

4. Sub-Issues arising from the application

40 The respective sub-issues will be addressed below.

4.1 Do the applicants have standing to bring the application pursuant to s 83, s 93 or s 97 of the ST Act and if so, is any relief available to them pursuant to those sections?

41 The Tribunal will first deal with the submissions regarding standing of the applicants to bring the application and thereafter with possible relief available to them.

4.1.1 Standing of the applicants to bring the application

42 The contentions made by the applicants and respondent can be summarised as follows:

43 Mr Kronberger, on behalf of the applicants, contended that the ST Act applies not only to persons who were proprietors at the time of the AGM, but also to other categories of persons who had an interest in the lot at the time of the AGM.

44 He referred, as an example, to s 69 to s 70B of the ST Act that deal with the protection of purchasers. He also referred to s 83, s 93 or s 97 of the ST Act as examples where the rights of persons who are not proprietors are protected.

45 Sections 69 to 69C determine the type of information that must be given to a purchaser - so-called "notifiable information". The vendor and the original proprietor are under an obligation to make available notifiable information to a purchaser. The notifiable information that must be made available by each vendor includes the by-laws that are in force in a scheme, and by-laws "resolved to be made but not yet in force" (s 69A(d) of the ST Act). Notifiable information that must be made available to a purchaser by the original proprietor includes detail of right of exclusive use and enjoyment or special privilege granted or proposed to be granted in relation to common property (s 69B(2)(f) of the ST Act).

46 Mr Kronberger contended that the original proprietor was under an obligation to notify the applicants of the proposed new by-laws before the AGM and prior to settlement. The vendor was under a similar obligation. If the ST Act does not protect purchasers in the way proposed by

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Mr Kronberger, he contended that developers would have "

carte blanche

to do anything they wished … ".

47 Mr Kronberger contended that the contract for sale did not contain a disclosure statement as provided for in s 5C of the ST Act in which the by-laws the subject of the proceedings were set out. He conceded, however, that Sch 7 to the contract for sale contained additional draft bylaws dealing with exclusive use, but even those did not confer the rights of exclusive use of the car parking bays and the transfer of common property as provided for in the registered by-laws.

48 Mr Kronberger contended that due to the statutory requirements placed on a vendor and original proprietor to provide notifiable information to a purchaser, the vendor cannot "evade" the ST Act after a contract for sale is concluded. It would be a violation of the letter and spirit of the ST Act and a breach of the power of attorney if the vendor were allowed to change draft by-laws in such a drastic way without consulting or notifying the applicants.

49 Mr Kronberger referred to the evidence of Mr Bertram who had told the Tribunal that it was an "oversight" on the part of the vendor that the by-laws as registered had not been enclosed in the contract for sale. Mr Bertram confirmed that the applicants had not been informed about the "oversight" nor that by-laws, which were materially different in some respects from the draft by-laws contained in the contract for sale, had been approved by the proprietors at the first AGM. Mr Kronberger contended that the applicants, as purchasers, did not approve of the by-laws as is required pursuant to s 42(8) of the ST Act. Mr Kronberger acknowledged that by registration, the by-laws became public knowledge, but he contended that although the applicants became aware of the by-laws only after settlement, they can nevertheless challenge the by-laws on grounds found in s 83, s 93 and s 97 of the ST Act.

50 Mr Kronberger further contended that the vendor did not have the power to appoint Mr Bertram as proxy to vote at the first AGM. The terms of the contract for sale provide that "(t)he purchaser appoints the vendor to be the attorney and proxy of the purchasers" (cl 14.2). The vendor therefore acted outside the power of appointment by authorising Mr Bertram to vote on the by-laws. Mr Kronberger concluded that the applicants firstly did not give any authority to the vendor to vote for the by-laws and secondly, they did not give the vendor the power to further appoint Mr Bertram or any other person as proxy.

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51 Mr Kronberger emphasised that registration of a by-law does not validate an otherwise invalid resolution and that the ST Act contains several provisions that enable the Tribunal to make orders to nullify or revoke by-laws that had been registered (s 115(3) of the ST Act).

52 Mr Kronberger rejected the contention that the applicants could have withdrawn from the contract for sale prior to settlement after the by-laws had been registered. The applicants only became aware of the amended by-laws in February 2005 – two months after settlement. At that stage, they could not withdraw from the contract for sale. The only option for them was to bring an application for orders as sought.

53 In response to questions by the Tribunal, Mr Kronberger explained that his understanding of the ST Act is that a person who obtains an interest in the scheme after registration of a by-law can, at any point in time, bring an application for the by-law to be set aside if the requirements of the ST Act had been breached when the by-law was adopted. The right to bring an application is therefore not limited to proprietors at the time when the vote was taken.

54 Mr Kronberger explained that s 83(1) of the ST Act provides for several classes of persons to lodge an application. The classes are a strata company, an administrator, a proprietor, a person having an estate or interest in a lot, an occupier or other resident in a lot. Mr Kronberger contended that the applicants had an interest in Lot 2 at the time of the AGM on the basis that the ST Act protects the rights of purchasers. The applicants can therefore, according to Mr Kronberger, bring an application under s 83(1) of the ST Act for the Tribunal to rectify a complaint that arose at the AGM although settlement occurred after the AGM and the registration of the by-laws.

55 Mr Kronberger explained that s 93(1) of the ST Act provides that "any person entitled to vote at a meeting of a strata company (including both a first mortgagee and a proprietor who is the mortgagor of a Lot)" may apply for an order relating to the by-laws. Mr Kronberger contended that the applicants have standing to bring the application pursuant to s 93(1) of the ST Act since they are proprietors, even though they were not entitled to vote at the AGM. Mr Kronberger contended that the subsection does not limit the right to bring an application to persons who were entitled to vote at a specific AGM but it includes persons who become eligible to vote at a later point in time. The section therefore provides for a general "review provision" which enables any proprietor to bring an application to the Tribunal. Mr Kronberger concluded a new

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proprietor can, at any stage when new information becomes available, bring an application pursuant to s 93(1) of the ST Act.

56 Finally, Mr Kronberger referred to s 97(1) of the ST Act that enables a proprietor or first mortgagee of a lot to bring an application to SAT to invalidate a resolution of a meeting if the provisions of the ST Act had not been complied with in relation to the said meeting. In considering the merit of the application, the Tribunal must, according to Mr Kronberger, take into account whether a failure affected the rights of "any person" (s 97(2)(a) of the ST Act). Mr Kronberger contended that, for the same reasons set out in regard to s 83(1) of the ST Act, a person who becomes a proprietor after the registration of a by-law may also bring an application pursuant to s 97(1) of the ST Act if it appears that the ST Act had been breached. The fact that the subsection refers to "any person" is indicative of the intent of the legislator that not only the interests of proprietors must be taken into account but also other categories of persons such as tenants or purchasers.

57 Mr Kronberger concluded that the applicants have standing to bring the application.

58 Mr Park, on behalf of the respondents, contended that the applicants do not have standing to bring the dispute to the Tribunal and sought to have the application struck out.

59 In essence, Mr Park submitted that the proprietor of Lot 2, Bellevue Apartments Pty Ltd, acted within its powers by nominating Mr Bertram as general proxy to represent its interests at the first AGM. The proprietor had received the draft by-laws prior to the AGM and instructed Mr Bertram to vote for it. According to Mr Park, there was nothing untoward to the general proxy or the decision of the AGM.

60 If, according to Mr Park, the applicants are in dispute with the vendor in regard to matters arising from the power of attorney that formed part of the contract for sale, the dispute belongs to another jurisdiction since it is of a contractual nature. If the terms of the proxy to Mr Bertram are, as alleged by the applicants, inconsistent with the power of attorney that formed part of the contract for sale, the remedy, if any, also does not lie within the jurisdiction of the Tribunal. Mr Park further contended that if the applicants pursue a contractual dispute, the vendor and not the strata company should be the respondent.

61 Mr Park further explained that the amended by-laws were registered on 23 November 2004 – before the date of settlement of Lot 2 in the name

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of the applicants. Annexure B of strata plan 45236 contains the list of encumbrances which includes the following: "Notification J094143 Notification of change of by-laws 23 November 2004".

62 The new by-laws were therefore available for the world, including the applicants who were legally represented, to take notice of, and it formed part of the certificate of title prior to settlement.

63 If the applicants were not satisfied with the by-laws or if they were of the view that the vendor did not fully disclose to them the information required in s 69A of the ST Act, they could have avoided the contract for sale pursuant to s 69D(1) of the ST Act. Section 69B of the ST Act, however, only places the original proprietor under certain obligations if the strata plan has not been registered or if the first AGM has not been held. In this matter, Mr Park concluded, s 69B of the ST Act does not apply since the strata plan had been registered and the first AGM had been held prior to settlement in the name of the applicants. The by-laws were, therefore, properly registered and available for the applicants' information.

64 Mr Park further explained that there was no breach of s 5C of the ST Act since the standard Sch 1 and Sch 2 by-laws were applicable at the time of registration of the strata scheme. The amended by-laws were only brought about after the registration of the scheme.

65 Mr Park further contended that pursuant to s 68 of the Transfer of Land Act 1893 (WA) (TL Act), a strata title is taken subject to any encumbrances registered against it on the certificate of title. In regard to this application, Mr Park submitted that the registered by-laws are lawful encumbrances registered against the title and that the applicants were therefore deemed to have knowledge thereof from the time the by-laws were registered. According to Mr Park, the applicants cannot, by law, claim lack of knowledge of the by-laws after registration thereof. They bought Lot 2 subject to the by-laws. The certificate of title issued to the applicants included the strata plan and by-laws thereto, and the applicants are bound thereby.

66 According to Mr Park, the only ground to challenge an encumbrance in accordance with s 68 of the TL Act is it was registered pursuant to fraud. Mr Kronberger conceded, however, that fraud is not alleged in this matter. Further, s 63(1) of the TL Act determines:

"No certificate of title created and registered upon an application to bring land under this Act or upon an application to be registered as proprietor on a transmission shall be

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impeached or defeasible by reason or on account of any informality or irregularity in the application or in the proceedings previous to the registration of the certificate; and every certificate of title created and registered under any of the provisions herein contained shall be received in all courts of law as evidence of the particulars therein set forth or incorporated and of the entry thereof in the Register, and shall be conclusive evidence that the person named in such certificate as the proprietor of or having an estate or interest in or power to appoint or dispose of the land therein described is seized or possessed of such estate or interest or has such power."

67 The applicants according to Mr Park acquired Lot 2 subject to the encumbrances registered against the title and cannot bring an application against the strata company for the by-laws to be repealed. The Tribunal is therefore also required to give effect to the registered by-laws.

68 Mr Park asserted that the applicants either knew or should have known about the by-laws since it was part of the public record and, therefore, they took transfer of the property subject thereto. He referred the Tribunal to the matter of White v Betalli & Anor 2006 NSWSC 537 in the Equity Division of the Court, where it was held, at [46], that "a person who buys a Lot in a strata scheme is on notice of the rights and obligations created or imposed, in relation to the original by-laws which accompanied the registration of the strata plan".

69 In regard to the classes of persons referred to in s 83(1), s 93(1) and s 97(1) of the ST Act, Mr Park contended that all references to "proprietor" or "person entitled to vote" must, in light of his foregoing submissions, be construed in regard to the status of the applicants at the time of the AGM. The applicants, who were not, at the time of the AGM proprietors or entitled to vote, are therefore disqualified from bringing an application under those sections.

70 In response to a question by the Tribunal, Mr Park explained his understanding of the working of s 97(1) of the ST Act as follows:

"I'd suggest that it is actually pointed to people who are owners at the time of the meeting, because what it seeks, what the section is trying to do is to say, 'If you go to a meeting, and whilst you are there something goes wrong, then you can make an application to the Tribunal for orders under this section' … ".

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71 According to Mr Park, it would be an "absurdity" if by-laws were properly enacted and registered and a new proprietor comes along and says, "well, I'm now an owner, and I want to overturn everything that's happened … ".

72 Mr Park concluded, therefore, that the applicants do not have standing to bring the application.

Consideration by Tribunal of submissions regarding the standing of the applicants to bring the application

73 The Tribunal will first deal with the question of standing as raised by the parties, before considering the relief, if any, that may arise from s 83, s 93 and s 97 of the ST Act.

74 The ST Act contains several sections that allow for a by-law to be declared invalid, for a by-law to be repealed or for a by-law to be reinstated by order of the Tribunal (for example, s 93, s 94, s 99A of the ST Act). If such an order is made, a copy must be lodged with the Registrar of Titles to record it (s 115(3) of the ST Act).

75 The Tribunal accepts Mr Park's contention that a by-law is binding and must be complied with while it is registered. But it does not follow that the validity of a by-law cannot be challenged. A by-law is binding for as long as it is registered but the validity thereof can be challenged on the grounds as set out in the ST Act.

76 This conclusion of the Tribunal is consistent with the approach taken in New South Wales that "(t)he mere fact that the Registrar-General has registered a notification of change of by-laws is not evidence of the validity of such change. The Registrar-General in determining whether to register a notification is only concerned as to the form of the notification and its compliance with the Regulations as to form" (Bugden, GF Strata Title Management Practice in New South Wales 6th Edition, CCH Australia Ltd, Sydney (1993) page 211).

77 The registration of a by-law does not automatically mean it is cast in stone or beyond legal challenge.

78 Although Mr Park is correct to point out that the world, including the applicants, are deemed to have been aware of the by-laws on registration, there is nothing to suggest that registration validates an otherwise invalid by-law. The validity of a registered by-law can be challenged on the grounds set out in the ST Act - for example, if it was made without power,

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if it was not made in accordance with the ST Act or if it did not have regard to the interests of all proprietors. There is no time limit within which an application to set aside a by-law must be brought. This gives further credibility to the interpretation that a challenge can be lodged at any time after the registration of a by-law.

79 The ST Act does not create a general review mechanism whereby any by-law can be challenged merely because a disgruntled proprietor is not satisfied with it. The ST Act is very specific in setting out the grounds that must be established before a by-law can be declared invalid or repealed. This interpretation of the Tribunal is consistent with the approach in White v Betalli to which Mr Park referred. In that matter, the court recognised, at [45], that the owners' power to make a by-law is curbed by the obligation that the by-law must be "for proper purposes". If not, the by-law can be set aside by the reviewing entity.

80 In regard to the question of standing, the Tribunal is requested to determine whether the applicants, who became proprietors after the registration of the by-laws, are entitled to bring an application to challenge the by-laws.

81 The Tribunal will later deal with the potential relief offered by s 83, s 93 and s 97 of the ST Act, but suffice to say that the preferred interpretation of the ST Act does not support the contention of Mr Park that only a person who had an interest at the time of a meeting can bring an application for a by-law to be set aside.

82 The purpose of the ST Act is to create a mechanism for an invalid by-law that has been registered, to be repealed. The focus of the ST Act is to rectify a wrong, regardless of whether the applicants were proprietors at the time the decision was made. If Mr Park's contention was taken to an extreme, it would mean that a by-law, once registered, cannot be challenged under the ST Act if the ownership of all the lots in a strata scheme had changed. Such an outcome would place an otherwise invalid by-law beyond review for the mere fact that the ownership of all lots had changed. It is most unlikely that Parliament had such an outcome in mind with the legislation.

83 The Tribunal can, therefore, find no impediment to prevent the applicants from bringing the application, even though they became proprietors after registration of the by-laws.

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84 The applicants are currently proprietors and the Tribunal finds therefore that they do have standing, for purposes of s 83(1), s 93(1) and s 97(1) of the ST Act, bring the application.

85 Several other issues were raised during the hearing in regard to the terms of contract for sale and the power of attorney between the applicants and the vendor. These matters fall outside the jurisdiction of the Tribunal and there is no need for the Tribunal to make further findings in that regard. Section 69A and s 69B of the ST Act do not apply to this matter as far as the Tribunal's jurisdiction is concerned. Section 69A deals with notifiable information to be given by a vendor to a purchaser. The remedy, if the information is not provided, is voidance of the contract pursuant to s 69D of the ST Act. It is not within the jurisdiction of the Tribunal to resolve a dispute that arises under the alleged failure to disclose information to a purchaser. The time for this remedy had passed when settlement in the name of the applicants occurred. Section 69B applies to notifiable information to be given by the original proprietor to the applicants, but this section does not apply if the strata plan has been registered or if the first AGM has occurred (s 69B(1)(a) and s 69B(1)(b) of the ST Act). In this matter, the strata plan had been registered and the first AGM had taken place prior to settlement of Lot 2 in the name of the applicants. The Tribunal is also not the appropriate forum, as acknowledged by the parties, to determine contractual issues that may arise from the alleged inconsistency between the power of attorney and the proxy issued to Mr Bertram.

86 The Tribunal finds, therefore, that the applicants have standing to bring an application pursuant to s 83(1), s 93(1) and s 97(1) of the ST Act for the by-laws to be repealed.

4.1.2 Submissions and findings regarding possible relief available to the applicants

87 The Tribunal will now deal with the respective sections of the ST Act under which relief to have the by-laws repealed is claimed by the applicants.

Section 83(1) of the ST Act

88 Mr Kronberger contended that the dispute had arisen due to the unauthorised dealing with common property by the respondent. He contended that the power to make by-laws pursuant to s 42(8) of the ST Act does not include the power to dispose of common property for no
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consideration. The strata company must, pursuant to s 35 of the ST Act, control and manage common property for the benefit of all proprietors.

89 In a similar vein, the exclusive use of common property for parking (By-law 25(1)) was enacted pursuant to s 42(8) of the ST Act which enables the strata company to confer exclusive use of common property subject to it being supported by a resolution without dissent.

90 Mr Park contended that even if the applicants had standing under this subsection to bring an application, the orders they seek cannot be made due to the working of s 83(4) of the ST Act. He noted that the original application lodged by the applicants only referred to s 83(1) of the ST Act, and it was only after they had realised that the application might be dismissed due to the working of s 83(4) of the ST Act, that they sought leave to amend the application to include s 94 and s 97 of the ST Act.

91 The Tribunal's point of departure is that an application to settle a dispute or to rectify a complaint in regard to a resolution that can only be enacted without dissent, cannot be dealt with under s 83(1) of the ST Act for reasons of the working of s 83(4) of the ST Act. Section 83(4) of the ST Act provides as follows:

Nothing in subsection (1)

empowers the State Administrative Tribunal to make an order under that subsection for the settlement of a dispute, or the rectification of a complaint, with respect to the exercise or performance of, or the failure to exercise or perform, a power, authority, duty or function conferred of imposed on the strata company by this Act where that power, authority, duty or function may, in accordance with any provision of this Act,

only to be exercised

or performed pursuant to a unanimous resolution,

resolution without dissent

or a special resolution." (Tribunal emphasis.)

92 By-law 25(1) regarding the exclusive use of the basement parking areas was enacted or is deemed to have been enacted pursuant to s 42(8) of the ST Act. The by-law also falls outside the relief offered by s 83(1) of the ST Act due to the working of s 83(4) of the ST Act.

93 The application for an order to repeal the by-laws pursuant to s 83(1) of the ST Act must therefore be dismissed.

Section 93(1) of the ST Act

94 Mr Kronberger contended that the resolutions to allow for a resubdivision of the common property and for the exclusive use of the
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common property parking bays for the benefit of two proprietors without consideration payable to the other proprietors, are clearly not in the interest of all proprietors and brings the decision within the ambit of s 93(3)(c) of the ST Act.

95 Section 93(3)(c) of the ST Act determines -

"On the making of an application under sub-section (1) the State Administrative Tribunal may make an order under this section if it is satisfied that the by-law or the repeal or amendment of a by-law -

…

(c) should not have been made having regard to the interests of all proprietors in the use and enjoyment of their Lots or the common property."

96 Under the arrangement of exclusive use that was approved by the applicants in the contract for sale, all the proprietors would have had an undivided share in common property of the roof area. Pursuant to Bylaws 26 and 27 however a re-subdivision and transfer of ownership of the roof area to two or possibly one proprietor is foreshadowed, without any consideration payable to other proprietors. This arrangement according to Mr Kronberger is clearly not in the interests of the applicants since they stand to lose an interest in a valuable piece of common property without consideration.

97 Mr Kronberger contended that the re-subdivision of the common property will also impact on the respective unit entitlements with the consequential reduction of voting power of the applicants from the current 18/100 to 16/100.

98 The creation of an additional residential lot will further bring with it an increase in the wear and tear of lifts and other facilities available to the proprietors of the existing lots.

99 Mr Kronberger referred to the evidence of Mr Bertram, who explained that he did not see any reason to bring the changes to the draft by-laws to the attention of the applicants since they had already agreed to the exclusive use of the roof area being reserved for the proprietors of Lots 4 and 5. But according to Mr Kronberger, there is a fundamental difference between agreeing to exclusive use of common property and

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being confronted with a possible transfer of ownership by means of resubdivision.

100 Mr Kronberger also contended that s 42(8) of the ST Act does not allow the strata company to transfer or dispose of common property. Its powers are limited to the use and control of common property. There is, according to Mr Kronberger, a duty on the strata company to control and manage common property for the benefit of all proprietors (s 35(1)(b) of the ST Act), and this power does not authorise the strata company to dispose of common property in a manner foreshadowed by By-laws 26 and 27.

101 It is therefore patently clear, according to Mr Kronberger, that the bylaws should not have been enacted having regard to the interests of all proprietors in the use and enjoyment of their lots or the common property. The strata company acted outside its powers, and pursuant to s 93(3)(a) of the ST Act, the by-laws should be repealed. The conclusion, according to Mr Kronberger, is consistent with the finding of the New South Wales Full Court decision in Houghton & Anor v Immer (No 155) Pty Ltd (Supreme Court of New South Wales) Matter No CA 40764/96 2378/96 in which the court held that the doctrine of fraud on a minority is of general application and applies to a strata company. A resolution of a strata company is voidable if the company acts outside its powers or if it defrauds a minority.

102 Mr Park contended in response that all the registered proprietors at the time were duly represented at the AGM and that they had the power to make decisions, including to enact amendments to the standard Sch 1 bylaws.

103 In regard to the re-subdivision of common property, the strata company acted pursuant to s 42(1)(b) and s 42(2)(b) of the ST Act which authorises the resubdivision of common property. There is no evidence to support the contention of Mr Kronberger that the proprietors did not have regard to the interest of all proprietors at the first AGM when the resubdivision was approved. The draft amendments to the by-laws were properly circulated to all proprietors and the by-laws were approved by resolution without dissent by the registered proprietors. The proprietors took into account the interests of all proprietors at the AGM and they were fully aware of the implications and consequences of the amendments to the by-laws.

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104 Mr Park further contended that an application in regard to the exclusive use of the parking bays cannot be made under s 93 of the ST Act due to the working of s 93(5) of the ST Act which specifies that s 93 does not apply in respect to a by-law made or deemed to be made under s 42(8) of the ST Act. The application for an order to set aside the exclusive use by-law of common parking bays is therefore misconceived. Mr Park reiterated his earlier submission that the proprietors acted within their powers, and if there is any inconsistency between the contract for sale and the by-laws, it is a contractual matter that the applicants must pursue with the vendor in another jurisdiction.

105 The Tribunal accepts the contention of Mr Kronberger (acknowledged by Mr Park) that the current By-laws 25, 26 and 27 dealing with the exclusive use of the parking bays and the possible resubdivision of common property are not consistent with the Sch 7 draft by-laws that formed part of the contract for sale between the applicants and the vendor. The evidence of Mr Bertram also confirms it. Although the applicants had agreed to the common property roof area being set aside for the exclusive use of the proprietors of Lots 4 and 5, the other proprietors would have retained an undivided share therein. If the resubdivision is implemented, the applicants would lose their undivided share in that part of the common property for no consideration. It is therefore understandable that the applicants were surprised when they came to realise the implications of the by-laws.

106 Section 93 of the ST Act, however, sets a very specific framework against which the application must be considered. The mere fact that the applicants did not note the registered by-laws prior to settlement does not provide a basis to succeed under s 93 of the ST Act. Their unawareness of the bylaws is, therefore, not in itself a basis to succeed. The purpose of registration of a by-law is to put the world and potential proprietors on notice of the existence and terms thereof. The applicants can therefore not merely rely on ignorance - they must demonstrate that the requirements of s 93(3) of the ST Act are fulfilled.

107 The Tribunal will first deal with the excusive use of the common property parking bays (By-law 25(1)) pursuant to s 42(8) of the ST Act.

108 The Tribunal accepts the submission of Mr Park that due to the working of s 93(5) of the ST Act, the applicants cannot bring an application under s 93 for the repeal of a by-law made under s 42(8) of the ST Act. The strata company acted within its powers when, pursuant to a resolution without dissent, it enacted the by-law to provide the

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exclusive use of the common area parking bays to the proprietors of Lots 4 and 5.

109 Section 93(5) of the ST Act is unequivocal that a by-law enacted under s 42(8) of the ST Act, or deemed to have been enacted under the subsection, cannot be repealed pursuant to s 93(3) of the ST Act. The Tribunal is satisfied that By-law 25 was enacted or is deemed to have been enacted pursuant to s 42(8) of the ST Act and that it cannot be repealed pursuant to s 93(3) of the ST Act due to the working of s 93(5) of the ST Act.

110 The application for By-law 25 to be revoked pursuant to s 93(3) must therefore be dismissed.

111 The Tribunal will secondly deal with the re-subdivision of common property in accordance with By-laws 26 and 27.

112 Section 93(3) of the ST Act provides that the Tribunal "may" make an order to repeal a by-law if it is "satisfied" that the by-laws should not have been made having regards for the "interests of all proprietors" in the use and enjoyment of their lots or the common property.

113 The Tribunal has a discretion that it "may" order the repeal of the bylaws if it is satisfied that the requirements of s 93(3)(c) of the ST Act are met.

114 In the exercise of its discretion, the Tribunal will henceforth address key requirements of s 93(3) of the ST Act:

115 Subsection (c) determines that the Tribunal must be satisfied the bylaws "should not have been made having regards for the interests of all proprietors … ". (Tribunal emphasis.)

116 By using the words "having regards", the subsection does not contemplate that all the proprietors in a strata scheme would necessarily be affected in exactly the same way by a new by-law. The mere fact that a proprietor disagrees in hindsight with the merit of a by-law, or is dissatisfied with the way in which a new by-law operates, is not sufficient to demonstrate that the requirement of "having regard" to the interests of all proprietors have not been fulfilled. The applicants must show there was an actual failure on the part of the strata company to "have regard" for the interests of all proprietors.

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117 It is in the very nature of a by-law enacted pursuant to s 42(1)(b) or s 42(8) of the ST Act that some proprietors may derive certain benefits from it and others not. Although by-laws dealing with common property in the majority of cases deal with the "use" of common property, the ST Act also envisages that common property may be re-subdivided. This shows that the strata company is not only entitled to deal with common property in a general management and control sense (s 35(1)(c) of the ST Act) as suggested by Mr Kronberger, but that it may dispose of common property pursuant to the ST Act provided the decision is supported by a resolution without dissent after having had regard to the interests of all proprietors.

118 The test for "having regard" is therefore not if a by-law affects all proprietors in exactly the same way. The test is whether proper account was taken of the respective interests of proprietors prior to the enactment of the bylaw. The Macquarie Concise Dictionary describes "having regard" as "to take into account" or "to look at" (Macquarie, 3rd Edition, Sydney, 2004). If bylaws had to affect each proprietor in exactly the same way and to the same extent, the utility of by-laws as a legal mechanism to deal with common property would be severely diluted and limited.

119 The ST Act does not set out criteria as to how the Tribunal must go about determining if the AGM had regard for the interests of all proprietors. The Tribunal must inevitably rely on all information of relevance to the enactment of the by-laws to inform itself - for example, whether all proprietors were represented at the AGM, whether there was opportunity to discuss the various options and the implications of the bylaws, whether proper minutes were kept of the AGM and the recording of the decision in the minutes, whether some proprietors registered an objection after the AGM against the by-laws in accordance with s 3AC of the ST Act, and any other relevant information.

120 In the current application, it must be borne in mind that the proprietors at the time of the AGM were the same persons who had undertaken the entire development. Mr Day, Mr Smith and Bellevue Apartments Pty Ltd were the tenants in common of the land and after registration of the strata plan, they became the proprietors of the respective lots with Bellevue Pty Ltd, the proprietor of Lots 1 - 3, Mr Smith, proprietor of Lot 4, and Mr Day, proprietor of Lot 5. As developers of the scheme and the original proprietors, the three parties resolved at the AGM to effect certain changes to the standard Sch 1 bylaws.

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121 The proprietors were all represented at the AGM by Mr Bertram; they had each received a copy of the proposed amendments to the by-laws prior to the AGM; they had instructed Mr Bertram to vote in favour of the by-laws on their behalf, and Mr Bertram, in evidence, explained that he understood exactly what he voted for in regard to the proposed resubdivision. Subsequently, the by-laws were enacted by resolution without dissent. None of the proprietors lodged a complaint or objection after the AGM under s 3AC of the ST Act.

122 It is also noted that none of the proprietors at the time of the AGM or new proprietors have attempted for the by-laws to be repealed, amended or replaced through a democratic process as provided for by the ST Act.

123 The Tribunal is satisfied that, on the information before it, the AGM had regard to the interests of proprietors in the use and enjoyment of their lots and the common property.

124 The next question to consider is what is meant by the words "all proprietors"?

125 As summarised above, Mr Kronberger contended that it refers to current and future proprietors, while Mr Park contended that it refers to the proprietors at the time of the meeting.

126 As already explained, the Tribunal accepts that the use of the word "proprietor" in s 93(1) of the ST Act relates to current and future proprietors insofar as standing is concerned. The applicants, who were not proprietors at the time of the AGM, can therefore bring an application pursuant to s 93(1) of the ST Act. Does this mean that the word "proprietors" in subsection (c) also refer to current and future proprietors whose interests must be taken into account? Not necessarily.

127 The purpose and context of s 93(1) of the ST Act and s 93(3)(c) are different.

128 In s 93(1) of the ST Act, the basis for standing to bring an application is determined, while in s 93(3)(c) of the ST Act, "proprietors" are used in the context of interests at the time a decision was made at the AGM. This can only refer to the interests of proprietors at the time of the meeting when the vote was taken.

129 Section 42 clothes the strata company with the power to make bylaws, and the Tribunal is satisfied that on proper construction, regard

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must be had to the interests of existing proprietors at the time of the decision.

130 The Tribunal does not agree with Mr Kronberger that the enactment of the by-laws is an example of fraud on the minority as per the Houghton case. The facts are different to that in Houghton since the aggrieved persons in that matter were proprietors at the time of the decision, while in this matter the applicants became owners after the AGM at which the by-laws were approved and after registration thereof. There is no evidence to suggest a fraudulent action by the proprietors at the time of the AGM.

131 In Houghton, the court found the remedy in equitable principles. If equitable relief is available to the applicants, the application should, however, not be before the Tribunal since it is constrained to grant relief as set out in the ST Act.

132 The applicants could have taken legal recourse to withdraw from the contract for sale or to seek an alternative remedy had they noted the new bylaws were not consistent with the draft by-laws they had agreed to.

133 The Tribunal accepts that a re-subdivision may affect unit entitlement but that in itself, is not a ground to repeal the by-law as suggested by Mr Kronberger.

134 The Tribunal also notes that the proposed re-subdivision has not yet been effected and that the roof area and all the fixtures attached thereto remain common property. There is no legal impediment on the current proprietors to seek to revoke or amend Sch 1 By-laws 26 and 27 by means of the same statutory mechanisms by which it was enacted.

135 Although Mr Kronberger contended there was "indecent haste" to convene the first AGM, Ms Loguidice explained that it is not uncommon for the first AGM to be hastily arranged since timeframes are tight. There is lack of evidence to support Mr Kronberger's contention that the "only reason that can be given to get the by-laws in place, before the applicants, or other proprietors, became registered of their lots" was for the developers to say "well, that's it. We've done it. You are bound by it". In fact, the vendor ran the risk of the applicants withdrawing from the transaction or that they could seek another remedy after they became aware that the registered by-laws were different from the draft by-laws that formed part of the contract for sale.

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136 The preferred construction of s 93(3)(c) of the ST Act is therefore that the interests of existing proprietors at the time when the vote was taken in the AGM had to be regarded prior to the enactment of a by-law. This is consistent with the meaning Mason J attached to "have regard to" as "to take into account and to give weight" to all the relevant interests at the time of making a decision. (Re R.J.D Hunt; Exparte Sean Investments Pty LtdHigh Court 1979 53 ALJR 552 at 554). The Tribunal is satisfied that the AGM did take into account all the "matters to be given weight as a fundamental element in decision-making" as per Mason J. (Also refer, in this regard, to Re Bundy and Secretary, Department of Housing and Construction (2 ALD 735, 1980) and The Queen v Toohey, Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327 at 333, 1983.)

137 The Tribunal's conclusion is consistent with the interpretation given to s 157 of the New South Wales Strata Schemes Management Act 1996 (NSW) where the application for a by-law to be revoked must take into account the interest of "all Lot owners". The New South Wales Strata and Community Titles Law suggests that -

"the use of the words 'all lot owners' (if taken literally) would make it almost impossible to establish grounds for an order. In practice, using the best available interpretation, the section will only be useful where one lot owner (or a small minority of lot owners) benefit from a change to the detriment of other Lot owners." (

New South Wales Strata and Community Titles Law

CCH Australia Ltd Sydney 2000: par 14 – 250)

138 At the time when the resolution was put to a vote at the AGM, there were three registered proprietors and they all voted in favour of the resolution on the basis of information before them. The Tribunal is therefore satisfied that regard was had to the interests of all the proprietors.

139 The Tribunal finds that -

• the applicants were not proprietors of Lot 2 at the time of the AGM;

• the registered proprietor of Lot 2 at the time of the AGM was Bellevue Apartments Pty Ltd;

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• the registered proprietors of the five units were all represented at the AGM. These proprietors where responsible for the development of the strata scheme and there is no evidence to suggest their respective interests had not been shown regard prior to the enactment of the by-laws;

• the proposed amendments to the by-laws had been circulated prior to the AGM and had been considered by all the proprietors;

• the proprietors authorised Mr Bertram by general proxy to support the proposed amendments to the Schedule 1 by-laws on their behalf;

• the ST Act allows a strata company to deal with common property by means of a re-subdivision;

• the by-laws were approved by a resolution without dissent;

• no objections pursuant to s 3AC of the ST Act were lodged after the AGM against the registration of the bylaws;

• the by-laws were duly registered, it appeared on the certificate of title of Lot 2, and the public are deemed to be aware thereof; and

• the applicants became proprietors after the registration of the bylaws and are deemed to have had full knowledge of the content thereof.

140 The Tribunal is not satisfied that pursuant to s 93(3)(c) of the ST Act, the applicants have shown that Sch 1 By-laws 26 and 27 should not have been made having regard for the interests of all proprietors in the use and enjoyment of the common property.

141 The application for an order pursuant to s 93(2) of the ST Act must therefore be dismissed.

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Section 97(1) of the ST Act

142 Section 97(1) of the ST Act provides as follows:

"Where, pursuant to an application by a proprietor or first mortgagee of a Lot for an order under this section, the State Administrative Tribunal considers that the provisions of this Act have not been complied with in relation to a meeting of the strata company, the State Administrative Tribunal may, by order -

(a) invalidate any resolution of, or election held by, the persons present at the meeting; or

(b) refuse to invalidate any such resolution of election."

143 Mr Kronberger contended that the AGM did not comply with the requirements of the ST Act for three reasons.

144 Firstly, the minutes of AGM were not confirmed at the next AGM that was held on 6 February 2006.

145 Secondly, the certificate of a licensed valuer as required by s 14(3) of the ST Act in regard to the proposed unit entitlement, was incorrect since it referred to the strata scheme as a "survey-strata" and it was not signed on the date of the AGM but thereafter on 18 November 2004.

146 Thirdly, the "reminder" enclosed at the bottom of page three of the minutes were in a different font and size than the rest of the minutes and appears to have been added at a later point in time.

147 Mr Kronberger contended that if the Tribunal is satisfied that provisions of the ST Act have not been complied with, the resolutions may be invalidated pursuant to s 97(1)(a) and s 97(2) of the ST Act.

148 Mr Park responded that the AGM was conducted in full compliance with the ST Act and that none of the alleged incidents of non-compliance raised by Mr Kronberger has any merit.

149 In response to the three issues raised, Mr Park contended that firstly, there is no requirement in the ST Act for minutes of an AGM to be signed at the next AGM in order for decisions to be valid and binding. Secondly, there is no requirement that the certificate referred in s 14(3) of the ST Act must be completed and signed at the time when the resolution is moved. Section 14(3) of the ST Act refers to the certificate that must be

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completed at the time of lodgement with the Registrar of Titles and must accurately reflect the outcome of the AGM. The certificate complied with those requirements. The reference to the scheme as a "survey strata" is in error, but it does not affect the validity of the certificate. Thirdly, the evidence of Ms Loguidice is that she does her own typing and that she copied the text of the "reminder" from another document and inserted it into the minutes – hence the difference in font and type. There is nothing sinister about it and Mr Kronberger acknowledged that no fraud is alleged.

150 Mr Park concluded that the by-laws were lawfully enacted and therefore binding on the applicants.

151 The Tribunal must be satisfied that provisions of the ST Act have not been complied with before it "may" take the next step of considering whether to invalidate a resolution. The Tribunal has a discretion to take into account the seriousness of the alleged non-compliance with the ST Act before it considers setting aside a resolution. It would not be in the public interest if an overly technical or zealous approach is taken whereby resolutions without dissent of an AGM are set aside and by-laws repealed for trivial reasons.

152 The Tribunal will hence address each of the alleged breaches of the ST Act.

153 Firstly, the Tribunal is satisfied that the AGM was constituted in a proper manner in accordance with the ST Act. Ms Loguidice gave evidence that she sent notices of the meeting pursuant to s 3AC(1)(a) of the ST Act in time to the proprietors, and the budget and proposed amendments to the standard by-laws were enclosed therein. There was no statutory obligation on Ms Loguidice to have notified the applicants, or any other purchaser, of the AGM or of the content of the agenda. She only had a responsibility towards the registered proprietors, and the Tribunal accepts that they were properly notified. She correctly noted in the minutes of the AGM the general proxies held by Mr Bertram on behalf of all the proprietors pursuant to Sch 1 By-law 14(4) of the ST Act. The minutes of the AGM was sent to the proprietors and to the new purchasers who acquired their lots after enactment of the new by-laws. Although the Tribunal accepts that it may be good practice to put minutes of an AGM to the next AGM for confirmation, there is no requirement in the ST Act for this to be done in order for a resolution without dissent to be binding. The Tribunal notes that the applicants, who received a copy of the minutes of the AGM held on 8 November 2004 and who were in

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attendance at the AGM held on 6 February 2006, did not raise any objections at the second AGM in regard to matters arising from the minutes of the first AGM. The first contention raised by Mr Kronberger must therefore be dismissed.

154 Secondly, s 14(2) of the ST Act requires that the certificate of a registered valuer which is to accompany a plan of re-subdivision lodged for registration, must be in the prescribed form. The subsection does not require that the certificate must be completed in the prescribed form at the time of an AGM at which the proposed re-subdivision is approved. It must, however, be complete at the time when the re-subdivision is lodged for registration with the Registrar of Titles. The certificate must therefore be an accurate reflection of the resolution that enacted the bylaw for resubdivision pursuant to cl 8 of Sch 2A of the ST Act.

155 The Tribunal is satisfied that Form 27, as required by reg 37(1)(a) of the Strata Titles General Regulations 1996 (WA) (Regulations), was signed by the valuer on 18 November 2004 in accordance with the ST Act and that it accurately reflects the decision of the AGM. There is no requirement for the certificate to be signed on the same date as the AGM or for it to have been tabled at the AGM. The only requirement is for the certificate to accurately reflect the by-law that authorises the proposed resubdivision. The Tribunal is satisfied that the statutory requirements have been complied with in regard to the completion of the certificate. The second contention of Mr Kronberger must therefore be dismissed.

156 Thirdly, the Tribunal does not find anything untoward to the notation that appears at the bottom of page 3 of the minutes of the meeting. Mr Kronberger did not allege that the note was inserted in a fraudulent manner, and the explanation given by Ms Loguidice for the difference in font is entirely plausible. There is nothing to suggest that a requirement of the ST Act had not been complied with. The third contention of Mr Kronberger must therefore be dismissed.

157 In light of the foregoing reasoning and findings, the Tribunal does not consider that the provisions of the ST Act have not been complied with in relation to the AGM.

158 The application to have resolution 15 of the AGM authorising the resubdivision invalidated must therefore be dismissed.

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4.2 Were the alterations brought about to the roof area of the common property unauthorised?

159 Mr Kronberger contended that the exclusive use Sch 1 Bylaw 25(3)(c) and the draft By-law 27(2)(c) in Sch 7 to the contract for sale were breached, since alterations were brought about to the roof area of the common property without the written consent of the strata company.

160 Mr Kronberger contended that substantial works have taken place on the roof area after the applicants became proprietors of Lot 2, and that they and other proprietors should have been consulted.

161 Mr Kronberger acknowledged that the applicants had agreed as per the contract for sale for "some facilities" to be erected on the roof area, with maintenance thereof being the responsibility of the proprietors of Lots 4 and 5. Mr Kronberger, however, referred to the evidence of Mr Bertram who acknowledged that the difference in value between the proposed structures and those erected was about $2 million to support his contention that some of the works were unauthorised.

162 The Tribunal notes, however, that the applicants were not called to give evidence, nor did they provide a witness statement or other documentary evidence to support their contention that some of the works were unauthorised or to assist the Tribunal to distinguish between which parts of the works were authorised and which parts were not authorised.

163 Mr Park contended that the structures that have been erected on the roof area are consistent with the plans and the draft by-laws approved by the applicants and By-law 25(3)(b) as registered. The amount to which the actual costs of construction exceeded the initial plans can be attributed to interior finishing and add-ons and not necessarily due to the external footprint of the structure or the presence of unauthorised works.

164 The building works were, according to Mr Park, completed prior to registration of the strata plan. This was confirmed by the evidence of Mr Bertram who told the Tribunal that only minor renovations have taken place since the completion of the building. The applicants did not, according to Mr Park, provide any specific evidence of the alleged unauthorised works that were erected after they became proprietors of Lot 2. It appears, therefore, that the applicants' complaint is very general, vague and without any specifics.

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165 Mr Park argued that even if there were structures to which the applicants did not agree to in the contract for sale, the dispute must be resolved on contractual principles in another jurisdiction.

166 The Tribunal is guided by Sch 1 By-law 25(3) to determine this question. It is particularly By-laws 25(3)(b) and 25(3)(c) that are of relevance. These determine that -

"(3) The proprietors of Lots 4 and 5 shall -

…

(b) be equally liable for all costs associated with the repair, maintenance and upkeep of the spa, landscaping, water features, entertainment area, kitchen, barbeque and ablutions;

167 This by-law is consistent with draft By-law 27(2) contained in Sch 7 to the contract for sale. It is agreed between the parties that some structures had been authorised for erection on the common property roof area. The applicants contended that "some" unauthorised alterations or additions had been made to the authorised structures. The applicants were not called to give evidence to explain what they believed to be unauthorised structures. The applicants also did not provide any other documentary evidence, expert reports or photographs to support their contention. Mr Kronberger could also not refer the Tribunal to specific alterations to the common property that occurred after settlement and purportedly without authorisation.

168 It appears from the evidence of Mr Bertram that most, if not all, of the structures were part of the original construction of the building and consistent with the terms of the contract for sale and approved building plans.

169 The Tribunal accepts the evidence of Mr Bertram that all the construction work occurred prior to registration of the strata plan, and that the work conducted since then related to decoration, maintenance, waterproofing and internal finishing touches.

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170 The mere fact that the cost of the final product exceeded the original estimation by approximately $2 million does not mean anything unauthorised occurred. The Tribunal requested Mr Kronberger, during his closing submission, for more evidence regarding the alleged noncompliance with the by-law since, in the preliminary view of the Tribunal, a case had not been made out. The Tribunal requested as follows:

"I just want you to address the factual situation - what was agreed to by the applicants, in terms of a spa and whatever, and what has eventuated? Because I am not [clear]. I would like to have submissions on that, or see photographs or do a site inspection or something, but, at the moment, that, to me, is very vague."

Mr Kronberger could not, however, identify any evidence, save for referring to the amount of $2 million mentioned by Mr Bertram.

171 The Tribunal finds that the applicants have failed to demonstrate any discrepancy between the works that had been approved and the completed works. As a consequence, they also failed to establish that the ST Act or Sch 1 By-law 25(3)(c) had been breached.

172 The application for an order that some part of the improvements on the common property roof area were unauthorised must therefore be dismissed.

173 The Tribunal, however, finds that the request by the applicants to be provided with a copy of the building licence for the works on the roof is reasonable. The works are situated on common property, and the strata company and individual proprietors are acting within their rights to seek information to ensure that all approval processes have been complied with. This finding of the Tribunal is consistent with s 43(1)(b)(iii) of the ST Act which places an obligation on the strata company to make available for inspection the "plans, specifications, drawing, certificates and other documents delivered under section 49(3)". Section 49(3) of the ST Act deals with the documents that must be delivered to the strata company by the original proprietor.

174 The application for an order for the applicants to be given access for inspection to the building licence for the works on the roof must therefore succeed.

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4.3 Other issues regarding the use of common property pursuant to s 83(1) of the ST Act

175 The applicants also sought orders in their original application (orders 2 and 3) for the roller door to be left open and for access to lifts to be uninterrupted.

176 Mr Kronberger raised, in his written submissions (31 July 2006: par 38 and par 39), concerns in regard to access to lifts to the common property swimming pool, the failure to install roller doors, and other access issues. Mr Park responded, in his oral submissions, to these issues and indicated that they ought to be resolved amicably.

177 The Tribunal was not provided with a statement of evidence from the applicants or any other proprietor, nor were the applicants called to give evidence to substantiate the application for orders. The Tribunal is therefore only left with the contentions of Mr Kronberger to support the making of orders.

178 It appears that the issues the subject of the application were not raised at the AGM held on 6 February 2006, nor has the Tribunal been provided with any correspondence to demonstrate the merit of the application.

179 The Tribunal has insufficient evidence to make a finding as sought by the applicants. The application must therefore be dismissed.

4.4 Summary of findings

180 On the basis of all the evidence and taking into account the submissions of Mr Kronberger and Mr Park, the Tribunal finds that Sch 1 By-laws 25, 26 and 27 were lawfully amended by the AGM held on 8 November 2004. The amended by-laws were registered prior to settlement of Lot 2 in the name of the applicants, and they (and the rest of the world) are deemed to have been aware of it. Although there may be material differences between the draft by-laws enclosed as Sch 7 to the contract for sale and the by-laws as registered, matters of a contractual or equitable nature do not fall within the ambit of the ST Act, and the Tribunal cannot made orders in that regard.

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181 In summary, the Tribunal therefore finds, in response to the subissues identified in the introduction, as follows:

1) The applicants have standing pursuant to s 83(1), s 93(1) and s 97(1) of the

Strata Titles Act 1985

to bring the application.

2) The application for orders pursuant to s 83(1) of the Strata Titles Act 1985 to resolve the dispute in regard to Sch 1 By-laws 25(1), 26 and 27 fails due to the working of s 83(4) of the Strata Titles Act 1985.

3) The application for orders sought pursuant to s 93(3)(c) of the Strata Titles Act 1985 fails on grounds that the Tribunal is satisfied that the by-laws were enacted lawfully after regard had been given to the interests of all proprietors in the use and enjoyment of the common property.

4) The application for orders sought pursuant to s 97(1) of the Strata Titles Act 1985 fails on grounds that the Tribunal does not consider that provisions of the Strata Titles Act 1985 had not been complied with in relation to the AGM of 8 November 2004.

5) The application for orders sought that the alterations brought about to the roof area of the common property were unauthorised and therefore a breach of Sch 1 Bylaw 25(3)(c), fails on grounds of a lack of evidence.

6) The application for an order pursuant to s 83(1) of the Strata Titles Act 1985 for the applicants to be given access to the building licence for the works on the common property roof area succeeds.

7) The application for orders sought pursuant to s 83(1) of the Strata Titles Act 1985 in regard to the installation of the roller door and use of the lifts is dismissed for lack of evidence.

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Orders

1. The application for order 1 is dismissed.

2. The application for amended order 1A is dismissed.

3. The application for amended order 1B is dismissed.

4. The application for order 2 is dismissed.

5. The application for order 3 is dismissed.

6. The application for order 4 succeeds in part:

(a) The respondent must within 30 days from the date of these orders provide to the applicants access for inspection to all information in regard to the building licence for the roof area works pursuant to s 43(1)(b)(iii) of the

Strata Titles Act 1985

(WA);

(b) The application for an order that part of the roof area structures were erected without written consent of the strata company is dismissed.

7. There is liberty to apply for costs within 30 days from the date of these orders. The attention of the parties is drawn to s 81(7) of the

Strata Titles Act 1985

and s 87(1) of the

State Administrative Tribunal Act 2004

(WA) in this regard.

I certify that this and the preceding [181] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

___________________________________

DR B DE VILLIERS, MEMBER