Stanley and Owners of Waterloo Heights Strata Plan 4192
[2009] WASAT 55
•30 MARCH 2009
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: COMMERCIAL & CIVIL
ACT: STRATA TITLES ACT 1985 (WA)
CITATION: STANLEY and OWNERS OF WATERLOO HEIGHTS STRATA PLAN 4192 [2009] WASAT 55
MEMBER: DR B DE VILLIERS (MEMBER)
HEARD: 17 MARCH 2009
DELIVERED : 30 MARCH 2009
FILE NO/S: CC 110 of 2009
BETWEEN: JASON STANLEY
Applicant
AND
OWNERS OF WATERLOO HEIGHTS STRATA PLAN 4192
Respondent
Catchwords:
Strata title Unreasonable refusal to improve or rectify common property Failure to enact an exclusive use bylaw Installation of an airconditioner When is refusal to do work on common property by installing an airconditioner unreasonable Adequate power supply to support airconditioner
Legislation:
Strata Titles Act 1985 (WA), s 35, w 42(8), s 51, s 79(2), s 85, s 94
Strata Titles Act 39 of 1966 (WA)
Result:
The application is dismissed
Category: B
Representation:
Counsel:
Applicant: Self-represented
Respondent: Self-represented
Solicitors:
Applicant: Self-represented
Respondent: Self-represented
Case(s) referred to in decision(s):
Burns and The Owners Of Observation Rise Strata Plan 24414 [2006] WASAT 17
Maber and The Owners Of Strata Plan 11391 [2007] WASAT 99 (S)
The Owners of Mandurah Terrace Apartments Strata Plan 17133 and Russell [2009] WASAT 1
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
The dispute concerned the refusal of the strata company to consent to a proposal by Mr Stanley to install an air‑conditioner to the common property balcony on the outside of his lot. A draft by‑law to authorise the installation failed to be approved by a resolution without dissent, although it received a majority of votes.
Mr Stanley contended that the consent to install the air‑conditioner had been withheld unreasonably by the strata company, since the heat experienced in his unit was unbearable in summer. He explained that he had considered other options, such as portable air‑conditioners, but none of those would serve the required purpose.
A draft resolution for an exclusive use by-law for the installation of air‑conditioners was put to the Annual General Meeting of the strata company on 14 January 2009. It failed to be approved as a resolution without dissent. A majority of the owners supported the resolution, but four owners voted against it.
The main concerns raised during the hearing against the installation of an air‑conditioner related to the disposal of excess water, the cost to link the air‑conditioner with existing common property pipes and maintenance thereof, and the ability of the electricity supply of the scheme to sustain additional drainage on sources of power.
The Tribunal emphasised that the underlying principle of management and control of common property according to the Strata Titles Act 1985 (WA) is that each proprietor has an undivided share in common property and that owners must consent to alterations to such common property before it may occur.
The strong protection of a proprietor's right of refusal to allow works on common property is, however, limited by the provisions of s 85 of the Strata Titles Act 1985 (WA), which give the Tribunal an oversight of the merit of any refusal to allow works on common property.
The Strata Titles Act 1985 (WA), through s 85, provides that the Tribunal can override a refusal by a strata company to consent to certain works on common property if the Tribunal considers that an application to effect alterations to common property or to repair common property has been refused 'unreasonably'.
The Tribunal explained to Mr Stanley during the directions hearing that other options may be at his disposal to pursue the matter. He could firstly lodge an application with the District Court pursuant to s 51 of the Strata Titles Act 1985 (WA) for a by‑law to be registered, since the draft by‑law that was put to the Annual General Meeting received a majority of votes. Secondly, he could contend, pursuant to s 94 of the Strata Titles Act 1985 (WA), that his lot was 'incapable of reasonable use and enjoyment' due to the absence of an air‑conditioner. Mr Stanley considered the options and decided to pursue the application in accordance with s 85 of the Strata Titles Act 1985 (WA).
The Tribunal found that the application had to be dismissed on two grounds. Firstly, the Tribunal cannot provide a remedy if an exclusive use by‑law fails to be approved by a resolution without dissent. Secondly, the Tribunal found that the refusal by the strata company to consent to the proposal by Mr Stanley was not unreasonable. The main concern raised by those who voted against the proposal was that the electrical supply to the building would not be able to sustain the installation of air‑conditioners. The owners who objected to the installation obtained a report from an electrician in support of their concern. Mr Stanley rejected the electrician's report, but he failed to address the concern by calling in an expert in support of his contention.
The Tribunal is therefore satisfied that the strata company, which has to manage and control common property with the interests of all proprietors in mind, did not act unreasonably by refusing the application.
Issue
The issue in dispute is whether the refusal of the strata company to enact a draft by‑law for the installation of air‑conditioners by means of a resolution without dissent, was unreasonable.
Background
The application was lodged on 22 January 2009, pursuant to s 85 of the Strata Titles Act 1985 (WA) (ST Act). Mr Stanley contended that the strata company had unreasonably refused his application to install an air‑conditioner on the common property balcony outside his unit.
A directions hearing was held on 29 January 2009, at which programming orders were made for the matter to be heard. At the directions hearing, the Tribunal explained to Mr Stanley the options he had available for the dispute to be determined. Those options were:
•s 51 of the ST Act whereby, in certain circumstances, the District Court may make a by-law if it failed to be approved by a resolution without dissent by a general meeting;
•s 94 of the ST Act, whereby he could contend that his lot was not capable of reasonable use without the air‑conditioner; and
•s 85 of the ST Act, where he could contend that the strata company unreasonably refused an alteration to common property.
Mr Stanley was given a week to decide if he wanted to amend his application to bring it under a section other than s 85 of the ST Act or to lodge an application with the District Court. After consideration, he confirmed that he wanted to pursue the matter under s 85 of the ST Act.
The Tribunal also made orders for the application, and programming orders to be served on the strata company and on the persons referred to in s 79(2) of the ST Act. The strata company and other notified persons were given an opportunity to make submissions in regard to the application. No submission was received from the strata council. This is most unfortunate, since the strata council, which has a duty to manage and control common property on behalf of all owners, could be expected to make a submission in proceedings of this nature. Only one other proprietor, Ms Anne Drake, made a written submission. Two proprietors, Mr Adrianus Eppen and Ms Katherina Sweetman, made written submissions and also gave oral evidence.
The hearing took place on 17 March 2009. Mr Stanley was present and so were Mr Eppen and Ms Sweetman. The strata council did not send a representative. Mr Stanley indicated that he is a member of the council of owners, but that he was acting in his personal capacity, since he lodged the application. He did not explain why the strata council had not made a submission or why it was not represented at the hearing.
The strata scheme is located at No 38 ‑ 42 Waterloo Crescent, East Perth. It is a multi‑level, six‑storey complex that comprises 42 lots. Each lot has one unit entitlement. The average size of the lots is 45 square metres. The scheme was registered pursuant to the Strata Titles Act 39 of 1966 (WA). It is agreed that the balconies are common property.
Mr Stanley is the proprietor of Lot 42 (Unit 66) on the sixth floor of the scheme.
Draft conditions if approval were given
At the directions hearing which was held on 29 January 2009, the Tribunal gave Mr Stanley an opportunity to propose draft specifications and conditions to which the air-conditioner would have to comply, should the Tribunal find in his favour. The reason for inviting the specifications was that, if the Tribunal were to find that approval had been refused unreasonably, the Tribunal would have to make such orders to which the air-conditioner had to comply.
In his submission dated 8 March 2009, Mr Stanley provided detailed specification and conditions to which the air-conditioner had to comply. A copy of the submission was provided to the respondent.
Statutory framework
The application is brought under s 85 of the ST Act, which provides as follows:
Where, pursuant to an application by a proprietor for an order under this section, the State Administrative Tribunal considers that the strata company for the scheme to which the application relates has unreasonably refused to consent to a proposal by that proprietor ‑
(a)to effect alterations to the common property; or
(b)to have carried out repairs to any damage to the common property or any other property of the strata company,
it may make an order that the strata company consent to the proposal.
There is no dispute that part of the proposed air-conditioner would be erected on common property. The strata company considered a draft by‑law to approve the installation of air‑conditioners, and it failed to be approved by a resolution without dissent.
Submissions by the parties
Submissions were received from:
•Mr Stanley;
Ms Anne Drake (proprietor of Unit 25);
•Mr David Thornely (proprietor of Unit 56);
•Ms Katherine Sweetman (proprietor of Unit 33 and Unit 62 and part‑owner of Unit 64); and
•Mr Adrianus Eppen (part‑owner of Unit 64).
Ms Sweetman and Mr Eppen also submitted a report from Allday Electrical Service (Allday Electrical) about the power supply of the scheme.
The submissions and evidence of the parties can be summarised as follows:
Mr Stanley contends that the summer temperature in his unit becomes unbearable, since it faces east and is exposed to the morning sun until about noon. The roof of the building is flat and, according to him, not well insulated. As a result, there is severe heat build up in his unit. According to him, the other units do not suffer similar problems because they are at the lower levels and have the insulation of the upper apartments to shield them from heat. He has considered portable air‑conditioners, but those are not able to serve the unit properly. He said although the unit is small (45 square metres), the portable air‑conditioners would not suffice. The draft conditions and specifications he proposed would ensure that an air‑conditioner of high quality is installed, with reduced noise, and water discharge would be properly managed. He further contended that in modern days it is completely reasonable to expect to install an air‑conditioner. He rejects the suggestion that the scheme's power supply would not be able to handle additional drainage. He also questions the veracity of the report by the electrician, and said that a 'proper' report would have cost much more to draft. He stresses further that his unit should be treated as a special case due to its location, and that there is no reason why all the other units would want to install air-conditioners since they are much cooler.
Mr Eppen and Ms Sweetman contended that they also own a unit on the top floor and it is not excessively hot. They acknowledge that the unit faces south, but also say that the unit has a large, western facing window which is exposed to the afternoon sun. They contend that a movable or portable air conditioner could be equally effective. They are particularly concerned that the power supply of such an aged building may not be able to cope with the demand of air‑conditioners. They paid from their own resources to obtain a report from an electrician, which cautioned against the installation of an air‑conditioner before the electrical supply is upgraded. They contend that the strata company cannot consider the application of Mr Stanley in isolation from the possibility other units may also want to install air‑conditioners as the total demand may then exceed the supply. The strata company must therefore first conduct a proper analysis of the power supply to determine what upgrades, if any, need to be done. There are, in any case, other urgent maintenance issues in the scheme that ought to take precedence before an upgrade to the electrical supply.
Ms Drake also raises concerns about the age of the building and the adequacy of the electricity supply. She says that she had spoken to the person who had installed the security system at the scheme some time ago and she was told that the power supply would be inadequate for the installation of air‑conditioners. She did not provide a statement of the person. She also raised concerns about the excess water run-off and how it would be managed.
Mr Thornely says his unit is directly below that of Mr Stanley, and his tenant has also complained about the heat. He would therefore also like to install an air-conditioner if approval is granted to Mr Stanley. Mr Thornely only submitted a short letter and did not give further evidence.
Allday Electrical explains in its report dated 19 February 2009 that the electrical supply of the scheme allows 7.14 amps per unit without house power allowance. The sub‑mains to each floor is 10 millimetre 40 amps divided by six units equalling 6.6 amps per unit. The air‑conditioning unit proposed by Mr Stanley would not be in excess of 10 amps. The report finds that:
to install air‑conditioners to each unit would add approximately 7 ‑ 80 amps per phase if all are used at the same time. In conclusion[,] major upgrading to the undergrounds mains and rising sub[‑] mains would need to be done before any air‑conditioners were installed. Main board and sub[‑]boards would also need some upgrading to accommodate extra equipment required.
Consideration: has approval been unreasonably withheld?
The proposed by‑law failed to be endorsed by a resolution without dissent at the Annual General Meeting that took place on 14 January 2009. In these proceedings, Mr Stanley seemed to have confused the provisions of s 51 and s 85 of the ST Act. On the one hand, he is referring to the failure to approve a by‑law, which brings the matter under s 51 of the ST Act, while on the other hand, he refers to 'unreasonable refusal' by the strata company, which brings it under s 85 of the ST Act. The appropriate course of action ought to have been to seek relief from the District Court pursuant to s 51 of the ST Act.
The Tribunal will, nevertheless, for the sake of clarity, address the application under each of the sections.
Section 51 of the ST Act
The Tribunal will first deal with Mr Stanley's contention that the proposed by‑law has been unreasonably refused.
The Tribunal explained to Mr Stanley that, if a by‑law that requires a resolution without dissent is necessary before any act may be done but that resolution is not obtained but the resolution is supported to the extent necessary for a special resolution, the District Court may make an order that deems that a resolution without dissent had been obtained. There is no requirement for a test of 'unreasonableness' under s 51 of the ST Act. If he wishes to pursue the contention that the draft by‑law had been refused unreasonably, the appropriate course of action would be to follow s 51 of the ST Act.
The Tribunal does not have the power to grant any relief in the case where a by‑law which requires a resolution without dissent had been refused ‑ regardless of the contention by Mr Stanley that the refusal was unreasonable. The proposed by‑laws were categorised by Mr Stanley as by‑laws that would provide for exclusive use rights over common property for the installation and regulation of air‑conditioners. As such, s 51 of the ST Act contains the remedy, if any.
Mr Stanley has confused the two options that were at his disposal, namely:
(a)to put to the strata company a proposed exclusive use by‑law which requires a resolution without dissent. If the by‑law was rejected, the appropriate remedy is found in s 51 of the ST Act; or
(b)to put to the strata company a proposal for a licence to install the air‑conditioner which requires an ordinary majority. If the licence was refused, the appropriate remedy is found in s 85 or s 94 of the ST Act.
The Tribunal finds that Mr Stanley's application is misconstrued. He proposed to the strata company an exclusive use by‑law, and when it failed to be approved by a resolution without dissent (even though it obtained a majority vote), he sought a review of the decision as if a mere licence had been sought. He must either pursue the failure of the draft by‑law under s 51 of the ST Act or seek approval for a licence, and if it fails, lodge an application pursuant to s 85 or s 94 of the ST Act.
Section 85 of the ST Act
The Tribunal will next deal with the question of whether the refusal of the strata company was 'unreasonable' within the context of s 85 of the ST Act.
In considering the reasonableness of the refusal by the strata company to approve Mr Stanley's application (which was submitted in the form of a draft exclusive use by‑law), the Tribunal must take into account the interests of Mr Stanley and the other owners. It is ideal for the interests to be harmonised but that is not always possible.
Mr Stanley contends that the situation of his lot is unique and that it must therefore be treated as exceptional compared to the interests of the other proprietors. The Tribunal does not accept the contention. The strata company is entitled to take into account the interests of all proprietors when an application to alter common property is considered. If Mr Stanley were of the view that his lot was incapable of being used without the air‑conditioner, an application should have been lodged pursuant to s 94 of the ST Act. The Tribunal drew this to the attention of Mr Stanley but, after consideration, he decided to pursue the matter under s 85 of the ST Act.
The ST Act recognises that each proprietor has an undivided share, in proportion to its lot entitlement, in common property. Being an owner of common property, each proprietor is entitled to be involved in any decision affecting the common property. Hence the requirement of the ST Act that a resolution without dissent be passed before certain acts may occur.
Although the common property balcony is attached to the lot of Mr Stanley, the other owners have an interest therein ‑ especially when it comes to the possible implications to the rest of the scheme, and more particularly the power supply to the scheme.
The involvement of owners in matters affecting common property can be affected through various means, for example:
•consideration of a budget and raising of levies for general control and management of common property (s 35 of the ST Act);
•an application for an exclusive use by‑law (s 42(8) of the ST Act);
•relief where resolution without dissent is required (s 51 of the ST Act);
•an application for a licence to use common property for a certain purpose (s 94 of the ST Act); and
•an application to alter common property (s 85 of the ST Act).
Section 85 of the ST Act empowers the Tribunal to consider the reasons for refusal of the strata company to allow alterations to common property and to determine whether such reasons were unreasonable. The Tribunal must as a general principle be cautious and slow to intervene in the way in which proprietors manage a strata company and make decisions regarding the use of common property. All proprietors own common property and they have the right to deal with it and to manage it in accordance to their discretion and interests. The strata company has autonomy to make decisions in a manner that it believes serve the interests of the scheme. At the same time, however, Parliament clothed the Tribunal with the power to consider the merit of a refusal of a strata company when it comes to making alterations to common property, in order to protect an individual proprietor against the unreasonable refusal by a strata company.
The ST Act does not define what is meant by 'unreasonable'. The Macquarie Concise Dictionary (Revised Third Edition, Macquarie University, 2004) defines 'unreasonable' as 'not agreeable to or willing to listen to reason' and 'not based on or in accordance with reason or sound judgement'. The mere fact that the Tribunal may disagree with a decision of a strata company, or that the Tribunal may have come to another conclusion, does not, in itself, mean the decision of the strata company can be termed 'unreasonable'. If the decision is based on sound judgment and is taking proper account of all the facts, the Tribunal would be hesitant to impose its views on a strata company.
In the matter of Maber and The Owners Of Strata Plan 11391 [2007] WASAT 99 (S), at [26], the Tribunal made the following observation in regard to what constitutes 'unreasonable refusal'.
There is no guidance under the ST Act as to what amounts to unreasonable refusal. All lot owners have a proprietary interest in common property as tenants in common. There is a requirement under s 35(1)(b) of the ST Act that common property be managed for the benefit of all proprietors. What amounts to unreasonable refusal will depend on the facts of each case. It must, however, be judged in its legislative context ... Therefore, as long as the reasons for refusal by the respondent are cogent when judged in this context, this Tribunal should be slow to find there has been an unreasonable refusal. (Tribunal emphasis)
In the matter of Burns and The Owners Of Observation Rise Strata Plan 24414 [2006] WASAT 17 , at [34] ‑ [35], the Tribunal found that a strata company had unreasonably refused permission for an air‑conditioner to be installed. The Tribunal observed as follows:
The impact that the air‑conditioner the subject of this application would have on the external appearance of the complex is far less intrusive than the unbearable heat and discomfort that Ms Burns has to suffer in her apartment. Perth is known for the harshness of its summers and in particular the build‑up of heat in rooms that face the glaring afternoon sun. It is generally accepted that rooms along the coast that face in a westerly direction require some form of air‑conditioning to make them habitable.
The Tribunal finds that the refusal of the strata company and the seven proprietors to approve the application to install an air‑conditioner was unreasonable. It is completely reasonable for Ms Burns to be given approval to install an air‑conditioner in an attempt to ameliorate the impact of the heat on the bedroom.
In the matter of The Owners of Mandurah Terrace Apartments Strata Plan 17133 and Russell [2009] WASAT 1, the Tribunal upheld the refusal of the strata company to refuse approval to install an air‑conditioner. The Tribunal summarised its review powers as follows:
The State Administrative Tribunal outlined the consistent approach taken in considering such applications that the management of a strata company be left to the strata company and that the State Administrative Tribunal should not too readily impose its own views of what is unreasonable. It was necessary to balance interests and views in order to reach a subjective view of whether a decision is unreasonable. It was stated that if the balance is delicately poised it will not be possible to conclude that the decision is unreasonable because it is possible for persons acting reasonably to come to opposite conclusions on the same set of facts. The task was for the State Administrative Tribunal to assess whether there was good sense or logic to support the dissenting view. [4] (Tribunal emphasis)
The test for the Tribunal to apply is not merely if it may come to a different conclusion in regard to the same facts. It is obvious that many decisions are made within strata schemes where an external person may come to a different conclusion. But having a difference of opinion is not sufficient to overrule the decision of a strata company on the ground of 'unreasonableness'.
The Tribunal must apply a more stringent test, namely, that it must be satisfied that the refusal of the strata company was 'unreasonable'.
In these proceedings, both parties explained their respective positions. Although the strata council unfortunately did not make any submission and did not participate in the proceedings, some proprietors made their views known.
The Tribunal finds that the rationale given by those who oppose the installation of the air-conditioner cannot be classified as 'unreasonable'. The Tribunal makes this finding for the following reasons:
(a)Mr Stanley failed to provide evidence as to why a portable air-conditioner would not be able to cool down a relatively small unit of 45 square metres. Although he contended that portable air‑conditioners would not be effective, he did not present any evidence in support of his view.
(b)Mr Stanley contended that his neighbour also complained about the heat, but the neighbour did not give evidence, nor did he provide a statement to the Tribunal. Although the Tribunal accepts that a top‑level unit may be prone to heat build‑up, the Tribunal is not satisfied that Mr Stanley has shown that all other alternatives have been attempted.
(c)The report by Allday Electrical raises concerns about the ability of the existing power supply to service the installation of air‑conditioners. Although Mr Stanley contends that his unit is unique, the draft by‑law allows, in principle, that other units may also seek to install air‑conditioners.
(d)Although Mr Stanley rejects the Allday Electrical report, he did not call any expert evidence to support his contention that the electrical supply was adequate, nor did he call an expert to challenge the Allday Electrical report.
(e)The Tribunal does not accept Mr Stanley's objection to the report on the grounds that it only cost $220 to draft and that it is therefore not up to standard. It is the only evidence before the Tribunal of a technical nature that provides insight into the electrical supply to the scheme. The objectors took a cautious approach and the Tribunal, on the basis of the evidence before it, cannot make a finding that they acted unreasonably. The Tribunal finds it extraordinary that the strata council chose not to participate in these proceedings and that it further failed to commission an expert report to advise it on the quality of electrical supply before the resolution was put to the Annual General Meeting.
(f)Although Mr Stanley attempted to clothe the application as being only for his unit, the draft by-laws that were rejected clearly dealt with the options that other units could also install air‑conditioners. If he was of the view that his unit is unique and that his unit could not be enjoyed without the air‑conditioner, he should have brought the application pursuant to s 94 of the ST Act.
The Tribunal therefore finds that the strata company did not act unreasonably when it refused approval for the air‑conditioner to be installed.
Conclusion
On the basis of the above finding, the application for relief pursuant to s 85 of the ST Act is dismissed.
Order
The application is dismissed.
I certify that this and the preceding [53] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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DR B DE VILLIERS, MEMBER
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