Swift v The Owners of 5 & 7 Upton Place, Langford Strata Plan 38498
[2025] WASCA 30
•6 FEBRUARY 2025
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: SWIFT -v- THE OWNERS OF 5 & 7 UPTON PLACE, LANGFORD STRATA PLAN 38498 [2025] WASCA 30
CORAM: MITCHELL JA
ARCHER JA
SMITH AUJ
HEARD: 10 FEBRUARY 2025
DELIVERED : 28 FEBRUARY 2025
FILE NO/S: CACV 36 of 2024
BETWEEN: REBECCA GAYE SWIFT
Appellant
AND
THE OWNERS OF 5 & 7 UPTON PLACE, LANGFORD STRATA PLAN 38498
Respondent
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram: EGAN DCJ
Citation: THE OWNERS OF 5 & 7 UPTON PLACE, LANGFORD STRATA PLAN 38498 -v- SWIFT [2024] WADC 35
File Number : CIV 878 of 2021
Catchwords:
Whether a by‑law was validly passed - Special resolution of strata company - Statutory construction of s 3B of the Strata Titles Act 1985 (WA), since repealed
Legislation:
Strata Titles Act 1985 (WA) (repealed), s 3B
Result:
Appeal allowed
Category: B
Representation:
Counsel:
| Appellant | : | L A Warnick SC & P Monaco |
| Respondent | : | C S Gough |
Solicitors:
| Appellant | : | GV Lawyers |
| Respondent | : | McComish Legal |
Case(s) referred to in decision(s):
Australian Unity Property Ltd v City of Busselton [2018] WASCA 38; (2018) 237 LGERA 333
Taylor v The Owners - Strata Plan 11564 [2014] HCA 9; (2014) 253 CLR 531
The Owners of 5 & 7 Upton Place Langford Strata Plan 38498 and Swift [2020] WASAT 165
JUDGMENT OF THE COURT:
Overview
This appeal concerns the validity of a by‑law in a survey‑strata scheme. The strata company relied on the by‑law to recover a debt from a strata lot owner. The strata lot owner was the defendant at trial and is the appellant in this appeal.
The debt recovery by‑law was purportedly adopted by a special resolution passed at the strata company's annual general meeting in 2018. In 2018, s 42(2)(c) of the Strata Titles Act 1985 (WA) required the resolution to be passed as a 'special resolution'. At that time, s 3B of that Act set out the requirements for passing a special resolution at a general meeting. The appellant asserts that the trial judge erred in concluding that the special resolution had been validly passed in accordance with the requirements of s 3B of that Act.
The construction of s 3B is the sole issue in this appeal. That section relevantly provided that a special resolution will be passed if it is supported by votes having a value of not less than 50% of the aggregate unit entitlement of the lots in the scheme and of the proprietors of not less than 50% of the lots in the scheme.
Proprietors of only three of the nine lots in the scheme voted in favour of the special resolution to adopt the debt recovery by‑law. Therefore, the appellant submits, the special resolution was not validly passed in accordance with s 3B.
The respondent submits (and the trial judge found) that the terms 'proprietors' and 'aggregate unit entitlement' in s 3B should be understood by reference to the number of proprietors entitled to vote. The proprietors of at least three of the nine lots were not entitled to vote at the annual general meeting. Therefore, the respondent submits, the three votes in favour, out of the six available votes, were sufficient to pass the special resolution.
For the reasons that follow, we would allow the appeal.
Statutory context
The annual general meeting at which the debt recovery by‑law was purportedly adopted occurred on 20 November 2018. In these reasons, references to the 'Act' are references to the Strata Titles Act as it was at the time of the meeting. We will also refer to now‑repealed provisions in the present tense.
Power to make a debt recovery by‑law
Section 42(1) of the Act provides for a strata company to make by‑laws, not inconsistent with the Act, for 'its corporate affairs', any matter specified in sch 2A of the Act, and 'other matters relating to the management, control, use and enjoyment of the lots and any common property'.
Section 42B of the Act provides:
(1)By‑laws made by a strata company under section 42 may provide for a method of assessing contributions to be levied on proprietors under section 36 otherwise than in proportion to the unit entitlement of their respective lots.
(2)Such a by‑law may relate to contributions to all of the expenses of the strata company or to one or more particular kinds of expenses.
Section 36(1) of the Act requires a strata company to establish a fund for administrative expenses and, under s 36(1)(c), to raise amounts determined to be raised for the fund:
by levying contributions on proprietors -
(i)in proportion to the unit entitlements of their respective lots; or
(ii)where a by‑law referred to in section 42B … is in force, in accordance with that by‑law or order
Under s 36(4) of the Act, contributions levied under s 36 become due and payable to the strata company 'in accordance with the terms of the decision to make the levy'. They may be recovered by the strata company as a debt in a court of competent jurisdiction.
There does not appear to be any issue in this appeal that the debt recovery by‑law[1] is a by‑law of the kind that the strata company was authorised to make under the Act, or that it is capable of giving rise to a debt owed to the strata company by a proprietor. This might be accepted on the basis that the by‑law is characterised either as:
1.'relating to the management, control, use and enjoyment of the lots and any common property', within the meaning of s 42(1); or
2.providing for 'a method of assessing contributions to be levied on proprietors under section 36 otherwise than in proportion to the unit entitlement of their respective lots', within the meaning of s 42B(1) of the Act.
Method of making by‑laws
[1] Extracted in full below.
By s 42(2) of the Act, the provisions set out in sch 1 and sch 2 of the Act are deemed to be by‑laws of the strata company. It further provides that those by‑laws may be amended, repealed or added to by the strata company
(a)by resolution without dissent … in the case of Schedule 1 by‑laws; or
(b)in accordance with any order of a court or the State Administrative Tribunal or any written law; or
(c)in any other case, by special resolution.
Resolutions without dissent and special resolutions are defined in s 3AC and s 3B. They can only be passed at a duly convened general meeting of the strata company of which 'sufficient notice' (as defined by s 3C) has been given and at which a 'sufficient quorum' (as defined by s 3C) is present.
Section 3C provides that, for the purposes of s 3AC and s 3B, 'sufficient notice' of a meeting is given if at least 14 days' notice specifying the proposed resolution has been given.
More generally, by‑law 1 (5) (in sch 1 to the Act) provides:
Not less than 14 days' notice of every general meeting specifying the place, the date and the hour of meeting and in case of special business the general nature of that business, shall be given to all proprietors …, but accidental omission to give the notice to any proprietor … or non‑receipt of the notice by any proprietor … does not invalidate any proceedings at any such meeting.
Section 3C provides that, for the purposes of s 3AC and s 3B, there will be a 'sufficient quorum' if there are present at the meeting either personally or by proxy at the time when the resolution is voted on -
1.the proprietors of not less than 50% of the lots in the scheme; and
2.proprietors whose votes have a value of not less than 50% of the aggregate unit entitlement of the lots in the scheme;
This is different to the general quorum requirements. By‑law 12(2) and by‑law 12(3) (in sch 1 to the Act) provide that:
(2)Except as otherwise provided in these by‑laws, no business may be transacted at any general meeting unless a quorum of members is present at the time when the meeting proceeds to business.
(3)One half of the persons entitled to vote present in person or by duly appointed proxy constitutes a quorum.
By s 3AC of the Act, a 'resolution without dissent' is a resolution which is passed at a meeting and 'against which no vote is cast by a person entitled to exercise the powers of voting on the resolution conferred under' the Act.
Under s 3B(2) of the Act, a 'special resolution' is a resolution
1.supported by votes of persons entitled to exercise the powers of voting conferred by the Act:
(i)having a value of not less than 50% of the aggregate unit entitlement of the lots in the scheme; and
(ii)of the proprietors of not less than 50% of the lots in the scheme[,]
and
2.not voted against by votes of persons entitled to exercise the powers of voting conferred by the Act:
(i)having a value of 25% or more of the aggregate unit entitlement; or
(ii)of the proprietors of 25% or more of the lots in the scheme.
By‑law 12(6) - by‑law 12(8) (in sch 1 to the Act) make the following provision for passing resolutions at a meeting:
(6)Except where otherwise required by or under the Act, resolutions may be passed at a general meeting by a simple majority vote.
(7)At any general meeting a resolution by the vote of the meeting shall be decided on a show of hands unless a poll is demanded by any proprietor present in person or by proxy.
(8)Unless a poll be so demanded a declaration by the chairman that a resolution has on the show of hands been carried is conclusive evidence of the fact without proof of the number or proportion of votes recorded in favour of or against such resolution.
(emphasis added)
By‑law 14 (in sch 1 to the Act) provides for the votes of proprietors.
Under by‑law 14(1), on a show of hands each proprietor has one vote. However, under by‑law 14(7):
Co‑proprietors may vote by proxy jointly appointed by them and in the absence of such a proxy are not entitled to vote on a show of hands, except when the unanimous resolution of proprietors is required by the Act. (emphasis added)
Under by‑law 14(2), on a poll the proprietors have the same number of votes as the unit entitlements of their respective lots. By‑law 14(8) and by‑law 14(9) provide for proprietors or their proxy to have a vote on a poll proportionate to their interest in their strata lot.
By‑law 14(6) disentitles proprietors from voting on special resolutions if they owe the strata company money. It provides:[2]
Except in cases where by or under the Act a unanimous resolution[3] or a resolution without dissent is required, no proprietor is entitled to vote at any general meeting unless all contributions payable in respect of his lot have been duly paid and any other moneys recoverable under the Act by the strata company from him at the date of the notice given to proprietors of the meeting have been duly paid before the commencement of the meeting.
[2] See also s 3D.
[3] By s 3(1) of the Act, a 'unanimous resolution' is one which is passed unanimously at a meeting at which 'all persons entitled to exercise the powers of voting conferred under [the] Act are present and vote'.
The only provisions of sch 1, sch 2 and sch 2A which appear to relevantly relate to payments of charges by proprietors to the strata company is by‑law 1(1)(a) (in sch 1 to the Act) which provides that a proprietor shall 'pay all rates, taxes, charges, outgoings and assessments that may be payable in respect of' the proprietor's lot.
Provisions of the Act, including s 3B, allow for a proprietor who is not present at a meeting in person or by proxy to effectively indicate a vote in writing within 28 days after the meeting.
Section 42(2a) of the Act requires additional by‑laws to be classified as either a sch 1 by‑law or a sch 2 by‑law. It provides:
Each by‑law that is additional to the by‑laws in Schedules 1 and 2 or any amendment to a Schedule 1 or Schedule 2 by‑law shall be classified in the by‑laws as -
(a)a Schedule 1 by‑law; or
(b)a Schedule 2 by‑law.
(emphasis added)
Section 42(4) of the Act relevantly provides that no additional by‑law has effect until:
(a)the strata company has, not later than 3 months after the passing of the resolution for the amendment, repeal or additional by‑law, lodged a notice of the amendment, repeal or additional by‑law in the prescribed form with the Registrar of Titles …; and
(b)the Registrar of Titles has made a reference to the amendment, repeal or additional by‑law on the appropriate registered strata/survey strata plan.
Section 42(6) provides:
Without limiting the operation of any other provision of this Act, the by‑laws for the time being in force bind the strata company and the proprietors … to the same extent as if the by‑laws had been signed and sealed by the strata company and each proprietor … and as if they contained mutual covenants to observe and perform all the provisions of the by‑laws.
The above provisions, except for by‑law 1 in sch 1, were repealed on 1 May 2020 by operation of s 82 and s 97 of the Strata Titles Amendment Act 2018 (WA) and are no longer in force.
History of proceedings
The appellant is the proprietor of a residential lot at 5A Upton Place, Langford.[4] Relevantly, from September 2000 to April 2020, she was co‑proprietor of her lot with the State Housing Commission.[5] The appellant's lot is Lot 1 of Strata Plan 38498, a survey‑strata scheme comprising nine residential lots across 5 ‑ 7 Upton Place, Langford.[6]
[4] The Owners of 5 & 7 Upton Place, Langford Strata Plan 38498 v Swift [2024] WADC 35 (primary reasons) [67] ‑ [68].
[5] Primary reasons [69].
[6] Primary reasons [67] ‑ [68].
A dispute arose between the appellant and the strata company responsible for the scheme concerning a lemon‑scented gum tree growing on the appellant's lot.[7] Their dispute ultimately led to contested proceedings in the State Administrative Tribunal. On 31 December 2020, the Tribunal concluded that the appellant was in breach of the scheme by‑laws by allowing the gum tree's roots to damage common property and a neighbouring lot, and allowing its canopy to protrude into common airspace.[8] The Tribunal ordered that the gum tree be removed.
[7] Primary reasons [2] ‑ [4].
[8] The Owners of 5 & 7 Upton Place Langford Strata Plan 38498 and Swift [2020] WASAT 165[116].
On 16 March 2021, the strata company commenced proceedings in the District Court against the appellant claiming money and unpaid contributions associated with the Tribunal proceedings and the appellant's breaches of the scheme by‑laws.[9] The strata company made the claim under the debt recovery by-law, by‑law 16, which provides:
16.Debt Recovery
That the costs incurred by the Stata Company to recover fees and levies due under Section 36 of the Strata Titles Act (1985) or recovery of costs associated with a breach of by laws, insurance claims or excess or work carried out by the strata company, will be fully recoverable from the indebted lot owner. Costs include but are not limited to administrative fees charged to the Strata Company by the strata manager, legal fees incurred as a result of the failure to pay levies, or other costs and any other fees and charges applicable.
[9] Primary reasons [40].
By‑law 16 was purportedly adopted by a special resolution at the strata company's annual general meeting on 20 November 2018.[10]
[10] Primary reasons [17].
In the District Court proceedings, the appellant (then defendant) submitted, among other things, that by‑law 16 had not been validly passed at the meeting. She submitted that there were insufficient votes in support of the special resolution to meet the requirements of s 3B(2)(a). The strata company (then plaintiff) disputed this.
The trial judge found in favour of the strata company. The appellant appeals to this court on the sole ground that the trial judge erred in law by finding that the requirements of s 3B(2)(a) had been met and the special resolution had been validly passed.
Findings of primary fact
The trial judge made the following findings of primary fact.
The by‑laws that were in place prior to the meeting on 20 November 2018 were those contained in sch 1 and sch 2 of the Act.[11]
[11] Primary reasons [47], [79].
At least 14 days before the meeting, notices concerning the meeting were sent to all strata lot proprietors,[12] as required by the Act.
[12] See primary reasons [129], [206] and pages 43 ‑ 74 of the defendant's trial bundle, which formed part of exhibit 2 at trial (exhibit 2).
The proprietors of the lots (which each had one unit of entitlement[13]), their financial status as at the date of the meeting on 20 November 2018, and their attendance at the meeting, were as follows:
[13] See primary reasons [127]; appellant's submissions [6.2]; GAB 10 (which formed part of exhibit 1 at trial).
Lot
Proprietor[14]
Financial[15]
Present at meeting[16]
1
The appellant and the State Housing Commission (co‑proprietors)
Financial
The appellant was present in person although she held no proxy from the State Housing Commission (and the Commission itself was not represented at the AGM)
2
David Cherry
Financial
Present by proxy (held by Dean Cahill)
3
Michael and Lisa Joyce (co‑proprietors)
Financial
Present, although neither of them held a proxy from the other
4
Margaret Amito and Tokkene P'Batta (co‑proprietors, possibly with the State Housing Commission)
Both unfinancial
Absent
5
Kylie Stratton
Unfinancial
Absent
6
Annie Johnson
Unfinancial
Present by proxy (held by Dean Cahill)
7
Samantha Wallin
Financial
Present in person
8
Dean Cahill
Financial
Present in person
9
Daniel Worth
Financial
Absent
[14] Primary reasons [68] ‑ [69].
[15] Primary reasons [121(i)], [126], [127].
[16] Primary reasons [133] ‑ [134], [151].
Samantha Wallin (lot 7) and Dean Cahill (Lot 8) voted in favour of by‑law 16. Mr Cahill also cast a vote in favour as the proxy of David Cherry (lot 2).[17]
[17] Primary reasons [158].
The trial judge did not accept the appellant's evidence that she voted against the resolution adopting by‑law 16.[18] His Honour found that no proprietor was in dissent as to the adoption of by‑law 16.[19]
[18] Primary reasons [171].
[19] Primary reasons [174].
The trial judge does not appear to have made any positive finding as to whether the appellant, Michael Joyce or Lisa Joyce voted in favour of the resolution adopting by‑law 16. Similarly, he does not appear to have made a finding as to whether Mr Cahill purported to cast a vote as the proxy of Annie Johnson (although Ms Johnson was unfinancial and therefore not entitled to vote).
The trial judge does not appear to have made any express finding as to whether voting on the resolution to adopt by‑law 16 was by show of hands or by poll. However, a finding that voting was by show of hands is implicit in the following passage:[20]
[T]he parties ultimately accepted that Michael Joyce and Lisa Joyce (Lot 3) were unable to vote at the AGM as neither of them possessed a proxy from the other as required by Schedule 1 by‑law 14(7). In addition, and for the sake of completeness, the parties also accepted that the defendant did not have a proxy from the State Housing Commission, and the absence of that proxy also disentitled her to vote because of Schedule 1 by‑law 14(7).
[20] Primary reasons [146].
As noted above, by‑law 14(7) only excludes co‑proprietors from voting without a proxy where voting is by a show of hands. A further indication that the trial judge found that voting was by show of hands is that the evidence summarised by the trial judge, where it was specific, only referred to voting by a show of hands.[21]
[21] Primary reasons [130(k)] (summarising the evidence of Mr Cahill), [131(o)] (summarising the evidence of Ms Wallin). The summary of the evidence of the property manager Jocelyn O'Donnell at [129] and of the appellant at [132] is not specific as to whether the vote was by show of hands or poll.
The trial judge found that no proprietor who might have voted at the meeting provided a written notice as to whether they agreed or disagreed with the resolution adopting by‑law 16 within the 28‑day period provided for in the Act.[22]
[22] Primary reasons [162], [174].
The judge also found that, on 4 January 2019, Mr Cahill (lot 8) and the appellant (lot 1), as members of the Council of Owners, signed a form which set out the changes to the by‑laws pursuant to s 42 of the Act, and that form was submitted to Landgate.[23] Relevantly, the Landgate form states:[24]
The owners of 5 & 7 Upton Place Langford, Strata Plan No 38498 hereby certifies that by special resolution duly passed at a meeting of the strata company on 20 November 2018 which became unconditional on 18 December 2018 the by‑laws in Schedule 2 to the Act as they applied to the strata company, were added to, amended, or repealed as follows;
…
16.Debt Recovery
That the costs incurred by the Strata Company to recover fees and levies due under Section 36 of the Strata Titles Act (1985) or recovery of costs associated with a breach of bylaws, insurance claims or excess or work carried out by the strata company, will be fully recoverable from the indebted lot owner. Costs include but are not limited to administrative fees charged to the Strata Company by the strata manager, legal fees incurred as a result of the failure to pay levies, or other costs and any other fees and charges applicable. (emphasis added)
[23] Primary reasons [163].
[24] The trial judge set out an extract of that form at [163] but appears to have overlooked the first paragraph quoted above. The Landgate form is attachment JS‑07 to the affidavit of Jocelyn Grace O'Donnell filed 17 June 2021 (O'Donnell affidavit), 42. The O'Donnell affidavit formed part of the plaintiff's trial bundle, which was exhibit 1 at trial.
Although not entirely clear, the trial judge appears to have found that by‑law 16 was a sch 2 by‑law.[25] Therefore, it could be adopted by special resolution.[26]
[25] This is mostly clearly seen in the primary reasons [172]. See also [80], [90], [93] ‑ [95], [99] ‑ [100], [174].
[26] Primary reasons [99].
The trial judge found that there was a quorum at the meeting.[27] This finding was based on his Honour's construction of what was required to constitute a quorum. His Honour appeared to consider that by‑law 12(3) set out the requirements of a quorum.[28] That by‑law does not define what was required to constitute a quorum for the purposes of passing a special resolution. Those requirements are prescribed in s 3C. However, nothing turns on this, as the quorum requirements of s 3C were met.[29]
[27] Primary reasons [127], [133], [151] ‑ [152].
[28] See primary reasons [100] ‑ [103], [105] ‑ [107], [110] ‑ [111], [127], [152].
[29] The proprietors of five of the nine lots (lots 2, 3, 6, 7 and 8), and one of the two co‑proprietors of a sixth lot (the appellant, a co‑proprietor of lot 1), were present in person or by proxy. Their votes had a value of 5.5 unit entitlements, being more than 50% of the aggregate unit entitlements of 9. For those that were unfinancial, they would not be entitled to vote on a special resolution but would be entitled to vote where a unanimous resolution or a resolution without dissent was required (by-law 14(6)).
The trial judge also found that sufficient votes had been cast to pass by‑law 16 by special resolution. As noted, earlier, his Honour found that three votes (of Mr Cherry by proxy, Ms Wallin and Mr Cahill) were cast in support of the special resolution. The trial judge found that, whether the proprietors of four or six of the nine lots were entitled to vote, this meant that at least half of those entitled to vote had voted in support.[30] His Honour held that this met the requirement in s 3B(2)(a), due to his Honour's construction of that section.
[30] Primary reasons [158].
The trial judge further found that, even if he had been wrong in finding that by‑law 16 could be classed as a sch 2 by‑law, it would have been validly passed by a resolution without dissent under s 3AC. This was because he had found that no proprietor had cast a vote or purported to cast a vote against the resolution.[31]
[31] Primary reasons [174].
The trial judge held, therefore, that the strata company was entitled to recover the total debt claimed under by‑law 16.[32] His Honour ordered the appellant to pay the sum of $285,926.36.[33]
[32] Primary reasons [229].
[33] BAB 1.
The findings of fact establish the following:
1.Present at the meeting, in person or by proxy, were the proprietors of five of the lots (lots 2, 3, 6, 7 and 8), and one of the two co‑proprietors of a sixth lot (lot 1 - the appellant), out of a total of nine lots (which each had a unit entitlement of one, out of nine).
2.Therefore, present at the meeting, in person or by proxy, were the proprietors of not less than 50% of the lots in the scheme and whose votes had a value of not less than 50% of the aggregate unit entitlement of the lots in the scheme.
3.Therefore, there was a quorum for the purposes of passing a special resolution.
4.The proprietors of six of the lots were financial at the time of the meeting.
5.The proprietors of at least three of those six lots voted[34] in favour of the resolution.
6.No proprietor voted against the resolution.
[34] Or purported to vote. Mr Cahill was only entitled to vote once on a show of hands, so could not vote both for himself and on behalf of Mr Cherry.
Error by trial judge
At [127] of the primary reasons, the trial judge found that there would be a quorum at the meeting if three of the six financial proprietors were present at the meeting (relying, erroneously, on by-law 12(3)). At [154] of the primary reasons, the trial judge said:
It is clear from s 3B(2), s 3B(4), and s 3C(1)(b) of the [Strata Titles Act] that a special resolution is passed at a general meeting if 50% of those entitled to vote, vote in favour of the resolution.
At [158] of the primary reasons, the trial judge found that three financial members were present and voted in favour of the resolution to adopt by‑law 16. The trial judge then concluded at [159] of the primary reasons (adopting the respondent's construction):
Given my finding at [127] that only three of the six financial strata lot owners are required to pass a special resolution, and my finding at [158] above, I find that a special resolution concerning By‑law 16 was validly passed at the AGM.
It appears that his Honour intended to refer to [154] in this paragraph, instead of, or in addition to, [127]. Plainly, it would not be enough that a quorum was present. There would also need to be sufficient votes to meet the requirements of s 3B(2).
Section 3B(2)(a) requires that a special resolution be supported by votes having a value of not less than 50% of the aggregate unit entitlement of the lots in the scheme and of the proprietors of not less than 50% of the lots in the scheme. This required the proprietors of at least five lots in the scheme to vote in favour of the resolution.
In our view, s 3B(4) simply requires that the votes in support come from proprietors entitled to vote. It does not mean that proprietors disentitled to vote are not counted towards the aggregate unit entitlement or total number of lots in the scheme. In other words, although the proprietors of only six lots were entitled to vote on a special resolution, the aggregate unit entitlement (and total number of lots in the scheme) was still nine. Five votes still needed to be cast in support (from the six votes available) for a special resolution to pass. Having only three votes in favour was insufficient to pass a special resolution.
The effect of the respondent's argument in support of the trial judge's construction is to require s 3B(2)(a) to be read as meaning that, to pass a special resolution, it must be supported by votes of persons entitled to exercise the powers of voting conferred by the Act:
(i)having a value of not less than 50% of the aggregate unit entitlement of the lots in the scheme the proprietors of which are entitled to exercise the powers of voting; and
(ii)of the proprietors of not less than 50% of the lots in the scheme the proprietors of which are entitled to exercise the powers of voting [.]
We do not accept that construction for the following reasons.
First, this meaning is contrary to the very clear statutory language.
Second, that construction effectively requires words to be added to the statutory text in a way that is not consistent with the approach identified by the High Court in Taylor v The Owners - Strata Plan 11564.[35]
[35] Taylor v The Owners - Strata Plan 11564 [2014] HCA 9; (2014) 253 CLR 531, discussed in Australian Unity Property Ltd v City of Busselton [2018] WASCA 38; (2018) 237 LGERA 333 [86] ‑ [91].
Third, we do not accept the respondent's submission that the Act creates a 'hierarchy of degree of support' required of resolutions under the Act, with the requirements of a resolution without dissent being 'more stringent (i.e. more support required) than a special resolution'. A resolution without dissent does not require more support; rather it requires less (no) opposition. So, in the present case if the proprietors of five lots had attended the meeting and all were financial, a special resolution would only be passed if all of them voted in favour. However, the votes of three proprietors in support of the resolution would, in the absence of any votes against the resolution, be sufficient to pass a resolution without dissent. If all nine proprietors attended the meeting and all were financial, a vote of eight proprietors in favour and one vote against would be sufficient to pass a special resolution but insufficient to pass a resolution without dissent.
Fourth, and related to the illustrations just given, giving the statutory text its unambiguous meaning does not produce absurd results which Parliament could not have objectively intended. Regardless of how the majority support required is ascertained, there will be cases where votes sufficient to pass a resolution without dissent will be insufficient to pass a special resolution. That is because a simple majority of votes of eligible proprietors attending the meeting will pass a resolution without dissent so long as there are no votes against the resolution.
Consequences of error
Did the classification matter?
In its written submissions, the respondent submitted that whether by‑law 16 was supported by a special resolution is of no consequence. It submitted that the trial judge found that by‑law 16 could be classified as either a sch 1 or sch 2 by‑law, and that, even if it was classified as a sch 1 by‑law requiring a resolution without dissent, such a resolution had been achieved. It submitted that, therefore, the by‑law was validly passed, and it did not matter how it was classified.[36]
[36] WAB 13 ‑ 14 [6] ‑ [8].
We do not agree. If by‑law 16 was a sch 2 by‑law, it could only be passed by a special resolution.
Was it a sch 2 by‑law?
The respondent did not contend that by‑law 16 could not have been classified as a sch 2 by‑law. In any event, such a contention would have failed.
It will be recalled that by‑law 42(2a) provides that each by‑law that is added to the by‑laws 'shall be classified in the by‑laws as a Schedule 1 by‑law or a Schedule 2 by‑law'.
As we noted earlier, the trial judge's findings as to the proper classification were not entirely clear. However, he appears to have found that by‑law 16 could have been classified as either a sch 1 or a sch 2 by‑law, but was in fact classified as a sch 2 by‑law.[37] This appears to have been based on evidence that the manager of the strata company had proposed that it be a sch 2 by‑law, the Council of Owners had agreed, and the proposed by‑law was put on the agenda as one that required a special resolution.[38]
[37] Primary reasons [94] ‑ [95], [99].
[38] Primary reasons [95(d) ‑ (f)].
The notices that had been sent to all strata lot proprietors before the meeting contained, among other things, the agenda and a voting paper.[39] The voting paper listed 17 motions, and identified what type of resolution would be required to pass each motion.[40] The voting paper stated that proposed by‑law 16 required a special resolution.[41]
[39] Exhibit 2, 43 ‑ 74.
[40] Exhibit 2, 62 ‑ 74.
[41] Exhibit 2, motion 10, 64.
After the meeting, the Landgate form was submitted to Landgate. It relevantly stated that by‑law 16 and two other by‑laws had been added to sch 2.[42] It was common ground that such forms are placed on the register and the amendments to the by‑laws are noted on the registered plan.[43]
[42] The trial judge set out an extract of that form in [163] but appears to have overlooked the first paragraph quoted above. The Landgate form is attachment JS‑07 to the O'Donnell affidavit, 42.
[43] ts 11, 31, 33 ‑ 34.
In our view, the Landgate form compels the conclusion that by‑law 16 was, if validly passed, a sch 2 by‑law.
Discretion to deny relief?
During the hearing, the respondent contended that, even if the appellant established that by‑law 16 had not been validly passed, the court would have a discretion to refuse to make the orders sought by the appellant, as the by‑law was registered on the plan for the world at large.[44]
[44] ts 33.
The respondent appeared to be arguing that, just as the Transfer of Land Act 1893 (WA) confers indefeasibility of title on registered proprietors (subject to specific exceptions),[45] the registration of by‑laws should render the by‑laws immune to challenge.
[45] Transfer of Land Act 1893, s 68. See also s 134.
The respondent did not suggest that there was any provision in the Transfer of Land Act that could support its argument. Rather, it relied on provisions in the Act.
First, the respondent said that the discretion to refuse relief was given by s 97 of the Act.[46] That section deals with the powers of the State Administrative Tribunal, and has no application to these proceedings.
[46] ts 31 - 38.
Second, the respondent relied on s 42(4) of the Act, asserting that that section provides that a by‑law becomes effective upon registration.[47] That section does not so provide.
[47] ts 39.
Section 42(4) provides that no amendment or repeal of a by‑law or additional by‑law has effect until the strata company has lodged a notice of the amendment, repeal or additional by‑law with the Registrar of Titles, and the Registrar of Titles has made a reference to the amendment, repeal or additional by‑law on the appropriate registered strata or survey‑strata plan. That is, s 42(4) prevents a validly passed by‑law from taking effect until it has been noted on the plan. It does not purport to make an invalid by‑law valid once it has been noted on the plan.
Third, the respondent relied on s 42(6), which relevantly provides that the by‑laws for the time being in force bind the strata company and the proprietors. It submitted that the 'by‑laws … in force' meant the by‑laws as registered.[48]
[48] ts 40.
In our view, there is no basis to construe the plain words of s 42(6) in that way. The Act permits a strata company to add to the sch 1 by‑laws by resolution without dissent and to add to the sch 2 by‑laws by special resolution.[49] It provides that such resolutions will be passed only if specific conditions are met.[50] It further provides that no additional by‑law has effect until notice is given to the Registrar of Titles and the Registrar has made a reference to the additional by‑law on the registered plan.[51] The 'by‑laws … in force' are those that are contained in sch 1 and sch 2 of the Act as amended, repealed or added to by the strata company by resolutions passed in accordance with the requirements of the Act and that have been referred to on the registered plan.
[49] Section 42(2).
[50] Section 3AC, s 3AB, s 3C.
[51] Section 42(4).
It is noteworthy that there is a provision in the Act that, in essence, deems that a particular type of by‑law was validly passed:
1.Section 42(8) empowers a strata company, under certain conditions, to make a by‑law giving a proprietor exclusive or special privileges in relation to common property. Section 42(9) provides that, two years after such a by‑law is made or is purported to be made, it shall be conclusively presumed that all conditions and preliminary steps precedent to the making of the by‑law have been complied with and performed. There is no provision in the Act that offers any similar presumption for other types of by‑laws.
2.In addition, s 93 of the Act gives the State Administrative Tribunal the power to, among other things, declare that a by‑law is invalid if it is satisfied that the by‑law was made without power or was not made in accordance with the Act.[52] By s 93(5), this section does not apply to a by‑law made, or deemed to be made, under s 42(8).
This specific provision in relation to by-laws made under s 42(8) counts against the existence of any general objective legislative intention that by-laws passed otherwise than in accordance with the Act become valid on lodgement and registration of notice under s 42(4) of the Act.
[52] Section 93(2)(a), s 93(3)(a).
For completeness, we note that the respondent did not seek to rely on by‑law 12(8), which provides that 'a declaration by the chairman that a resolution has on the show of hands been carried is conclusive evidence of the fact'. Even if it did apply, the minutes of the meeting[53] would show, on their face, that there were (at most) three people who were entitled to vote in a show of hands at the meeting – the appellant, Ms Wallin and Mr Cahill:
1.The minutes recorded that present at the meeting were the appellant, Mr and Mrs Joyce, Ms Wallin and Mr Cahill.
2.The minutes also recorded that Mr Cherry was present by 'voting paper'.[54]
3.The minutes did not record that the appellant was a co‑proprietor. Therefore, although she could not vote on a show of hands, the minutes did not show that.
4.The minutes recorded that Mr and Mrs Joyce were co‑proprietors. The minutes did not record that they had appointed a proxy. Accordingly, on the face of the minutes, they could not vote. On a show of hands, co‑proprietors can only vote if they have jointly appointed a proxy.[55]
5.Mr Cahill could not vote twice on a show of hands. He could vote for himself[56] or for Mr Cherry.
[53] The minutes are attachment JS‑05 to the O'Donnell affidavit, 34 ‑ 39.
[54] The primary reasons [144] inaccurately set out the contents of the minutes and state that Mr Cherry was an apology.
[55] Schedule 1 by‑law 14(7).
[56] It is arguable that, on the face of the minutes, Mr Cahill could not vote for himself. Mr Cahill was recorded as unfinancial in the financial statements which were attached to the notice of the meeting (see exhibit 2, 51) and the minutes recorded that the financial statements were attached (see exhibit 2, 35), which presumably were the same statements as attached to the notice. However, regardless of whether Mr Cahill was financial at the time of the meeting, he could only vote once on a show of hands.
Even allowing for the fact that the minutes did not record that the appellant was not entitled to vote, the minutes show that no more than three proprietors could vote. It was therefore apparent, on the face of the record, that a special resolution could not have been passed.
Conclusion
For the above reasons, the following orders should be made:
1.The appeal is allowed.
2.The orders made by the District Court of Western Australia in CIV/878/2021 on 6 June 2024 are set aside and there is substituted an order that the plaintiff's claim is dismissed.
We would hear from the parties on the costs of the appeal and trial, which prima facie should follow the event.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
ADR
Associate to the Hon Justice Archer
28 FEBRUARY 2025
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