THE OWNERS OF FRESHWATER STRATA PLAN 634548 and CHEN

[2017] WASAT 120

THE OWNERS OF FRESHWATER STRATA PLAN 634548 and CHEN [2017] WASAT 120

Jurisdiction:	STATE ADMINISTRATIVE TRIBUNAL	Citation No:	[2017] WASAT 120
Act:	STRATA TITLES ACT 1985 (WA)
Case No:	CC:1668/2016	Heard:	29 AUGUST 2017
Coram:	DR B DE VILLIERS (MEMBER)	Delivered:	12/09/17
No of pages:	18	Judgment Part:	1 of 1
Result:	Orders made for signage to be removed and penalty imposed for breach of by­law
Category:	B
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Parties:	THE OWNERS OF FRESHWATER STRATA PLAN 634548 YIN CHEN ADDSTYLE CONSTRUCTIONS PTY LTD
Catchwords:	Strata title Common property Discretion of strata company to consider and approve signage on a common property window Considerations to take into account to act 'reasonably' Relevance of approval granted by local authority Meaning of 'in the vicinity' Interpretation of by-laws according to principles of statutory contracts Imposing a penalty for breach of a by-law
Legislation:	Strata Titles Act 1985 (WA), s 35, s 35(1), s 42A, s 83, s 83(1), s 103I, Sch 1, Sch 2
Case References:	Ainsworth v Albrecht [2016] HCA 40 Byrne v The Owners of Ceresa River Apartments Strata Plan 55597 [2016] WASC 153 Noranda Australia Ltd v Lachlan Resources NL (1988) 14 NSWLR 1 Taj Coffee Company Pty Ltd and Plaza Arcade [2009] WASAT 107
Orders	1. The application succeeds.,2. The second respondent shall by not later than 1 November 2017 remove the unauthorised signage at Lot 73 and make good any damage that may have been caused to common property.,3. The first respondent shall take the necessary steps to ensure that the second respondent complies with order 2.,4. A penalty of $500 is imposed on the first respondent for the breach that has occurred of Schedule 1 By-Law 23. The penalty shall be paid by not later than 1 October 2017.
Summary	This dispute is about the second respondent having erected signage on the common property window of the lot of which it is a tenant.  The commercial office lot which is leased by the second respondent, forms part of the mixed use strata scheme where there are 70 residential apartments and 10 commercial office suites.,The applicant says that the strata company had to give approval for the signage prior to it being erected; that the applicant had not given approval; that the signage must be removed; and a penalty for breach of the relevant by-law should be imposed.  The second respondent says that approval to erect the signage had been sought and obtained from the applicant; in the alternative that even if approval had not been obtained the refusal by the applicant to approve is unreasonable; that the application should be dismissed; and the signage should be approved to remove any uncertainty.,The Tribunal found that the signage had been erected without approval of the strata company; that the strata company had reasonable concerns about the design and size of the signage; that the strata company had taken into account all relevant information before it refused approval of the signage and ultimately commenced this proceeding to seek the removal of the signage; and that the strata company acted reasonably and within its powers by refusing to grant approval for the signage.,The application was therefore successful and a penalty of $500 was imposed for the breach of the by-law.  The Tribunal ordered that the signage had to be removed by not later than 1 November 2017.  This window of time between these orders and the date for compliance may give the second respondent an opportunity to submit to the applicant a new proposal for signage.

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL ACT : STRATA TITLES ACT 1985 (WA) CITATION : THE OWNERS OF FRESHWATER STRATA PLAN 634548 and CHEN [2017] WASAT 120 MEMBER : DR B DE VILLIERS (MEMBER) HEARD : 29 AUGUST 2017 DELIVERED : 12 SEPTEMBER 2017 FILE NO/S : CC 1668 of 2016 BETWEEN : THE OWNERS OF FRESHWATER STRATA PLAN 634548

Applicant

AND

YIN CHEN
First Respondent

ADDSTYLE CONSTRUCTIONS PTY LTD
Second Respondent

Catchwords:

Strata title - Common property - Discretion of strata company to consider and approve signage on a common property window - Considerations to take into account to act 'reasonably' - Relevance of approval granted by local authority - Meaning of 'in the vicinity' - Interpretation of by-laws according to principles of statutory contracts - Imposing a penalty for breach of a by-law

Legislation:

Strata Titles Act 1985 (WA), s 35, s 35(1), s 42A, s 83, s 83(1), s 103I, Sch 1, Sch 2

Result:

Orders made for signage to be removed and penalty imposed for breach of by­law

Summary of Tribunal's decision:

This dispute is about the second respondent having erected signage on the common property window of the lot of which it is a tenant. The commercial office lot which is leased by the second respondent, forms part of the mixed use strata scheme where there are 70 residential apartments and 10 commercial office suites.

The applicant says that the strata company had to give approval for the signage prior to it being erected; that the applicant had not given approval; that the signage must be removed; and a penalty for breach of the relevant by-law should be imposed. The second respondent says that approval to erect the signage had been sought and obtained from the applicant; in the alternative that even if approval had not been obtained the refusal by the applicant to approve is unreasonable; that the application should be dismissed; and the signage should be approved to remove any uncertainty.
The Tribunal found that the signage had been erected without approval of the strata company; that the strata company had reasonable concerns about the design and size of the signage; that the strata company had taken into account all relevant information before it refused approval of the signage and ultimately commenced this proceeding to seek the removal of the signage; and that the strata company acted reasonably and within its powers by refusing to grant approval for the signage.
The application was therefore successful and a penalty of $500 was imposed for the breach of the by-law. The Tribunal ordered that the signage had to be removed by not later than 1 November 2017. This window of time between these orders and the date for compliance may give the second respondent an opportunity to submit to the applicant a new proposal for signage.

Category: B

Representation:

Counsel:

Applicant : Mr Fowler
First Respondent : Matthew Lenhoff
Second Respondent : Ms Websdale

Solicitors:

Applicant : Mr Fowler
First Respondent : Williams + Hughes
Second Respondent : Hotchkin Hanly

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

Ainsworth v Albrecht [2016] HCA 40
Byrne v The Owners of Ceresa River Apartments Strata Plan 55597 [2016] WASC 153
Noranda Australia Ltd v Lachlan Resources NL (1988) 14 NSWLR 1
Taj Coffee Company Pty Ltd and Plaza Arcade [2009] WASAT 107

REASONS FOR DECISION OF THE TRIBUNAL:

Issues

1 The issues for determination is whether the second respondent should be ordered to remove the signage that forms part of the common property window of Lot 73; to make good any damage to common property; and for a fine to be imposed for the alleged breach of a by­law?

Background

2 The second respondent is a tenant in a mixed use scheme which comprises 70 residential lots and 10 commercial office lots at 1 Freshwater Parade, Claremont. A special by­law, Schedule 1 By­law 23, has been enacted to regulate signage on the common property windows of the ground-level commercial lots. The Schedule 1 By-law 23 anticipates that the commercial lots may erect signage for advertising in the windows of the lots. The windows form part of common property. Approval to erect signage is required from the strata company and from the relevant local authority, the Town of Claremont.

3 The requirements of the strata company and the Town of Claremont to erect signage are not the same since different regulatory regimes apply to the applicant and the Town of Claremont.

4 The second respondent sought and obtained approval from the Town of Claremont to erect the signage. The second respondent also sought approval from the strata company, but there is a dispute as to whether the approval had been granted and if not, whether the refusal to approve was unreasonable.

5 The application is brought by the applicant pursuant to s 83 of the Strata Titles Act1985 (WA) (ST Act) for the second respondent to remove the signage and for a penalty to be imposed for the breach of the by­law.

6 The hearing was preceded by a site view. No evidence was taken during the view, but the signage in dispute was pointed out to the Tribunal together with other residential and commercial office lots in the same strata scheme, as well as other strata, residential and commercial operations across Stirling Highway opposite the strata scheme.

7 The following is not contested:

1) The first respondent is the proprietor of the Lot 73 and has indicated by letter dated 14 June 2017 that he does not wish to take active part in the proceeding and that he would abide by the outcome. He indicated that the second respondent is bound by the by­laws of the strata company and that a copy of the by­laws had been given to the second respondent prior to the lease being entered into.

2) The window in the second respondent's Lot 73 to which the advertising sign is attached is part of common property and the lot is classified as a commercial office lot. The strata company is responsible for the control and management of common property as well as enforcing the by­laws of the strata scheme (s 35(1) of the ST Act).

3) Schedule 1 By­law 23 sets out the requirements to erect signage in the strata scheme. It is anticipated by the Schedule 1 By-law 23 that some form of signage would be allowed on the windows of the commercial office suites.

4) The approval required from the strata company is distinct and separate from the approval that is also required from the Town of Claremont. Both the Town of Claremont and the strata company must therefore approve signage prior to the erection thereof pursuant to their respective regulatory schemes.

5) The criteria to consider a proposal for signage used by the Town of Claremont and the applicant are distinct. The Town primarily uses a criterion that relies on a certain percentage of the total window that may be covered by signage, whereas Schedule 1 By­law 23 is more generic, namely that the information contained in the signage may only relate to the business name, description, trademark or insignia; the size which does not exceed the dimensions reasonably consented to by the strata company; and the style must conform with other signage in the vicinity. The Schedule 1 By-law 23 does not contain any percentage guidance in regard to the size of signage vis a vis the total window space.

6) The Town of Claremont approved the signage on 12 May 2016.

7) The signage was erected by second respondent around 8 June 2016. It is in dispute whether approval had been granted by the applicant or whether approval had been unreasonably withheld by the applicant.

8) The applicant by letter of 17 June 2016 informed the second respondent that the second respondent’s signage was in breach of Schedule 1 By-law 23 and directed the second respondent to remove the signage and make good any damage to common property. Neither of the respondents sough a review of the applicant's decision by this Tribunal.

9) The applicant and second respondent had made attempts to resolve the dispute by agreement, but that has not been successful.

Statutory framework

8 The application is brought pursuant to s 83 of the ST Act and Schedule 1 By­law 23 of the applicant.

9 Section 83 of the ST Act relevantly reads as follows:

83. General powers of SAT to make orders

(1) The State Administrative Tribunal may, pursuant to an application of a strata company, an administrator, a proprietor, a person having an estate or interest in a lot or an occupier or other resident of a lot, in respect of a scheme, make an order for the settlement of a dispute, or the rectification of a complaint, with respect to the exercise or performance of, or the failure to exercise or perform, a power, authority, duty or function conferred or imposed by this Act or the by-laws in connection with that scheme on any person entitled to make an application under this subsection or on the council or the chairman, secretary or treasurer of the strata company.

…

(4) Nothing in subsection (1) empowers the State Administrative Tribunal to make an order under that subsection for the settlement of a dispute, or the rectification of a complaint, with respect to the exercise or performance of, or the failure to exercise or perform, a power, authority, duty or function conferred or imposed on the strata company by this Act where that power, authority, duty or function may, in accordance with any provision of this Act, only be exercised or performed pursuant to a unanimous resolution, resolution without dissent or a special resolution.

(5) Nothing in this Part authorises the State Administrative Tribunal to make an order of the kind that may be made under section 28, 29, 29A or 31.

(6) Nothing in this Part affects the generality of subsection (1), but an order in respect of any matter referred to in any other section of this Part shall not be made under this section.

10 Schedule 1 By­law 23 of the applicant relevantly provides as follows:

23. Signs

A proprietor or invitee may install a sign on the exterior of their commercial lot, subject to that sign being:


23.1. limited to the relevant business name, the description of its business and the business trademark or insignia;

23.2. of a size which does not exceed the dimensions reasonably consented to by the strata company;

23.3. in a style substantially similar to signs on any other commercial lots and common property in the vicinity and as approved by the strata company;

…

Contentions of the parties

11 The contentions of the parties can be summarised as follows:

12 The applicant says that the Council of Owners, who is responsible for the day­to­day operations of the applicant, is obligated to uphold and enforce the by­laws on behalf of the applicant. The mixed nature of the scheme requires tolerance for the interests of both categories of proprietors, being residents and businesses. Schedule 1 By­law 23 imports a wide discretion on the applicant to consider all relevant information; to take into account all interests; and to make a decision. In contrast the Town of Claremont, the applicant does not limit its discretion to a certain percentage of a window that signage may cover, but it takes into account all other relevant information such as design, size, and consistency. The applicant uses as a guide that not more than 20% of a window may be covered by signage, but this is indicative rather than conclusive since other considerations must also be taken into account. The signage as originally proposed and ultimately erected is too large; too dominant; too much in 'billboard style'; inconsistent with other signage in the scheme; intrusive; and detracts from the quality of the scheme. The Lot 73 is on the corner of the scheme; highly visible from Stirling Highway and Claremont shopping centre; and the size and dominance of the signage creates the impression that the building is mainly commercial in nature, while in fact it is principally a luxury residential scheme. The applicant says that no approval had been given to the second respondent to erect the signage. The applicant also says that the signage of Claremont Orthodontic Clinic would not be approved if approval had now been sought, but the signage had ostensibly been approved by the developer prior to the strata company having been formed. The applicant concludes that the refusal to give approval for the signage was reasonable.

13 The second respondent says that the Lot 73 is commercial office in nature; it attracts high visibility from Stirling Highway; and it constitutes a prime location for advertising. It was the location of Lot 73 and the right to erect signage that attracted the second respondent to take up the lease. The second respondent sought approval for signage from the Town of Claremont and applicant prior to the signage having been erected. The requirements of the Town of Claremont were objectively verifiable since it referred principally to the percentage of window that was covered by signage. The criteria utilised by the applicant were however vague. The second respondent obtained approval from the Town of Claremont and, according to its understanding of the email of 19 May 2016 approval was also granted by the applicant on the condition that the signage be adjusted so as to remove the images of houses. The signage is consistent with the size, scale and nature of advertisements of the Claremont Orthodontic Clinic as well as with other commercial enterprises on the opposite side of Stirling Highway. The second respondent concludes that approval for the signage had been given, and if not, the refusal to grant approval is unreasonable.

Consideration

14 The parties raised several issues and the Tribunal shall deal with those separately and where make the necessary findings of fact as is relevant to the particular issue.

Does the approval of the signage by the Town of Claremont dispose of the functions of the applicant to also consider the signage?

15 The answer is negative.

16 The erection of signage is subject to approval by two separate authorities, namely the applicant and by the relevant local authority, being the Town of Claremont. Approval by the one does not obviate the need to also obtain approval from the other. The applicant and Town of Claremont use different criteria to assess applications and take into account different considerations in their decisions. It is obligated on both the proprietor and tenant to ensure that the approvals of applicant and Town of Claremont are secured. The applicant in its submissions confused the requirements for an alteration to a lot (Schedule 2 by-law 14) and alteration to common property. This confusion did not materially impact on the outcome of the proceeding. The authority of the applicant in regard to the management of common property derives from s 35 of the ST Act, which, relevantly, includes the power to consider applications to erect signage on common property and to ensure that whatever signage has been erected, complies with the requirements of the ST Act and relevant by-laws of the scheme. Although the Town of Claremont approved the signage, the applicant can exercise its own discretion and make an autonomous decision. In essence the applicant is correct when it says that both the approval of the applicant and the Town of Claremont must be obtained prior to signage being erected.

Did the applicant communicate to the second respondent that the proposed signage should not be more than 20% of the window space?

17 The answer is affirmative.

18 The Tribunal finds as fact that the applicant has accepted for purposes of exercising its discretion pursuant to Schedule 1 By-law 23(2) that a guideline of 20% of window space should be used to assess the area of window that signage may occupy. The Tribunal also finds that the second respondent had been aware of the 20% criterion that had been adopted by the applicant. The Tribunal accepts that the 20% guideline was not documented in a resolution of the Council of Owners as one would expect, but nevertheless the 20% was conveyed to the second respondent and acknowledged by the second respondent as is evidenced in emails by Ms Dominique Travers to the strata manger Mr Nicholas Haslam in email dated 20 April 2016. The Tribunal accepts that the 20% does not receive mention in Schedule 1 By-law 23, but that does not mean the applicant cannot develop a guide to assist proprietors and tenants whenever they seek approval for signage. The very purpose of the 20% guide is to address the concerns expressed by the second respondent, namely to remove complete arbitrariness and to provide some consistency to decision-making. The applicant is encouraged to ensure that the 20% guide as well as any other relevant considerations are properly included in a resolution to ensure transparent procedures. Clarity is also required from the applicant as to whether the 20% refers to the total area of combined window space that is available, or 20% of each individual window pane. The Tribunal is nevertheless satisfied that the applicant: (a) adopted the 20% guide; (b) that the applicant conveyed the 20%-guide to the second respondent; (c) that the applicant acted within the scope of Schedule 1 By-law 23(2); and (d) that the applicant has applied the 20%­guide consistently to other signage in the scheme (see consideration below in regard to Claremont Orthodontic Clinic).

Does the signage exceed the 20% of the window space?

19 The answer is affirmative.

20 It is not contested by the second respondent that the extent of the signage exceeds 20% of the window space, both in terms of total window space and the individual window panes to which the signage is attached.

Do the words 'in the vicinity' in Schedule 1 By­law 23(3) obligate the applicant to assess any proposal for signage on the basis of signage on commercial properties outside the strata scheme?

21 The answer is negative.

22 The Tribunal repeats for sake of convenience the relevant by-law:

23.3. in a style substantially similar to signs on any other commercial lots and common property in the vicinity and as approved by the strata company[.]

23 The Tribunal does not accept the contention of the second respondent that Schedule 1 By-law 23(3) requires the applicant to take signage on other commercial properties 'in the vicinity' of the strata scheme into account when considering applications for signage within the strata scheme. The preferred interpretation of the relevant by­law is that the words 'in the vicinity' be construed as in close proximity to the window for which signage approval is sought within the same strata scheme. The words 'in the vicinity' therefore do not refer to signage in other buildings outside of the strata scheme, but rather that the type of signage must be 'substantially similar' to signage within the same strata scheme. It is noted that by­laws of this nature are regarded as statutory contracts (Byrne v The Owners of Ceresa River Apartments Strata Plan 55597[2016] WASC 153 at [27]) and that the level of precision with which they are drafted is not necessarily the same as with statutory by­laws of Acts of Parliament. The by-laws must however be interpreted within the context of the ST Act; of all the by-laws; in the context of the duty on the applicant in regard to common property; and according to logic and common sense. The Tribunal accepts that the applicant can pursuant to its wide discretion take into account what signage is displayed in other buildings outside this strata scheme, but Schedule 1 By-law 23(3) does not obligate the applicant to consider other schemes, but rather to consider existing and approved signage within the same strata scheme, particularly signage in the vicinity of the window for which approval is sought.

24 The Tribunal is satisfied that the applicant has, to the extent that it is relevant, taken account of signage in the buildings opposite the strata scheme in its deliberations as to how to operationalise Schedule 1 By­law 23(3) and that the applicant has explained to the satisfaction of the Tribunal why the nature and extent of signage on commercial properties on the opposite side of Stirling Highway is not suited for this strata scheme.

Was approval required for signage pursuant to Schedule 1 By-law 23(1)?

25 The answer is affirmative.

26 The Tribunal repeats for sake of convenience the relevant By-law:

A proprietor or invitee may install a sign on the exterior of their commercial lot, subject to the sign being:

23.1. limited to the relevant business name, the description of its business and the business trademark or insignia.

27 The Tribunal does not accept the contention of the second respondent that Schedule 1 By-law 23(1) gave the second applicant the right to install signage without approval of the applicant provided that the signage was limited to the business name, the description of its business and the business trademark or insignia. The Tribunal prefers the construction adopted by the applicant namely that Schedule 1 By-law 23(1) must be read with the general powers and responsibilities of the applicant in regard to common property and specifically the obligation of the applicant to consider and approve signage pursuant to Schedule 1 By-law 23. Schedule 1 By-law 23(1) is intended to set out the nature and extent of the information that is allowed to be displayed by signage. There is no suggestion that the role of approval or oversight by the applicant of what signage is placed on common property is removed or made redundant by the Schedule 1 By-law 23(1). The preferred interpretation of Schedule 1 By­law 23(1) is therefore that: (a) it must be interpreted within the context of s 35 of the ST Act; (b) it must be read in the entirety of Schedule 1 By-law 23; and (c) it seeks to convey what the type of information is that would be allowed to be displayed on signage.

Did the email of 19 May 2016 constitute approval for the signage?

28 The answer is negative.

29 The Tribunal does not accept the contention of the second respondent that the email of 19 May 2016 constituted unconditional approval for the signage to be erected. The Tribunal agrees with the applicant that the email can at its best be construed as progress in the process of consideration, but even then it is clear that 'the updated artwork' had to be re­submitted for final approval by the applicant. Nothing suggests that the second respondent is authorised to continue to erect and display the signage without final approval by the applicant. The Tribunal reaches this conclusion for two reasons: (a) The email of 19 May 2016 makes it clear that although the logo and wording have been approved, the 'artwork' had to be re­submitted for final approval. The 'artwork' refers in the assessment of the Tribunal to the entire signage and not just to the inclusion of images of houses; and (b) the second respondent in her email dated 20 May 2016 took issue with the so called 'approval' she now wishes to rely on. In the email of 20 May 2016 the second respondent requests the applicant to reconsider its 'decision'. The second respondent did not accept the request to re­submit 'updated artwork' but went ahead and erected the signage, which included the image of houses which was objected to by the applicant. The second responded only removed at a later date the images of the houses. The credibility of the second respondent is questioned by the applicant, and, in the view of the Tribunal, for good reason. On the one hand the second respondent purports that email of 19 May 2016 is a final approval and therefore she seeks to rely on it, but on the other hand she then challenges the email on 20 May 2016 and goes ahead and erects the signage with the images of the houses included ­ something which was specifically not approved in the email of 19 May 2016. The second respondent clearly acted without the necessary approval of the applicant when the signage was erected.

30 Even if the second respondent had been confused, the letter by the applicant dated 17 June 2016 made it unequivocal that the signage had to be removed and neither of the respondents sought a review from the Tribunal in regard to the letter of refusal.

Was Nicholas Haslam authorised to act on behalf of the applicant?

31 The answer is affirmative.

32 The relevancy of this question falls away in light of the findings above. Although the applicant contended that the email of 19 May 2016 by Mr Haslam did not convey exactly the instructions of the applicant, the Tribunal has found above that Mr Haslam's email did not constitute unconditional approval and therefore the point is moot. It is however noted that Mr Cooper, who used to be employed as the Chief Executive of the strata managing company Blackburne, says in his witness statement that the suggestion by Mr Haslam that the signage had been approved was incorrect and that Blackburne communicated the error to the second respondent. The second respondent did not seek to cross­examine Mr Cooper. The Tribunal accepts his written evidence since it is consistent with the subsequent actions of the applicant, culminating in the letter of 17 June 2016.

Is the applicant constrained in the exercise of its discretion by the signage erected by the Claremont Orthodontic Clinic?

33 The answer is negative.

34 The Tribunal finds that the applicant did not approve the signage of Claremont Orthodontic Clinic. The approval was ostensibly granted by the developer. There was no evidence from the developer or from Claremont Orthodontic Clinic about when approval had been given, but for purposes of this proceeding it is found that the approval for the signage was not sought from the applicant and that the applicant had not given approval. It is noted that the current council of owners are of the opinion that should a similar application be received at time of the hearing for signage such as those of Claremont Orthodontic Clinic, it is unlikely that the applicant would approve it in light of the decisions the applicant has taken in regard to the enforcement of Schedule 1 By­law 23. The Tribunal rejects the proposition of the second respondent that the Clinic's sign has 'set a precedent'. The Tribunal accepts that the signage of the Claremont Orthodontic Clinic was erected prior to the strata council becoming operational; that the nature and scope of the Claremont Orthodontic Clinic is unlikely to have been approved had it been submitted to the applicant; and that the applicant has taken into account the Claremont Orthodontic Clinic signage but decided that in light of the interests of all proprietors in the strata scheme that such signage should not be used or followed as a precedent. The Tribunal rejects the proposition of Ms Travers in her witness statement that since the Town of Claremont had approved the signage and since the signage was consistent with the signage of Claremont Orthodontic Clinic, it could be reasonably expected of the applicant to approve the proposal for Lot 73. Ms Travers sought to circumvent the approval process of the applicant by erecting the signage without approval, and then she refused to remove the signage or to seek a review of the decision by the State Administrative Tribunal.

Has the applicant taken into account all relevant considerations in regard to the signage erected by the second respondent?

35 The answer is affirmative.

36 The Tribunal finds that the members of the council of owners of the applicant have taken into account all relevant information before it rejected the proposed signage and consequently commenced this proceeding. The following are examples of the matters that have been considered by the applicant when reviewing not only the second respondent's application for signage but other applications for signage in other parts of the scheme:

• The mixed use of the strata scheme with 70 luxury apartments and 10 commercial office lots.

• The balance of interests between the advertising sought by the commercial office occupiers vis-a-vis the overall presentation of the building which faces Stirling Highway and the Claremont shopping centre.

• The desire of the owners of residential lots who wish the scheme to retain its image as a luxury residential complex rather than a predominant commercial office complex. See in this regard the witness statement of Mr Kevin John Edwards which was not contested by the second respondent and in which reference is also made to advertising material about the luxury nature of the scheme.

• Consistency of advertising in terms of design, scope, percentage of window occupied; and general presentation. This is clearly evidenced in the signage of other lots such as the office of the accounting firm; Limitless; Sonos, and JJ Leach group. The signage of these enterprises are informative and yet not intrusive or dominant.

• Enforcing the by-laws and taking steps against occupiers who breach the by-laws in regard to signage, as has happened with Sonos.

• Displaying pragmatism to allow temporary increased size signage to assist a new business to find its feet, as has happened with Sonos.

• A balanced and well-considered weighing up of all the above factors and any other relevant consideration.

37 The Tribunal finds that the applicant has acted fairly, consistently, openly, professionally and with due regards to all interests when it rejected the application for signage by the second respondent and when it decided to commence this proceeding. The process of decision­making adopted by the applicant is consistent with the standard as summarised in Taj Coffee Company Pty Ltd and Plaza Arcade [2009] WASAT 107 at [3] where the Tribunal gave consideration to what is meant by 'reasonable' albeit within the context of a different statute. The Tribunal finds that reasonable decision-making entails that all relevant information be taken into account; that the decision is supported by logic rather than being irrational; and that the ultimate decision was open to be made by the decision­maker. The Tribunal need not agree with the decision, but it must be satisfied that the decision was not unreasonable. The deliberations of the applicant were most certainly not unreasonable and not arbitrary (see: Noranda Australia Ltd v Lachlan Resources NL (1988) 14 NSWLR 1).

38 Also see in this request Ainsworth v Albrecht [2016] HCA 40 in which the High Court found that an owner who seeks to protect his/her propriety rights cannot be seen as acting unreasonably. Although in the current matters before the Tribunal the second applicant has not lodged an application pursuant to s 85 of the ST Act, the Tribunal cannot find that the refusal of the applicant is unreasonable.

Has the second respondent breached Schedule 1 By­law 23?

39 The answer is affirmative.

40 The second respondent erected the signage without approval of the applicant and failed to remove the signage when it was directed by the applicant.

Should the second respondent be ordered to remove the signage and make good any damage caused to common property?

41 The answer is affirmative.

42 The applicant is acting within its powers pursuant to s 83(1) of the ST Act to seek an order for unauthorised signage erected on common property to be pulled down. The applicant has consistently acted reasonably and in discharge of its duties pursuant to s 35 of the ST Act. It is incumbent on the second respondent to pull down the signage and to make good any damage that has been caused to common property. The Tribunal shall allow the second respondent until 1 November 2017 to give effect to these orders. In the meantime the second respondent may wish to submit a fresh application for signage so as to save time and costs. The Tribunal shall also issue the orders against the first respondent who, as proprietor, has an obligation to ensure that the tenant complies with the by-laws and orders of the Tribunal.

Since the by-law has been breached, should a penalty be imposed against the first respondent?

43 The answer is affirmative.

44 Schedule 1 By-law 27 of the applicant provides as follows:

Pursuant to section 42A(1) and subject to section 42A(2), the penalty for a breach of any Schedule 1 by-law or Schedule 2 by­law shall be $500, or such greater amount as may later be prescribed for the purposes of sections 42A or 103I.

45 Section 42A of the ST Act provides that a by­law may be enacted, as the applicant has done, to impose a penalty for a breach of a by­law, provided that the Tribunal imposes a penalty pursuant to s 103I of the ST Act. Section 103I of the ST Act enables the Tribunal to make an order for a party to pay a penalty and/or the cost of the application. The Tribunal must, however, be satisfied that the relevant by­law specifies a penalty for breach of it; that the strata company has authorised the application; and that the proprietor has 'wilfully and persistently' breached the by­law.

46 The Tribunal is satisfied that those requirements are met by this application. Schedule 1 By-law 27 attaches a penalty to the breach of any of the Schedule 1 or Schedule 12 by-laws; the application has been authorised; and the first respondent has allowed the second respondent to wilfully and persistently breach Schedule 1 By-law 23. The first respondent may have thought that by taking a 'watching' stand it was shielding itself against any adverse outcome, but by doing so the first respondent failed to discharge its duties to ensure that the second respondent complies with the by­laws of the strata scheme. The applicant had no choice but to commence this proceeding after both respondents have been made aware of the concerns of the applicant but both respondents failed to act.

47 The first respondent has an obligation to ensure that its tenant complies with the by-laws of the strata scheme. The first respondent cannot merely take a passive approach as if accountability has been delegated by way of the lease. The first respondent must take active steps to ensure compliance with by­laws by its tenant, the second respondent. In this case the first respondent failed to take active steps to remedy the failure of the second respondent to comply with the by­laws. If the respondents had by their own initiative sought a review from the Tribunal of the refusal of the applicant their actions would have been reasonable. But in this case they simply refused to heed to the decision of the applicant. A penalty of $500 is imposed.

Summary of findings

1) The second respondent erected the signage the subject of this application without approval of the applicant.

2) The applicant acted pursuant to its powers and reasonably when it rejected the signage proposed by the second respondent and when in the final instance commenced this proceeding.

3) The first and second respondent should remove the signage and make good any damage to common property.

4) A penalty of $500 should be imposed against the first respondent for the breach of the by­law.

Orders

1. The application succeeds.

2. The second respondent shall by not later than 1 November 2017 remove the unauthorised signage at Lot 73 and make good any damage that may have been caused to common property.

3. The first respondent shall take the necessary steps to ensure that the second respondent complies with order 2.

4. A penalty of $500 is imposed on the first respondent for the breach that has occurred of Schedule 1 By-Law 23. The penalty shall be paid by not later than 1 October 2017.

I certify that this and the preceding [47] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

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DR B DE VILLIERS, MEMBER