THE OWNERS OF 216 BARKER ROAD, SUBIACO, STRATA PLAN 8596 and STIRLING BRASS FOUNDERS (WA) PTY LTD - [2011] WASAT 161

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: STRATA TITLES ACT 1985 (WA)

CITATION: THE OWNERS OF 216 BARKER ROAD, SUBIACO, STRATA PLAN 8596 and STIRLING BRASS FOUNDERS (WA) PTY LTD [2011] WASAT 161

MEMBER: MS C WALLACE (MEMBER)

HEARD: DETERMINED ON THE DOCUMENTS

DELIVERED : 13 OCTOBER 2011

FILE NO/S: CC 579 of 2011

BETWEEN: THE OWNERS OF 216 BARKER ROAD, SUBIACO, STRATA PLAN 8596
Applicant
AND
STIRLING BRASS FOUNDERS (WA) PTY LTD
Respondent

Catchwords:

Strata Titles Construction of juliette balcony Alteration to lot without strata approval Whether structure will not cause any significant inconvenience or detriment for purposes of s 103G(4) of Strata Titles Act 1985 (WA) Interrelationship between s 7(5) and S 103G(4) of Strata Titles Act 1985 (WA) - Strata corporate governance

Legislation:

Strata Titles Act 1985 (WA), s 7, s 7A, s 7B, s 11, s 12, s 103G
Strata Titles General Regulations 1996 (WA), reg 34

Result:

Application successful
Order pursuant to s 103G(3)(b) made

Category: B

Representation:

Counsel:

Applicant: Self-represented
Respondent: Mr M Bowen

Solicitors:

Applicant: Self-represented
Respondent: Hardy Bowen

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

Hamilton v Thompson (1999) 23 SR (WA) 41
The Owners of The Views, Strata Plan 6669 and Larralee Pty Ltd [2006] WASAT 126)
Uta Pty Ltd v Celenza & Anor [2002] WASCA 360

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

Stirling Brass Founders (WA) Pty Ltd caused a juliette balcony to be erected on its strata lot. Approval without dissent by the other strata lot proprietors was not provided to the respondent and it was alleged that the works constituted a breach of s 7 of the Strata Titles Act 1985 (WA).
The Owners of 216 Barker Road, Subiaco, Strata Plan 8596 sought an order pursuant to s 103G of the Strata Titles Act 1985 (WA) that the balcony be removed, while the respondent sought an order pursuant to s 103G(4)(b) that the balcony be allowed to remain, given that it does not constitute a significant inconvenience or detriment.
Having considered the matter, the Tribunal found that there is an interrelationship between s 7(5)(b) and s 103G(4)(b) of the Strata Titles Act 1995 (WA) such that the factors which can be taken into account as grounds upon which approval or works may be refused remain persuasive considerations when determining inconvenience and/or detriment.
In addition, the Tribunal looked at issues such as financial detriment to lot proprietors, potential weakening of strata corporate governance and matters related to quiet enjoyment of strata lots.
The Tribunal found that the juliette balcony had and would continue to cause a significant inconvenience and/or detriment because it lacked conformity with the general appearance of the building, created issues of privacy which may devalue other strata lots and that to allow the structure to remain would negatively impact upon strata corporate governance and responsibility.

Background

This application concerns a two storey residential strata scheme, comprising five strata lots, each with a ground and first floor, at No 216 Barker Road, Subiaco, Strata Plan 8596 (the site). The applicant is the strata company, being represented by Mr Peter Lutley, the owner of unit 4. The respondent is the corporate vehicle through which Mr Howard Haselhurst owns strata unit 3. Mr Haselhurst's daughter resides at that premises.
During the course of 2005 Mr Haselhurst was considering undertaking a number of renovations to his strata unit. He obtained plans which included the construction of a proposed juliette balcony within the boundaries of his lot. The history of how this proposal was first raised with the other strata lot proprietors and how it was dealt with is important and will therefore be dealt with in some detail later.
An Annual General Meeting of the then lot proprietors at the site was held on 15 March 2005. The approved minutes of that meeting were filed in these proceedings. Although the meeting minutes do not refer to, as an agenda item, the intention of the respondent to erect a balcony, it appears that there may have been some casual discussion between Mr Haselhurst and one or two of the other lot proprietors following the conclusion of that meeting. However, if it occurred, such discussion was of an informal nature and no documentation in relation to what was proposed was provided (in addition to the meeting minutes dated 15 March 2005, I also refer in this regard to the email from Mr Timothy Brice addressed to Mr Lutley dated 22 November 2005 and an email from Ms Sharon Hookway to Mr Lutley dated 8 January 2011 filed with the Tribunal).
On 4 November 2005 the strata lot proprietors received notice from the City of Subiaco that it had received an application from the respondent for the development of a rear balcony at strata unit 3 which invited the proprietors to view plans of the proposal and to provide comments in relation to the issue of privacy.
A submission was sent to the City of Subiaco dated 15 November 2005 prepared by Mrs Lutley, the joint proprietor of unit 4, opposing the proposed application for development primarily on two bases:
1)that privacy would be compromised even with the proposed screen surrounding the balcony which would affect 'living value' and the rental and resale value of their property; and
2)the balcony would result in an increase in noise affecting the use of the courtyard of unit 3 positioned underneath where it was intended that the balcony would be built.
On 8 December 2005, the City of Subiaco determined to give building approval for the balcony proposed by the respondent on the condition that it have a permanent screen on three sides with a visually impermeable and fixed material to a minimum height of 1.6 metres above the finished floor level.
A further Annual General Meeting of the lot proprietors took place on 8 March 2006. In attendance at that time were the proprietors for lots 1, 3 and 4. At this meeting, for the first time, a formal discussion took place in relation to the proposed construction of a juliette balcony by the respondent. The meeting minutes of that Annual General Meeting note that the proprietor of unit 4 objected to the construction but that Mr Haselhurst advised that the City of Subiaco had already given building approval to proceed. Despite the minutes noting that Mr Haselhurst had received Council approval, they go on to state that s 7 and s 7B of the Strata Titles Act 1985 (WA) (the Act) needed to be adhered to and a copy of those sections were attached to the meeting minutes and distributed to all proprietors.
What followed after the conclusion of the 2006 Annual General Meeting was a series of correspondence exchanged between Mr Lutley and Mr Haselhurst (that correspondence includes the following: a letter from Mr Lutley to the respondent dated 29 March 2006; an email from Mr Haselhurst to Mr Lutley dated 1 June 2006; an email from Mr Lutley to Mr Haselhurst dated 26 June 2006; an email from Mr Haselhurst to Mr Lutley dated 14 July 2006; letters from Mr Lutley to Mr Haselhurst dated 7 September 2006 and 31 October 2006; and an email from Mr Haselhurst to Mr Lutley dated 31 October 2006).
In that correspondence Mr Lutley formally raised his objection to the construction of the proposed balcony and expressed his concern that the relevant provisions of the Act and its accompanying regulations, being the Strata Titles General Regulations 1996 (WA) (the Regulations), had not been complied with and putting the respondent on notice that if it were to proceed with the construction of the balcony that Mr Lutley may appeal for relief to the State Administrative Tribunal (Tribunal). From a review and consideration of the exchange of correspondence it appears to the Tribunal that Mr Haselhurst was under a misapprehension at that time in two respects: first, he appeared to believe that he had approval from the strata lot proprietors for the construction of the balcony despite not formally seeking approval pursuant to the relevant provisions of the Act and its Regulations; and, secondly, that the City of Subiaco had advised him that he did not need to obtain approval from the strata body and thus he was proceeding on that advice.
This train of correspondence exchanged between Mr Lutley and Mr Haselhurst in the second half of 2006 culminated in the calling of an Extraordinary General Meeting of the owners of the site on 27 November 2006 for the purpose of discussing further the construction of the balcony at unit 3. Importantly, the agenda for that meeting set out in their entirety s 7A and s 7B of the Act. At that meeting there was attendance on behalf of units 1, 3, 4 and 5. The meeting was chaired by Ms Fiona Duffy, representing Blackburn Real Estate, being the strata manager at that time. The meeting minutes record that the respondent had not at any time requested that the construction of the juliette balcony to unit 3 be part of the agenda for previous meetings, that the two previous minutes of meetings did not refer to the construction, and a resolution was made that permission be formally requested by the respondent for its construction. It was further recorded in the meeting minutes that after unit 3 had officially submitted a formal written request for approval together with plans of the proposed juliette balcony, another extraordinary meeting would be called to formally object to its construction.
Following this meeting the strata manager sent an email to Mr Haselhurst dated 4 January 2007 informing him of the need to prepare the formal request to all proprietors and that in doing so he would need to pay particular reference to s 34 of the Regulations and s 7 and s 7B of the Act 'as they have specific instructions on what is required'. The strata manager advised Mr Haselhurst to seek legal advice on the manner in which the approval request letter was to be drafted.
It appears that works in relation to constructing the juliette balcony at unit 3 occurred during January 2008 and, on the basis of the respondent's evidence, 90% of the work associated with building the balcony had been undertaken by midlate February 2008 (reference in this regard is made to para 14 of Mr Haselhurst's witness statement dated 27 July 2011).
It appears that the then strata manager for the strata complex, Ms Margaret Coots of Perth Management Services, was informed of these works which resulted in Ms Coots sending a letter to Mr Haselhurst dated 23 January 2008. In the body of that letter Ms Coots reminded Mr Haselhurst that he had no permission or formal agreement from the strata company to construct a juliette balcony and that such permission was required under s 7A and s 7B of the Act in addition to the building permission required from the City of Subiaco. The letter requested Mr Haselhurst's cooperation in submitting the written request together with plans and specifications to the strata company as resolved at the Extraordinary Meeting held on 27 November 2006. The letter also required Mr Haselhurst to cease any further works in regards to the installation of the balcony. Following receipt of the 23 January 2008 letter Mr Haselhurst purported to seek formal permission for the construction of the juliette balcony by letter to Ms Coots dated 5 February 2008 and attaching plans.
Although the construction of the balcony at unit 3 was a special business item listed in the meeting minutes of the following Annual General Meeting held on 19 February 2008, it was recorded that it was not the subject of a formal application in accordance with s 7B of the Act and the Regulations and therefore it was agreed by those proprietors present that the item could not be properly addressed at the meeting. It therefore appears that the strata manager and the lot proprietors did not accept Mr Haselhurst's letter of 5 February 2008 and the enclosed plans as satisfying the requirements set out in s 7B of the Act and s 34 of the Regulations.
A further Extraordinary General Meeting was held on 15 November 2010. The meeting was called with the specific purpose of discussing the construction of the juliette balcony at unit 3. The meeting minutes note that Mr Haselhurst was asked to provide the current plans for the balcony for consideration of all strata lot owners following which the owners would provide in writing to Mr Haselhurst their approval or disapproval for its construction. The meeting minutes record that Mr Haselhurst would not provide plans as he believed it would evidence an admission by him that he had not previously obtained the correct permission from the owners to build the balcony which would, in his view, prejudice his legal position. Mr Haselhurst is again recorded as stating that it was his belief that he had obtained verbal permission from the other lot proprietors for the construction of the balcony and that he had presented plans some years previously. It was agreed by the lot proprietors that, in any event, even if plans were offered at this stage, that unanimous approval from the proprietors would not be provided and that consideration would be given to seeking relief from the Tribunal.
The respondent then proceeded and completed the construction of the juliette balcony. Photographs depicting the completed balcony have been filed with the Tribunal by both parties. It is positioned on the exterior of the western upper level of unit 3; is steel framed with a red brick coloured mesh screen enclosing it at the front and sides.

Issues

The applicant filed an application with the Tribunal on 10 May 2011 pursuant to s 103G of the Act for an order or finding relating to a breach of s 7(2) of the Act that the proprietor of unit 3 constructed a juliette balcony without approval from the other strata lot proprietors and that it be ordered to remove the unauthorised balcony within 60 days and restore that part of the building to its former condition. The respondent accepts that it did not obtain formal approval or comply with s 7(2) of the Act before constructing the juliette balcony on the upper level of unit 3 but states that the order sought by the applicant should not be made given the exclusionary element of s 103G(4)(e) of the Act that the work done will not cause any significant inconvenience or detriment to the other strata lot proprietors. Section 103G of the Act provides:
(1)An application to the State Administrative Tribunal for a finding and an order under this section may be made
(a)by the proprietor of a lot in a two-lot scheme; or
(b)in the case of any other scheme, by the strata company.
(2)a finding under this section is a finding that the proprietor of a lot in the scheme has committed a breach of section 7(2).
(3)An order under this section is an order that the proprietor
(a)stop carrying out any work or any specified work in breach of subsection (2) of section 7; or
(b)within a specified time, pull down, remove, or alter anything or any specified thing that is in place as a result of work done in breach of that subsection;
or an order under both of those paragraphs.
(4)On the making of an application under subsection (1), the State Administrative Tribunal shall
(a)make a finding under this section if satisfied that a breach of section 7(2) has occurred;
(b)make an order under this section unless satisfied that the work done or intended to be done will not cause any significant inconvenience or detriment to the other proprietors.
Based on the background facts set out earlier and given that the respondent gave an admission in this respect, it is accepted that the respondent failed to comply with the requirements set out in s 7(2) of the Act, that prior approval, expressed by resolution without dissent of the strata company be obtained before structural alterations were commenced. Clearly, therefore, there has been a breach of s 7(2) of the Act in the circumstances.
That leaves the question to be determined as to whether an order should be made requiring the respondent to remove the balcony which has been erected in breach of s 7(2) of the Act or whether, pursuant to s 103G(4)(b) of the Act, there should be a finding that the work done has not and will not cause any significant inconvenience or detriment to the other strata lot proprietors. If such a finding is made, it is open to the Tribunal pursuant to that subsection to refuse to make the order sought by the applicant and to allow the structure to remain.
This question raises a number of interrelated issues which should be considered together. They are:
1)the meaning which should be attributed to the words 'significant inconvenience or detriment';
2)the interrelationship, if any, between the concept set out in (1) above and the grounds on which proprietors are entitled to object to a proposal as set out in s 7(5) of the Act (which are effectively by-passed by s 103G(4)(e)); and
3)what, if any, additional factors are relevant in determining whether a matter falls within the exclusionary criteria of s 103G(4)(b) of the Act.

Consideration of issues

The usual course when a proprietor of a strata lot wishes to cause or permit an alteration of a structural kind to, or extension of, a structure to his lot, is to obtain prior approval without dissent of the strata company (s 7(2) of the Act). The grounds on which approval may be rejected are set out in s 7(5) of the Act. This procedural requirement prescribed by the Act is to ensure that, inter alia, structural works, alterations, additions and the like are not undertaken which may affect the structural soundness of a building, are visually not in keeping with the commonality of the general appearance of a strata complex, or interfere with easements. This legislative approval mechanism is intended to protect the rights and interests of all proprietors in a scheme.
Section 103G(4) of the Act comes into play where s 7 has been breached and the lot proprietor may, nevertheless, not be required to remove/restore the works which resulted in that breach. This allows the Tribunal to therefore exercise a discretion in otherwise finding in favour of the strata company by acknowledging that the works, although done without approval without dissent by the other lot proprietors, will not cause any significant inconvenience or detriment to them.
However, the concept introduced in that section must be fashioned or influenced by the grounds of refusal set out in s 7 of the Act (see: The Owners of The Views, Strata Plan 6669 and Larralee Pty Ltd [2006] WASAT 126 at [15]). In approaching the consideration of s 103G(4) of the Act without due regard to s 7, or in isolation, would, in effect, encourage strata lot proprietors to bypass the prescribed approval process in that section and, in effect, attempt to 'get in the back door'. Such approaches must be discouraged and it should be emphasised that the two sections are interrelated such that if the grounds for refusal of the proposal are evident pursuant to s 7 of the Act and are such that the presence of those factors are likely to cause a significant inconvenience or detriment, they are persuasive.
I turn to the meaning which should be attributed to the words 'significant inconvenience or detriment'. The law in this regard is well settled and the words should be given their natural meaning (see: Hamilton v Thompson (1999) 23 SR (WA) 41 at [50] [51] which was cited with approval in Uta Pty Ltd v Celenza & Anor [2002] WASCA 360). 'Inconvenience' necessitates a disadvantage and connotes something that is troublesome and impedes prosperity. 'Detriment' is ordinarily defined as damage, loss, harm, prejudice or a disadvantage. Section 103G of the Act refers to 'significant' and therefore the inconvenience or detriment cannot be immaterial or of no import; it must be material and of consequence.

The question therefore to be determined is whether the juliette balcony which has been constructed by the respondent has and will continue to cause any significant inconvenience or detriment to the other strata lot proprietors. Some of the factors deemed relevant to this consideration include the following:
1)Whether the alteration/works/addition is not in keeping with the rest of the development such that a significant inconvenience or detriment is suffered by the strata lot proprietors. For example, the works create an eyesore, create an unkempt or untidy appearance, degradate from the commonality, harmonious or high standard presentation of the building such that it may result in a diminution of property values.
2)Whether the alterations/works/addition may affect the structural soundness of the building. If this risk is established on the evidence it cannot be a question of degree as in most, if not all cases, it would as a matter of course result in a significant detriment being suffered by the strata lot proprietors.
3)Whether the alteration/works/addition may interfere with any easement created by s 11 or s 12 of the Act. For the purposes of s 103G(4) of the Act the interference would need to be significant or material.
4)Whether the circumstances surrounding the decision to carry on the works in question has the effect of undermining the corporate governance of the strata lot and/or constitutes a deliberate and knowing abandonment of the requirements of the Act and Regulations/bylaws such that it sets a precedent that any strata proprietor may act in a similar manner with disregard of the legislative regime.
5)Whether the alteration/works/addition will result in a significant interference with the quiet enjoyment of the strata lot of any other proprietor or of the common property. Although this is not a reason upon which the works could be refused pursuant to s 7 of the Act, this is an issue which squarely falls within consideration of what constitutes a 'significant inconvenience'. Therefore, if there is evidence of a material interference with the quiet enjoyment of a proprietor's lot or the common property as a result of the works which materially impedes their ability to use or enjoy that property (including the ability to rent or sell the premises), then those factors should be considered as part of this determination.
6)Whether the alteration/works/addition would result in financial detriment to another strata lot proprietor either by the devaluing of their property, the strata complex in its entirety or by restricting the use of common property (it should be noted that this factor overlaps with the others referred to above).
The above list is not intended to be exhaustive, but illustrative only. In addition, the above list evidences that there remains an interrelationship between the operation of s 7 and s 103G(4) of the Act.
The evidence filed in this matter raises the relevant considerations listed in paras 1, 4, 5, and 6 above in determining whether the Tribunal should decline to make the order sought by the applicant because it is satisfied that the balcony erected by the respondent will not cause any significant inconvenience or detriment to the other proprietors. The Tribunal will deal with each of those areas of consideration in turn.

The appearance of the balcony

The appearance of the balcony and the asserted lack of commonality with the presentation of the building is an issue raised by all of the other proprietors of the site. In the written statements filed by the proprietors they gave evidence that the appearance of the balcony is inconsistent with the general presentation of the rest of the building; it protrudes out from the wall whereas the original pre-existing balconies are flush with the main walls; it is overhanging rather than inbuilt; has an aesthetically displeasing boxlike appearance, with aluminium frames and a red surrounding screen (whereas the other balconies are mainly constructed of cream wood beams); it is plainly visible from the outside of the site; and is an unsightly eyesore (being a highly imposing and intrusive structure). The other proprietors state that as a result the balcony will reduce the value of their properties and thus cause a significant detriment.
In response to these concerns, Mr Haselhurst on behalf of the respondent, said that the balcony is not an eyesore in that its colours blend with the red brick appearance of the building and that the aluminium frame can be painted the same brickred colour. Mr Haselhurst stated that although the balcony is visual, it is only visual from the back and side of the building and not from the main entry to the building from Barker Road. Mr Haselhurst also submitted that aesthetics alone are, in any event, not sufficient to evidence a material inconvenience or detriment.
In the Tribunal's view, the balcony does appear to lack commonality with the rest of the building. It protrudes in a boxlike manner and the steel frames and enclosed screening draw attention to it which would not perhaps be the case if it was built-in or constructed of different material. However, this of itself may be insufficient to illustrate or evidence a material inconvenience or detriment to the other lot proprietors.

Corporate governance of the strata lot

There appears to have been, as is clear from the detailed background facts set out above, some confusion on the part of the respondent as to whether the balcony had strata council approval in the early days. This seems to have occurred due to some ignorance on the respondent's behalf as to the requirements of s 7 of the Act and of s 34 of the Regulations, possible incorrect information having been received from the City of Subiaco, and informal passing comments with one or two proprietors in 2005.
However, the respondent would most certainly have been aware of the necessity for approval from all other proprietors and of the legislative regime contained in s 7 of the Act by 8 March 2006, as this matter was squarely raised at the Annual General Meeting which took place on that day. Indeed the agenda for the meeting attached copies of s 7A and s 7B of the Act in their entirety. Again, on 27 November 2006 at an Extraordinary General Meeting, the meeting minutes record that it was decided that:
… [u]nit 3 was to officially submit written approval to proceed with the additions to his unit … [o]nce this has been received by the strata manager the owners will then officially call another extraordinary meeting to formally object to the construction. It was then mentioned by Mr Haselhurst that [once] this decision has been made he can then proceed with an application to the State Administrative Tribunal for a hearing to appeal the decision by the owners.
Thus it is clear that by at least 27 November 2006, if not before, the respondent had notice of the requirements of the Act and that the other strata lot proprietors objected to the erecting of the juliette balcony. This position was further clarified with the respondent on 4 January 2007 by email to him from the then strata manager. Despite this, the respondent appears not to have obtained legal advice nor to follow the legislative regime and proceeded to undertake the works associated with erecting the balcony. This resulted in the strata manager sending the respondent a letter on 23 January 2008 informing him that he required permission and to cease works.
The works appeared to have been ceased temporarily, but even so, according to Mr Haselhurst's witness statement dated 27 July 2011, the works were 90% completed by this time. At no time does it appear that Mr Haselhurst attempted to familiarise himself with the formal requirements of the relevant sections of the Act and Regulations and works were conducted despite being informed on a number of occasions that the respondent required formal approval which it did not have.
Much concern has been raised by the other strata lot proprietors in relation to this issue. Mr Lutley (lot 4), Mr and Mrs Brice (lot 2), Mr Weinbauer (the then owner of lot 5), and Mr and Mrs Finch (lot 1) have raised in their witness statements filed in these proceedings their concerns as to the lack of regard evidenced by Mr Haselhurst in undertaking the works without adherence to the legislative regime in circumstances where he knew there was strong opposition to the construction of the juliette balcony. As Mr Lutley states in para 23 of his witness statement dated 24 July 2011:
The Strata Titles Act and its Regulations and Schedule 1 and 2 By-Laws are fundamental to the due processes and procedures and the rights and protection and [sic] of all parties in Strata Title matters. By the respondent not following due process and not abiding by this Act[,] I contend that this has been a great detriment to owners and neighbours confidence in the Act and its ByLaws … [i]f the balcony is allowed to remain, the owners would, I suggest, rightly question the validity of their rights in regard to future Strata Title matters …
Mr and Mrs Brice echoed the same concerns in their statement dated 25 July 2011 in stating that if the respondent was not held accountable:
… then feasibly any owner could do the same thing. This would send a message to all owners … that there is no point [in] having or abiding by strata or council bylaws.
Mr and Mrs Finch state in their witness statement dated 25 July 2011 that the respondent:
… failing to follow appropriate procedure before constructing the balcony and knowingly acting against the wishes of other unit owners has created an extraordinary precedent. By extension, any wishes of unit owners can be overridden without consequence, unless the balcony is removed.
The respondent's position in relation to this issue is that there was some '… uncertainty amongst the other lot owners and the then current strata manager as to the operation of the Act and the Strata Titles Regulations and insistence upon compliance with their technical formality' and asserted a '… failure to consider the plans at the annual general meeting of 19 February 2008' (para 16 of the witness statement of Mr Haselhurst dated 27 July 2011).
The documentary evidence filed in this matter does not support the respondent's position in this regard. There did not appear to be confusion by the other lot proprietors and/or the then strata manager; to the contrary, they seemed well aware of the requirements of the Act and Regulations and clearly set them out in the agenda for the Extraordinary Meeting on 27 November 2006 as well as incorporating them into the agenda for the earlier March 2006 Annual General Meeting. The apparent confusion appeared to be on the part of Mr Haselhurst and his reluctance to accept the need for compliance to the requirements of the Act and Regulations. It appears that Mr Haselhurst's frustration with this process prompted his desire to go ahead with building the juliette balcony despite not having satisfied those requirements and despite clear opposition from the other lot proprietors.
In such circumstances, the other lot proprietors have rightly raised concerns that to allow such action sets an unfortunate precedent and may encourage others at the strata complex to ignore the regime set out in the Act and Regulations. Although s 103G(4) of the Act allows consideration of hardship which will be suffered by the respondent where structural works which have already been built and are required to be pulled down, the Tribunal must also ensure that by so acting, the corporate governance of the strata is not undermined. The Tribunal remains concerned with any evidence of a lack of regard which leads to an abandonment of the legislative regime which exists in order to protect the rights and interests of all strata lot owners. Although the facts of this case do not establish a complete abandonment of the relevant law, they do support a finding of reckless indifference to the regime. In such circumstances, to allow the balcony to remain may set an unfortunate precedent to other proprietors and encourage an attitude of indifference to the requirements of s 7 of the Act.

Significant interference with quiet enjoyment and use of a strata lot

A material detriment has been asserted by the other strata lot owners due to the presence of the balcony, in particular by the owners of units 3 and 4. The proprietors of unit 4 have given evidence, as has their tenant, that, the balcony interferes with the quiet enjoyment of the courtyard of unit 4 given that it looks directly into that courtyard and has resulted in an increase in noise level. The tenant, Ms Ellis, has said in her witness statement dated 24 July 2011 that she does not use the courtyard as much as she had previously and may reconsider her living arrangements as a result of the interference of her privacy in using that area.
Certainly it must be accepted that a balcony which overlooks a courtyard and thus reduces the private and quiet enjoyment of that space has a very real potential of materially affecting the owner's ability to rent (or rent at a price previously rented in the absence of the balcony) and/or sell at a particular price. The owners of unit 3 have raised the same privacy issues in the statement filed by them dated 25 July 2011 in that the balcony constructed by the respondent looks into their ground floor courtyard. They are similarly concerned that the impact will lead to a reduction in the value of their property. Although the City of Subiaco was not swayed by the submission it received in relation to privacy concerns, that matter is not decisive of this issue nor does it bind the Tribunal in any finding it may make in relation to this matter.
Mr Haselhurst has stated in relation to this issue that the balcony has been built with screening to remedy and address any privacy issues. However, I accept that the screening is transparent and also accept the evidence of Ms Ellis that the sides of the balcony can be looked over and that she can hear discussions of people taking place on the balcony. The screening certainly does not deal with the noise issue and also does not appear to deal with the issue of people on the balcony being able to look through it or over it into the courtyards of units 3 and 4.
Whilst privacy per se may not necessarily constitute a significant detriment or inconvenience, it can result in a financial disadvantage being suffered and thus in those circumstances can be significant or material. In this regard I accept the evidence of Ms Ellis that the lack of privacy may result in her choosing to rent premises elsewhere and therefore raises a real issue as to the ability to lease or lease at an appropriate rental amount in respect of unit 3 and unit 4.

Conclusion

For the reasons set out above, the Tribunal is satisfied that the construction of the juliette balcony by the respondent has and will continue to cause significant inconvenience and/or detriment to the other strata unit proprietors. In this regard the Tribunal finds that the decision to build the balcony without approval without dissent, and the existence of that structure has resulted in:
1)A lack of commonality with the appearance of the rest of the building;
2)An undermining of the corporate governance of the strata lot; and
3)An interference with the quiet enjoyment and use of other lots which may affect the ability to rent or sell those premises at the same value as prior to the existence of the balcony.
Although the respondent has submitted in para 30 of its submissions dated 5 September 2011 that it is open to the Tribunal to make orders effectively allowing the balcony to remain with conditions imposing alterations, this is not a position accepted by the Tribunal. The Tribunal must proceed to deal with a matter based on the material facts put before it. It cannot deal with hypothetical proposals. The proposal contained in para 30 of the respondent’s closing submissions was not one ever put before the applicant for approval, nor before Council for its approval at any relevant time. It is hypothetical in nature and cannot be the subject of consideration by this Tribunal. It remains therefore the finding of the Tribunal that the juliette balcony constructed by the respondent must be removed as it poses a significant inconvenience and/or detriment to the other proprietors at the site.

Orders

The orders of the Tribunal are:
1.The application is successful.
2.Pursuant to s 103G(1) and s 103G(3)(b) of the Strata Titles Act 1985 (WA), the respondent is to remove the unauthorised juliette balcony constructed on the exterior of the first floor of Lot 3 on Strata Plan 8596 within 90 days of the date of this order and is to restore that part of the building to its former condition.

I certify that this and the preceding [52] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MS C WALLACE, MEMBER