Reid v DaCRUZ - [1999] WADC 117

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: REID -v- DaCRUZ & ORS [1999] WADC 117

CORAM: WISBEY DCJ

HEARD: 5 NOVEMBER 1999

DELIVERED : 12 NOVEMBER 1999

FILE NO/S: CIVO 127 of 1998

MATTER :IN THE MATTER of the Strata Titles Act 1985 (WA)

BETWEEN: ROBERT STUART REID
Plaintiff
AND
A N M DaCRUZ
M L DOUST
M C B CAMPBELL
J L MORLEY
S G MORLEY
PETER O WALLER
URSULA KONIG
A M SHARP
J LAING
CHARLES H SUFFOLK
P J WILLIAMS
L J A JEFFREYS
J P CRANEY
S HARRISON
M AITKIN
J R BERRY
Defendants

Catchwords:

Land - Strata titles - Resolution to acquire common property - Application for order where resolution without dissent cannot be obtained

Legislation:

Strata Titles Act 1985 (WA) s18(1), s51

Result:

Application granted

Representation:

Counsel:

Plaintiff: In Person
Defendants: Mr P O Waller

Solicitors:

Plaintiff: In Person
Defendants: Peter Owen Waller

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

McHattie v Tuscan Investments Pty Ltd (1997) 18 SR (WA) 231

Case(s) also cited:

Nil

WISBEY DCJ: By originating summons filed 18 May 1998 the plaintiff, Robert Stuart Reid, (hereinafter referred to as Reid) a proprietor of a strata unit the subject of Tranby on Swan Strata Plan 2232, seeks on behalf of a majority of unit holders an order under s51 of the Strata Titles Act 1985 (the Act) that resolution 3(1) of the Extraordinary General Meeting of the strata company concluded on 14 October 1997 be deemed to have been passed as a resolution without dissent. There are 17 named unit holders as defendants to the summons.
By order in chambers made 8 June 1998 it was directed, pursuant to s129(2) of the Act, that service of the application on all persons, other than the defendants, who were entitled to vote but did not vote in favour of the resolution, be dispensed with; and that service of the originating summons together with the supporting affidavits of Richard Stanley McEntee sworn 8 April 1998, of Reid sworn 18 May 1998, and a copy of the order, be served on each of the defendants. It was further ordered that any defendant who wished to appear must file and serve a notice of appearance.
In respect of service it is to be noted that s51(2) of the Act requires that a notice of the application be served on every person who was entitled to exercise the power of voting conferred under the Act and did not, either in person or by proxy, vote in favour of the resolution. Notwithstanding Williams DCJ took the view that s129(2) which reads: "Notice of an application to the District Court under this Act shall be served on such persons as the District Court thinks fit, or the Court may dispense with notice" enabled the Court to dispense with notice on some or all of those who would otherwise require to be served pursuant to s51; and he exercised the power in the manner aforesaid. Whilst the issue is not free from doubt, I am required to follow the order relating to service, and in reality the matter is academic since it is clear from the papers, and from submissions made on the hearing, that the controversy the subject of this application and the application have been the subject of considerable agitation at Tranby on Swan, and it is extremely unlikely that there are any proprietors who are unaware of this application.
In an affidavit sworn 14 July 1998 Ruth Margaret Geneff, the chairperson of Tranby on Swan Strata Plan 2232, confirmed service in accordance with the order referred to upon the named defendants Doust, Waller, Konig, Laing, Suffolk, Williams, Jeffreys, Craney, Aitkin and Berry, between 1 and 12 July 1998.
In an affidavit sworn 1 August 1998 Lesley Norma Reid confirmed service on the defendant DaCruz on 13 July 1998, and deposed to the fact that the defendant Sharp had left her residence without leaving a forwarding address. In those circumstances pursuant to s129(2) I dispense with service of notice of application upon Sharp.
As at 26 March 1999 the remaining defendants unserved were Ms Campbell, Mr and Mrs Morley and Mr Harrison, and by order made 26 March 1999 her Honour Deane DCJ gave directions in respect to service thereof.
By affidavit sworn 12 April 1999 Reid confirmed having left service documents at the address of Mr and Mrs Morley being 103 Young Street, Harvey, and I am prepared to declare that as being appropriate service.
By affidavit sworn 5 November 1999 Ruth Margaret Geneff deposed to having delivered the requisite documents for Mrs Campbell to Ursula Konig who has acted as agent for Mrs Campbell in respect of matters related to her unit holding, and I am prepared to declare that appropriate service. She also deposed to having contacted Mr Harrison and in accordance with his direction forwarded the requisite documents to his post office box. I am prepared to declare that as being appropriate service.
In all the circumstances I am satisfied that the necessary service requirements have been met, and that all persons affected by this application are aware of its existence and precise nature. I therefore turn to the merits of the application.
In the supporting affidavit of Richard Stanley McEntee sworn 8 April 1998 he deposed relevantly to the following facts:
1.Strata Plan 2232 relates to the strata title development known as Tranby on Swan which comprises 206 strata lots, most of which are located in a number of four level brick residential buildings. Twelve lots, known as "the river houses", are situated in double storey terrace buildings.
2.Pergolas erected and gardens constructed and maintained on the riverside of the river houses were thought to be on or part of the common property, but in truth encroached upon a Crown reserve for public recreation under the control of the City of Stirling. Clearly that is untenable and the City of Stirling requires that the situation be regularised either by the strata company eliminating the encroachment or purchasing the strip of land the subject of the encroachment. Somewhat remarkably, having regard to the fact that the subject land has an area of 1,150sq m and is prime river front land, the City of Stirling is prepared to convey it to the strata company as and by way of common property for the sum of $3,000, the strata company meeting all costs associated with the conveyance. The total cost when allocated between all the proprietors is minimal.
3.An extraordinary general meeting of the strata company was called on 3 September 1997 to consider, inter alia, the motion referred to in the originating summons which was in the following form:
"That the owners of Tranby on Swan Strata Plan 2232 acquire from the Crown the land shown on Crossland and Hardy Plan 98/96 at a cost not to exceed $3,000 and the land so acquired be included in the common property of Strata Plan 2232 subject to the following:
(a)That the owners of Tranby on Swan Strata Plan 2232 be authorised to give an undertaking not to erect any additional structure or improvement or fencing on the land so acquired; and
(b)That the owners of Tranby on Swan Strata Plan 2232 grant, pursuant to s20 of the Strata Titles Act 1985 an easement over the land so acquired for the purpose of a sewer drain;
(c)The Council members be authorised to affix the seal of the strata company to any documentation necessary to give effect to the transfer, the undertaking and the easement and they be authorised to do all other such things as are necessary to perfect these transactions."
4.The meeting commenced on 3 September and was adjourned to 14 October when the motion was debated and voted upon. 24,355 unit entitlements comprising 64.45% of the entitlements, supported the motion, and 2,690 unit entitlements comprising 7.34% of the unit entitlements voted against it. Although the motion clearly had majority support s18 of the Act required that there be a resolution without dissent, and in the result the motion was lost.
Section 18(1) relevantly provides that:
"A strata company may, pursuant to a resolution without dissent accept a transfer or lease of land which is part of, or contiguous to, the parcel and is not subject to a mortgage, charge or other encumbrance, for the purpose of creating, or creating additional, common property."
Peter Owen Waller is the only defendant to file documentation in opposition to the application, and he also appeared on the hearing, although it is reasonable to suppose that he was "carrying the flag" for the defendants. In his affidavit sworn 12 April 1999 he comprehensively reviews the history of this matter. He confirms that an extraordinary general meeting was called for 3 September 1997 to deal with, inter alia, the aforesaid motion, and that the meeting was adjourned until 14 October 1997 when the motion was put but lost because it was not passed without dissent as required by s18(1) of the Act. It is clear from Mr Waller's affidavit, however, that he does not dispute that there was a majority in favour of the motion, and there is in my view nothing in his affidavit, or in the other papers before me, to suggest that the meeting was not validly held in accordance with the requirements of the Act.
Although Mr Waller has expressed concern regarding the manner in which the meeting was called, and the motion dealt with, I am of the view that his concern, though genuine, is illusionary. Corroboration for that view was the singular lack of opposition to the application.
The resolution having therefore been validly passed by majority, although subject to dissent, the issue for determination is whether it is proper for the Court to exercise the discretion vested in it by s51 of the Act and declare that the resolution be deemed to have been passed as a resolution without dissent.
In McHattie v Tuscan Investments Pty Ltd (1997) 18 SR (WA) 231 I set out what I consider to be some of the factors that are required to be taken into account in exercising the discretion, and I now address those factors with reference to this application:
(a)The extent of the majority in favour of the resolution - A substantial number of proprietors voted in favour of the resolution or declined to vote against it;
(b)The benefit to the proprietors, occasioned by the resolution - The benefit to the proprietors in the particular circumstances is patent, and indeed in his argument before me Mr Waller quite properly acknowledged that to be the case;
(c)The detriment to the proprietors generally, both immediately and prospectively, by the resolution - Apart from an immediate obligation to make a relatively insignificant financial contribution, it is difficult to identify detriment flowing to any of the proprietors, and again that fact was acknowledged by Mr Waller;
(d)Any detriment flowing particularly to any proprietor, and more particularly to any proprietor opposing the resolution - Mr Waller was unable to articulate any particular detriment flowing to himself or any other proprietor opposing the resolution, and clearly the actions contemplated by the resolution do not derogate from any proprietor's proprietary rights.
I am not in the slightest doubt that the acquisition of the land concerned will be of substantial benefit to the strata company generally, and to the proprietors in particular, and I therefore declare that the resolution to achieve that objective be deemed to have been passed without dissent.
It is appropriate to acknowledge the assistance provided to the Court by the applicant Mr Reid and by Mr Waller representing the defendants, and particularly the clarity objectivity and genuineness of their submissions.