The Owners Of Mandurah Terrace Apartments Strata Plan 17133 and Russell
[2009] WASAT 1
•13 JANUARY 2009
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: COMMERCIAL & CIVIL
ACT: STRATA TITLES ACT 1985 (WA)
CITATION: THE OWNERS OF MANDURAH TERRACE APARTMENTS STRATA PLAN 17133 and RUSSELL [2009] WASAT 1
MEMBER: MR C RAYMOND (SENIOR MEMBER)
HEARD: 5 DECEMBER 2008
DELIVERED : 13 JANUARY 2009
FILE NO/S: CC 994 of 2008
BETWEEN: THE OWNERS OF MANDURAH TERRACE APARTMENTS STRATA PLAN 17133
Applicant
AND
RAYMOND ARTHUR RUSSELL
Respondent
Catchwords:
Strata Titles Act 1985 (WA) - Application for removal of air-conditioner fixed to common property - Whether consent given for installation - Whether decision should be delayed pending application by respondent for order that the strata company consent or for order granting licence for use of common property
Legislation:
State Administrative Tribunal Act 2004 (WA), s 77(2)
Strata Titles Act 1985 (WA), s 3, s 3(2), s 3AB, s 7, s 7B, s 35, s 35(1), s 35(1)(b), s 42(8), s 81(7), s 83(1), s 85, s 93, s 94. s 94(2), s 95
Result:
Application granted
Category: B
Representation:
Counsel:
Applicant: Mr R Kronberger
Respondent: Mr J C Yeldon
Solicitors:
Applicant: Atkinson Legal
Respondent: HFM Legal
Case(s) referred to in decision(s):
Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 229
Campbell and The Oowners of Rangeview Apartments [1988] WASTR 29
Crockett and Munroe [2006] WASAT 382
Hamilton v Thompson DCWA APP 154 of 1998
Hopkins and Clayton [2007] WASAT 255
Pluim and Willis [2007] WASAT 233
R A Brierley Investments Ltd v Landmark Corporation Ltd (1966) 120 CLR 224
Sisto and The Owners of Glenway Gardens Apartments [2005] WASAT 282
Smith and City of Fremantle [2007] WASAT 153
Strata Plan No 464 v Oborn NSW Strata Titles Cases 1979 90
The Owners of Millpoint Strata Plan 11391 and Houston [2007] WASAT 9
Verryt and Williams [2005] WASAT 101
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
The applicant applied for orders for the removal of an airconditioner installed by the respondent on common property allegedly without the prior approval of the applicant.
On the facts of the case, the State Administrative Tribunal held as follows. The chairperson of the strata company had given oral consent for the installation of an airconditioner. The respondent installed the airconditioner in a position, which was not in accordance with the approval. The respondent gave an undertaking to remove the airconditioner on the basis that if he wished to have it reinstalled in the same position as the old airconditioner, but not within the original containment cage, he would make an application to the strata company to be dealt with in a general meeting. The respondent failed to remove the airconditioner or make a further application for approval. Despite correspondence between the parties purporting to arrive at a settlement, there had been no meeting of the minds and no binding agreement was reached. Finally, the airconditioning unit was significantly larger than the other airconditioning units installed in the same area of the parcel and was not in keeping with the visual degree of uniformity within that area.
In accordance with arrangements made prior to the hearing, consideration was given to whether the proceedings should be stayed to enable the respondent to apply for orders under either s 85 or s 94 of the Strata Titles Act 1985 (WA).
The State Administrative Tribunal outlined the consistent approach taken in considering such applications that the management of a strata company be left to the strata company and that the State Administrative Tribunal should not too readily impose its own views of what is unreasonable. It was necessary to balance interests and views in order to reach a subjective view of whether a decision is unreasonable. It was stated that if the balance is delicately poised it will not be possible to conclude that the decision is unreasonable because it is possible for persons acting reasonably to come to opposite conclusions on the same set of facts. The task was for the State Administrative Tribunal to assess whether there was good sense or logic to support the dissenting view. It is not a Wednesbury standard of unreasonableness which is applied, so it is not necessary that a decision be regarded as so unreasonable that no sensible lot owner or number of lot owners could have come to that conclusion.
The State Administrative Tribunal held that it was relevant to use as a guide the criteria for determining the basis upon which consent to effect an alteration to a lot might be refused. Further, that the consistent approach taken was that the degree of uniformity and the external appearance of the development is a matter for the strata company, acting within its powers, to decide. As the respondent's airconditioner was significantly larger than all other airconditioners and not in keeping with the visual uniformity within the particular area, it could not be said that the applicant had acted unreasonably in refusing consent so that no order could be made under s 85 of the Strata Titles Act 1985 (WA).
The State Administrative Tribunal held that it was not open to make an order under s 94 of the Strata Titles Act 1985 (WA) because the evidence was insufficient to establish that the Lot was incapable of reasonable use and enjoyment unless the order was made. It was also found that there were no other factors which would militate against the making of an order for the removal of the airconditioner and that having regard to all the circumstances of the case, the order should be made, as sought, subject to minor modifications.
Introduction
This is a case about the installation of an airconditioning unit which cost the respondent (Mr Russell) $1,250. It was installed by Mr Russell with assistance from a friend and another resident in the complex. The externally mounted compressor was later moved by a licensed airconditioning installer at Mr Russell's expense, the amount of which was not stated.
Both parties have been legally represented throughout and the legal costs necessarily incurred in a proper presentation of the parties' respective cases, unless any special arrangements have been made, will obviously be quite disproportionate to the value of the airconditioning unit. The matter was referred to mediation which was unsuccessful. As aspects of the case turned on credibility, there was no option but to set the matter down for an oral hearing on 5 December 2008. While all relevant evidence was taken on that day, there was insufficient time for closing submissions and a programme was set for that purpose. The decision was reserved with effect from the date of last compliance with those directions being 19 December 2008.
In accordance with the Tribunal's usual practice in such matters, the Tribunal has taken into account all the material which has been filed with the Tribunal, the evidence provided at the final hearing and all submissions which have been made. The documentation and evidence is extensive. In order to achieve some proportionality, the Tribunal will not set out all of the submissions and evidence but will refer to that which is relied upon for the making of the decision, in compliance with s 77(2) of the State Administrative Tribunal Act 2004 (SAT Act).
The application and response
The applicant, The Owners of Mandurah Terrace Apartments, Strata Plan 17133, (the strata company) applied to the Tribunal on 26 June 2008 for an order under s 83(1) of the Strata Titles Act 1985 (WA) (ST Act) requiring Mr Russell, as the registered proprietor of Lot 23 on Strata Plan 17133, at his cost and risk in all respects within 14 days, remove from the exterior surface of the building in which Lot 23 is situated, the airconditioner and all associated wires, cables, ducting, brackets and other materials installed by him or on his behalf and immediately thereafter:
a)replace them with fittings, including an airconditioning containment cage, that correspond with the other airconditioners within the scheme; and
b)make good to the satisfaction of the strata company's council of owners any damage caused to that wall by the installation and removal of those items and any previous items that he has, or has arranged to have, attached to the exterior of the common property wall of the building in which his Lot 23 is situated.
The grounds assert that Mr Russell replaced an airconditioner and cage in which the airconditioner was located and replaced it with a larger, differently situated airconditioner without the approval of the strata company and that until then there was uniformity within the scheme in relation to the size, siting, colouring and method of affixation of every airconditioner in the scheme. Further, that the airconditioner is attached to a common property wall which, pursuant to s 35(1) of the ST Act is subject to the control and management of the strata company. It is alleged that before the new airconditioner was installed, the strata company advised Mr Russell of the need to retain any new airconditioner within the cage in which the original airconditioner was situated. It is alleged that as no exclusive use rights have been granted under s 42(8) of the ST Act, that the installation amounts to an unauthorised exclusive use of common property and that the installation has damaged the adjacent common property wall in breach of Sch 2 bylaw 3. It is also alleged that Mr Russell failed to honour an oral undertaking to remove the airconditioner.
Mr Russell has filed a response to the application in which he has asserted that he asked the strata company for permission to install the new airconditioner and was informed by Sheila Jackson (the chairperson of the strata company) that it was in order for him to install the new airconditioner provided it was installed 'in the same place as the old one'. Further, although Mr Russell initially installed the new airconditioner in a different place on the wall of Lot 23, after negotiation with the strata company, Mr Russell moved it 'to the same position as the original airconditioner'. It is alleged that it was not possible to install the new airconditioner inside the cage surrounding the original airconditioner because the new airconditioner is larger. Mr Russell further asserts that the existing cages surrounding the airconditioners on the other strata lots are of slightly different sizes and that the applicant has acted unreasonably in refusing to consent to the installation of the new airconditioner in the same place as the old one, albeit not enclosed in the cage surrounding the original airconditioner. Mr Russell denies that any oral undertaking was given to remove the new airconditioner and says that the undertaking was to install the new airconditioner in the same place as the original airconditioner and further denies damaging the common property wall.
The response also sets out orders sought by Mr Russell. The first order sought is that the application be dismissed. It is not strictly necessary to request that order because it would result automatically if the application failed. Further orders are then sought under s 85 of the ST Act that the strata company consent to the placement of a new airconditioner and under s 94 of the ST Act, that the Tribunal order that the respondent may use that part of the common property wall to which the new airconditioner is presently attached for the purpose of 'hanging the new airconditioner to service' the lot and that the strata company pay Mr Russell's costs of the application. Without Mr Russell having filed any application it is not open to the Tribunal to make orders under either s 85 or s 94 of the ST Act. Rather than delay the proceedings, while such applications were made, the Tribunal indicated at a directions hearing that if the evidence established that there were reasonable prospects of Mr Russell being entitled to either of the above orders, it would decline to make the orders sought by the strata company, at least at that stage, and the application would be adjourned to enable Mr Russell to make formal application for the orders sought. The proceedings would then be consolidated and the Tribunal would order that regard be had to all of the documents filed and evidence provided in these proceedings in determining the new application.
Also during the course of the directions hearings it was clarified that the Tribunal could not make an order for costs as a consequence of the provisions of s 81(7) of the ST Act. The matter proceeded to final hearing on the above basis, save that the correspondence filed included an exchange which raises an issue of whether the parties had compromised the dispute, and the parties' legal representatives have conducted the case on the basis that this was an issue for determination.
The issues for determination
The application, the response and correspondence therefore raise the following issues for determination by the Tribunal as formulated by Mr Russell's solicitors:
1)Whether or not Ms Jackson, on behalf of the strata company, gave Mr Russell verbal permission to install his airconditioner before he did so.
2)Whether a written agreement was reached to settle the dispute.
3)Whether the Tribunal should exercise its discretion under s 83(1) of the ST Act to grant the order sought.
4)Whether the proceedings should be adjourned or stayed to enable Mr Russell to make an application under either s 85 or s 94 of the ST Act.
The relevant evidence and facts found
Apart from the documentary material provided, the Tribunal received written statements from Sheila Jackson, chairperson of the strata company, in support of the strata company's application, and from Mr Russell, Simon Charles McGlasson, a licensed airconditioning installer, and Frederick Levi Chatfield, a former caretaker employed by the strata company and an owner and resident of a lot within the parcel, in support of Mr Russell. Oral evidence was given by Ms Jackson and Mr Russell and they were both subjected to crossexamination.
The parcel and appearance of the airconditioners
The facts relevant to the matter are as set out below. Where the parties have held a different view of the facts, reasons are given for the facts found by the Tribunal.
The strata plan reflects that the parcel comprises of 59 residential apartments, a reception area, restaurant and function centre. The strata plan was registered on 17 February 1989. According to Ms Jackson, the scheme was originally constructed as a motel before it was strata titled. According to her, the strata plan includes 58 residential lots and four commercial lots used for various purposes.
Ms Jackson explained that the residential units are within the two parallel building blocks to the northwest of the commercial buildings which face Mandurah Terrace. One of the residential blocks comprises lots which are above and below each other within a two storey section. Between the two residential building blocks is a grassed area. There are a series of gableended extensions from each residential block which face onto the grassed area. Photographs tendered by both parties show that there is a high degree of uniformity between the main residential blocks and each of the extensions.
Airconditioning units have been installed at what appears to be the same height and location on the side of each gable wall. In fact, there is some variation in the size of the airconditioning units but they are contained within cages which give an appearance of uniformity in size. While that is the appearance given from at least some views of the gable ends facing into the grassed area, Mr Russell has tendered photographic evidence of other airconditioning units which reflect a degree of variation in size of the units and the manner in which they are affixed. Insofar as those airconditioning units are located on the commercial buildings, Ms Jackson's evidence is accepted as to their precise location and that they can only be viewed from particular angles. These airconditioners do not impact upon the uniformity of appearance within the grassed area. Mr Russell relied on photographs of various airconditioning units, being that attached to the lot opposite Lot 23 and attached to Lot 26, Lot 27, Lot 30, Lot 35 and Lot 37. These show variations in the style of cage but a general uniformity in appearance. They also demonstrate examples of smaller airconditioning units being fitted within the original cage. When viewed face on, the difference, at least in relation to Lot 37, is quite marked, but because it is within a cage apparently similar in size to the other cages, the difference is not likely to be apparent from other angles. It must also be noted that the gable end wall on which the airconditioning unit is located on Lot 37 does not face into the grassed area. It faces northeast in the opposite direction.
Although no photograph was provided of the airconditioning unit installed on the gable wall of Mr Chatfield's Lot 33, his statement is to the effect that he installed a new airconditioner in September 2003 and that the new airconditioner is slightly larger than the original, in that it was about 5 centimetres deeper. Also, because it is heavier than the original airconditioner, Mr Chatfield affixed it to the wall using two brackets below it as a support. It must follow that this is therefore not within a cage. Lot 33 is the very end lot on the northeast corner of the residential block and does not face the grassed area.
Evidence was tendered by the strata company of the actual dimensions of the airconditioning units throughout the single storey section of the residential block and the ground floor of the double storey section of the residential block (see applicant's book of documents number 26 (ABOD)). These dimensions give the height, width and depth of each unit. They are too numerous to repeat but are incorporated by reference. The most common height is 400 millimetres but the variation is between 370 millimetres and 470 millimetres. The most common width is 620 millimetres but the variation is between 520 millimetres and 680 millimetres. The most common depth is 300 millimetres but the variation is between 220 millimetres and 380 millimetres. These measurements do not include Mr Russell's airconditioning unit, the measurements of which are height 600 millimetres, width 840 millimetres and depth 440 millimetres.
It should be noted that Mr Russell has also provided some photographs of airconditioning units on the upper floor of the residential blocks. The photographs show that the airconditioning units are all in cages and the only point which seems to be made is that they are not 'in the "uniform" position', (respondent's bundle of documents (RBOD) page 52). A photograph of Mr Russell's airconditioner as it currently appears is shown in RBOD 46. It is located in the same position as the other airconditioning units facing the grassed area. It is not in a cage. It also has a markedly different appearance from any angle. RBOD 46 shows the unit when viewed face on. Whereas the other units all have a rectangular grille, this unit has a circular grille within a rectangular body. When viewed from a different angle (RBOD 44) it can be readily observed that the unit juts out considerably more than the other airconditioning units. This is attributable to the unit's greater depth but it also appears as if the unit is not fitted flush with the wall which exacerbates the depth difference. That can be more readily seen from the photograph which is the last document forming the bundle of documents included within ABOD 26. It appears from that photograph that there is plastic conduit which passes behind the airconditioning unit between it and the wall. (It should be noted that the position of the airconditioner described above is not the position in which it was originally installed. The circumstances which led to the airconditioner being moved to the above current position from where it was originally installed are described below.)
The Tribunal concludes that there is a marked difference in the appearance of Mr Russell's airconditioning unit when compared with the appearance of the airconditioning units otherwise visible from within the grassed area. The effect of that difference is a matter for further consideration. It is common cause that all of the airconditioning units, including that installed by Mr Russell, are affixed to common property. The relevant vertical boundaries of each lot are as delineated on a sheet of the floor plan of the strata plan and, insofar as they constitute the base of walls which correspond substantially with those lines, are the inner surface of the walls by virtue of the definition of 'lot' set out in s 3 of the ST Act, read with s 3(2) thereof. Section 3AB of the ST Act does not apply because the strata title scheme is not a single tier strata scheme.
The installation of the airconditioner
In about July or August 2005, Mr Russell spoke to Ms Jackson. During that discussion, Ms Jackson gave permission for the installation of the airconditioner. There is a dispute as to the precise terms of that discussion.
According to Mr Russell, Ms Jackson said words to the effect that he could install a split cycle airconditioning system 'so long as it goes in the same position as the old one'. This quotation is taken from Mr Russell's witness statement which he signed on the day of the hearing, 5 December 2008. It must be said that Mr Russell's recollection of specific issues during his oral testimony on the same day was not impressive. He did not readily respond to some questions and, on the other hand, made assertive statements which contradicted his witness statement. For instance, he denied having received a letter from Ms Jackson on behalf of the strata company, dated 12 December 2006, when quite clearly he must have received the letter, as reflected in his witness statement, and because his solicitors responded to the letter on 19 December 2006.
By contrast, Ms Jackson was very precise in the manner in which she gave her evidence and she was obviously careful to be accurate in what she said. When she could not recall something accurately, she made that clear. Reference will be made below to other improbabilities in Mr Russell's evidence. Where there are differences between the evidence of Ms Jackson and Mr Russell, the Tribunal prefers the evidence of Ms Jackson.
Ms Jackson acknowledged that she had given Mr Russell permission but said that the airconditioning unit must fit in the cage, that is, it must be in the space within the cage.
Shortly thereafter, Mr Russell purchased the airconditioner from a supplier at a cost of $1,250 and he, together with a friend and Mr Chatfield, installed the airconditioner. However, the airconditioner was not installed in the same position as the old airconditioner, or within the old cage. It was installed directly under the apex of the gable and at a greater height than the old unit. (See fourth to last photograph included within ABOD 26.) In the letter from Mr Russell's solicitors dated 19 December 2006, the explanation was offered that unfortunately the electrician, who installed the unit, installed it higher up on the outside wall, which conveyed the impression that this was a mistake and that the airconditioner had not been deliberately placed in this position by Mr Russell.
In Mr Chatfield's statement, he says that Mr Russell and another person were in the process of installing the new airconditioner. He was asked by Mr Russell to help because the airconditioner was heavy. He then assisted Mr Russell and his friend lift the airconditioner onto the brackets 'Mr Russell had affixed to the wall for this purpose' (para 7 of witness statement). Further Mr Chatfield queried whether Mr Russell had permission to install the airconditioner because he explained that he knew that there had been problems with this sort of thing before. Mr Russell responded to the effect that he had discussed it with Ms Jackson and that she had said that he could do so.
On Mr Russell's own version, he knew that the airconditioner had to be installed in the same position as the original airconditioner. He was therefore less than forthright in the manner in which he conveyed to Mr Chatfield that he had approval to install the airconditioner, the obvious implication being that he had approval to install the airconditioner in the more central position under the gable. The fact that an incorrect explanation was later given through Mr Russell's solicitors on 19 December 2006 suggests that this was no innocent oversight on his part. The Tribunal finds, on the balance of probability, that Mr Russell chose to install the airconditioning unit in a different position to that for which he was given approval, even on his own version. Further, having regard to all of the evidence, and other unsatisfactory aspects of Mr Russell's evidence, referred to further below, the Tribunal also finds that Mr Russell was probably informed that the airconditioner had to be placed in the same cage.
Under crossexamination, Mr Russell conceded that he had not provided the airconditioning supplier with the dimensions of the cage. He had simply given them the dimensions of the rooms which he wished to have serviced by the airconditioner and then acted on the supplier's recommendation of the appropriate sized unit to be installed.
Although it was an obvious issue in the proceedings as to whether or not it would have been possible in July or August 2005 to obtain a split cycle airconditioning unit capable of being fitted in the cage and of servicing Mr Russell's lot, the issue was addressed very superficially. The strata company's solicitors had written to Mr Russell's solicitors by letter dated 28 August 2008 advising that their client had instructed that a Teco airconditioner model number LA18084 was capable of being installed in the original airconditioner space. Mr McGlasson, who gave a statement on behalf of Mr Russell, dealt with why the new airconditioner system was better than the old unit. He stated that he did not discuss with Mr Russell whether or not it would be possible to get another wallmounted system because Mr Russell had already installed the new system, and in any event, 'I would not have wanted to fit an airconditioner which I knew would not do the job properly even if I could get one which would fit in the hole' (which is taken to be a reference to the cage). He stated there were other wallmounted airconditioners available at the time but none of the same dimensions as the old airconditioner, being either bigger or smaller. That evidence therefore begs the question: Could any of those smaller airconditioners have adequately serviced Mr Russell's Lot and, in particular, could the Teco model identified by the strata company have done so? The Tribunal concludes that there is no sufficient evidence to support a finding that a suitable alternative airconditioner could not have been purchased in July or August 2005.
The next development was that on or about 11 November 2005 Ms Jackson telephoned Mr Russell to convey that she had received a number of complaints from owners to the effect that he had put a huge airconditioning unit 'in the roof line' and that he should not have done this because he knew it had to be in the cage. Mr Russell conveyed that the cage was too small and that the unit would not fit in. Ms Jackson indicated that there were other matters discussed and she could not recall everything. She stated that she informed Mr Russell that he needed the approval of the strata company, but if he did not wish to apply to the strata company, he could call an extraordinary general meeting. Further, that she informed him that an annual general meeting was to be held in about February 2006 and he could ask for this to be put on the agenda. However, Mr Russell would need to take the airconditioner off the wall and then await the outcome of the general meeting and see what owners of other lots had to say. Ms Jackson undertook to keep Mr Russell informed as to the date of the next general meeting.
Ms Jackson testified that Mr Russell said that she should give him a week or so and he would get the airconditioner down, but then, as indicative of her attempts to be as accurate as possible with her evidence, Ms Jackson volunteered that perhaps Mr Russell had said something along the lines that he would see if he could get it down (which is understood to be within the same time frame of a week or so).
On the same day, Ms Jackson wrote to Mr Russell confirming her telephone discussion with him. In the letter, she pointed out that the installation was unauthorised and a breach of the ST Act. The letter reflects that she would convey Mr Russell's apologies to all of the concerned owners -
with your assurances that the airconditioning unit will be removed within the next 10 14 days.
Also our assurances that you will be notified of the next general meeting of the strata company which is tentatively suggested for around the end of February 2006.
In Mr Russell's written statement he conceded that Ms Jackson informed him that he had put the airconditioner in a different position and that it was not in a cage and he needed to get approval from the strata company to do what he had done. He then proceeds (para 9 of the statement) to say that he responded 'Okay. I will get it moved over to the position you told me to put it'.
Mr Russell then states (para 10) that a couple of days later he received the letter dated 11 November 2005 confirming that he needed the consent of owners 'if I left things as they were'.
In his oral evidence, Mr Russell denied receiving the letter of 11 November 2005, just as he subsequently denied receiving the letter of 12 December 2006. When the Tribunal pointed out the inconsistency between his oral evidence and the statement in para 10 of his written statement that he had received the letter, he acknowledged that he had done so. He said that he had never agreed to move the airconditioner within 10 14 days and that there had been no reference at all during the discussion to applying to the strata company for approval. He did not know why Ms Jackson had made any reference to the next general meeting.
In fact, Ms Jackson testified that not only had there been a discussion about putting the matter before a general meeting, but that she had later telephoned Mr Russell to inform him that the next general meeting would not be in February as originally thought, it would be held during April 2006.
The Tribunal accepts Ms Jackson's evidence as being accurate. To the extent that she had some doubt about what was discussed, her contemporaneous letter of 11 November 2005 serves to remove that element of doubt. It is of note, and a factor which militates against acceptance of Mr Russell's evidence, and conversely supports the evidence of Ms Jackson, that Mr Russell did not respond shortly after receipt of the letter to object to its contents.
Mr Russell did nothing in the following year to remove the airconditioner. He did not put any proposal before a general meeting of the strata company. Eventually, on 12 December 2006, Ms Jackson, on behalf of the strata company, wrote to Mr Russell referring him to the minutes of the annual general meeting held that year in which the council of owners had been requested to take formal action in the matter of the airconditioner unit which he had failed to remove. Mr Russell was given until 31 December 2006 to remove the airconditioner and repair the exterior wall to comply with the remainder of the buildings. On 18 December 2006, Mr Russell's solicitors responded by letter of that date. After setting out Mr Russell's version of events, to which reference has already been made, the letter proceeded to convey an offer to settle the dispute on the basis that Mr Russell would, at his cost, move the new airconditioner from its present position on the external wall to the position where the old system was installed.
The strata company responded by a letter which is dated 8 December 2007 but which it was common cause should have been dated 8 January 2007. In this letter Ms Jackson outlined the events from the strata company's perspective of what had occurred. In relation to the offer portion of the letter and reply, the letter then stated as follows:
The Council of Owners are pleased that Mr Russell is now going to remove the split level air conditioner, hopefully also the brackets, pipes, & cables from the outside wall and to repair the damage caused and to install his air condition unit inside the holding cage, as that is all that has ever been requested that he do.
The Council of Owners agree that it is to be at Mr Russell's own cost, and would like to remind him that licensed and authorised personnel only can carry out any electrical or repairs to common property as the Strata Company Insurance could be jeopardised.
Agreed also by the Council of Owners the removal and repairs to be completed by 31 January 2007.
Mr Russell did nothing after this date. On 2 July 2007 the strata company's solicitors wrote to Mr Russell's solicitors. On 3 July 2007, Mr Russell's solicitors responded, advising that a copy of the letter had been sent to their client for instructions.
On 17 July 2007, Mr Russell's solicitors advised that the delay was due to Mr Russell's wife being very ill and advised that Mr Russell would complete the works by 31 August 2007.
On or about 13 August 2007, Mr McGlasson relocated the airconditioning unit in accordance with Mr Russell's instructions. It was relocated to substantially the same position as the old unit, but was not placed within the cage. It was not possible to achieve that because the airconditioning unit, that is, the condenser, was too large to fit within the cage.
On 4 February 2008 the strata company's solicitors wrote to Mr Russell's solicitors advising that nothing had been done to remove the airconditioner and that it appeared that 'it has been relocated but without the approval of the strata company'. A further letter was written on 11 April 2008, this time direct to Mr Russell as his solicitors did not have instructions. This letter made reference to the strata company having accepted Mr Russell's offer in good faith but conveys that Mr Russell had not honoured the undertaking.
The effect of this correspondence, namely, the offer letter dated 18 December 2006 and the responsive letter dated incorrectly 8 December 2007, will receive further consideration below.
Application was thereafter made to the Tribunal. Shortly prior to the final hearing, Mr Russell, through his solicitors, sought to procure sufficient support for his position to requisition the holding of an extraordinary general meeting for the passing of a resolution that the airconditioning system presently installed in Lot 23 be approved to remain in place. That attempt was unsuccessful with only the owners of 11 of 62 lots responding to request the meeting. Subsequently, forms completed in respect of two other lots supporting the request for a meeting were filed with Mr Russell's responsive submissions on 19 December 2008. Including all those responses supportive of Mr Russell, and having regard to the schedule of unit entitlements attached to the strata plan, only 14.5% of the aggregate unit entitlement, that is, 74 units out of a total of 510, supported the requisition, far short of the quarter or more of the aggregate unit entitlement required pursuant to Sch 1 by-law 11(3).
It is convenient to address the issues identified in the context of the above findings of fact.
Did Ms Jackson give Mr Russell verbal permission to install the airconditioner before he did so?
Yes, but the approval was on the basis that any new airconditioner unit would be positioned within the existing airconditioner cage.
Was a written agreement reached to settle the dispute?
There are three possibilities. One, is that there was an agreement reached by an acceptance of the terms contained in the letter of 18 December 2006. Second, that the responsive letter incorrectly dated 8 December 2007 constitutes a counteroffer which was accepted by the conduct of Mr Russell. Three, that there was no meeting of the minds and that although the parties thought that they had reached an agreement, they had not done so.
It is trite that a purported acceptance, which is conditional or proposes some new terms, will not bind the offeror but may be a counteroffer: see R A Brierley Investments Ltd v Landmark Corporation Ltd (1966) 120 CLR 224 and the discussion in the Laws of Australia, Thomson Reuters Legal Online at [7.1.580]. In this instance, the responsive letter referred fairly unequivocally to the removal of the airconditioner. It then refers hopefully to the removal of brackets, pipes and cables from the outside wall and to repair the damage caused, but then sets out separately after a hyphen the reference to installing the airconditioner inside the holding cage. Effectively, ignoring the portion expressed as a hopeful wish, this portion of the letter should be construed as if it read:
The Council of Owners are pleased that Mr Russell is now going to remove the split level airconditioner … and [to] install his airconditioner unit inside the holding cage, as that is all that has ever been requested that he do.
The history outlined in that letter confirmed that the airconditioning unit had to be inside the provided holding cage. It is sufficiently clear that the council of the strata company, under whose authority Ms Jackson wrote the letter, was maintaining that position. Notwithstanding the unfortunate reference in the strata company's solicitor's subsequent letter of 11 April 2008 to acceptance in good faith of Mr Russell's offer, the Tribunal finds that there was no binding acceptance of the offer contained in the letter dated 18 December 2006. The letter incorrectly dated 8 December 2007 constituted in law a counteroffer.
Further, as it was by January 2007 patently clear to everyone that Mr Russell's new airconditioning unit was too large to fit within the cage, the Tribunal also finds that there could be no acceptance by conduct of the strata company's counteroffer. It was clearly the new airconditioner which Mr Russell offered to move and which was the subject of the strata company's response or counteroffer. In the result, no binding settlement of the dispute was reached.
Orders as sought or stay?
This heading effectively encapsulates the third and fourth issues identified above, which are interlinked.
Based on the above findings of fact, and the Tribunal's determination that no binding agreement to settle the dispute was reached, the strata company has established that Mr Russell has carried out an unauthorised alteration to common property. Unless, therefore, there is some factor which militates against the exercise of the Tribunal's discretion, the strata company should be entitled to an order for removal of the airconditioner. In the circumstances, it is convenient to consider first, whether Mr Russell would have any prospects of succeeding with an application under either s 85 or s 94 of the ST Act, and if not, whether there is any other factor relevant to the exercise of the Tribunal's discretion which should cause the Tribunal to decline the relief sought.
Consent under s 85 of the ST Act
The above section empowers the Tribunal to make an order that a strata company consent to a proposal to effect, relevantly, alterations to common property, where the Tribunal considers that the strata company has unreasonably refused to consent to a proposal by the proprietor concerned to effect such alterations. Section 95 of the ST Act also refers to the Tribunal creating certain by-laws by making an order where the strata company has unreasonably refused to make the by-law.
In dealing with whether or not a strata company has unreasonably refused to do that which it allegedly should have done, the Tribunal has consistently taken an approach that the management of a strata company is best left to the strata company and that the Tribunal should not too readily impose its own views of what is unreasonable. See, for example, Hopkins and Clayton [2007] WASAT 255. At the same time, the legislature has intended that there be a practicable means of breaking deadlocks between the members of a strata company who are coowners of the common property, live often in close proximity, and who should desire to live in harmony with each other.
The Tribunal has fulfilled that role in circumstances where resolutions proposed to a strata company have failed whether due to the dissent of a single lot owner, or of a majority of lot owners, by examining the rationale for dissent to ascertain whether there is a sensible basis for dissent. This necessarily means that the Tribunal is drawn into a balancing of interests and views and must inevitably reach a subjective view of whether the decision is unreasonable. If that balance is delicately poised it will not be possible to conclude that the decision is unreasonable. It is possible for persons acting reasonably to come to opposite conclusions on the same set of facts.
In effect, this is to apply the ordinary dictionary definition of 'unreasonable' 1. going beyond the limits of what is reasonable or equitable. 2. not guided by or listening to reason: The Australian Oxford Dictionary, (2nd ed), Oxford University Press, Melbourne 2004. A decision is unreasoned if, as that term is defined in the same dictionary, it is not based on good sense or logic.That was also the approach taken by the former strata titles referee: see Campbell and The Owners of Rangeview Apartments [1988] WASTR 29. It is not the standard of reasonableness required by what is known as Wednesbury unreasonableness as adopted in the administrative law governing proper exercise of governmental power: Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 229. So it is not necessary that a decision be regarded as so unreasonable that no sensible lot owner or number of lot owners could have come to that conclusion.
Under s 35 of the ST Act, the strata company has the obligation to control and manage the common property for the benefit of all proprietors. Section 42(8) regulates the basis upon which a by-law may be passed granting the proprietor of a lot exclusive use and enjoyment or special privileges in respect of the common property or any part of it. Such a bylaw is required to be passed as a resolution without dissent or as a unanimous resolution, in the case of a two-lot scheme. It is, of course, open to the strata company to give a special privilege, or even exclusive use, of common property to an individual lot owner by way of a licence, but even a licence can only be granted by the strata company if the grant meets the requirement of s 35(1)(b) of the ST Act that the control and management of the common property is for the benefit of all the proprietors.
Some guidance on how a strata company should exercise control and management can be gleaned from the extent to which the ST Act regulates the manner in which a proprietor may effect an alteration to their own lot in a strata scheme. Section 7 of the ST Act, read with s 7B, requires that any structural alteration be approved by way of a resolution without dissent at a general meeting. There are, however, only limited grounds on which a proposal may be refused but one ground is that it will result in a structure that is visible from outside the lot and that is not in keeping with the rest of the development. The strata company relies on Hamilton v Thompson DCWA APP 154 of 1998 (Hamilton) as an illustration of how the court regarded that conduct which undermined the corporate governance of the strata company constituted a sufficient detriment to justify an order being made for removal of the offending works which constituted an alteration to a lot by the addition of a pergola.
Mr Russell's solicitors submit that no guidance can be obtained from Hamilton because it involved an application under s 7 of the ST Act and alterations to a lot, not to common property, and that an airconditioner, unlike a pergola, is not a structure within the meaning of the ST Act. Those submissions are rejected. Firstly, because the limited grounds on which an objection can be made to a proprietor seeking to alter a lot, makes it easier to gain approval for the alterations to a lot, than for an alteration to common property. See the requirements for an alteration to common property discussed in cases such as Sisto and The Owners of Glenway Gardens Apartments [2005] WASAT 282 and The Owners of Millpoint Strata Plan 11391 and Houston [2007] WASAT 9. Secondly, it cannot be assumed that the installation of an airconditioner is not a structure within the meaning of the ST Act: see Pluim and Willis [2007] WASAT 233 and Smith and City of Fremantle [2007] WASAT 153. In any event, the criticisms raised do not undermine the use of considerations relevant to the approval of alterations to a lot as a guide to the exercise of a discretion whether or not to approve an alteration to common property.
Insofar as the requirement that an alteration be in keeping with the rest of the development, the Tribunal has always adopted the principle that it is for the strata company, acting within its powers, to decide on the degree of uniformity in the external appearance of the development, either in total or in particular respects: see Verryt and Williams [2005] WASAT 101 following Strata Plan No 464 v Oborn NSW Strata Titles Cases 1979 90. The same principle was applied in considering whether or not a strata company had unreasonably refused to pass an exclusive use by-law relating to proposed alterations to common property in Crockett and Munroe [2006] WASAT 382.
In this case, there are different airconditioning units used in the commercial buildings within the parcel although the view of them is restricted. Also, there is complete uniformity in the size of airconditioners. However, in the case of the residential buildings facing onto the grassed area, there is a visual degree of uniformity with which, in the Tribunal's view, Mr Russell's airconditioner is not in keeping. It is significantly larger than all other units and that difference is exacerbated by the way in which it has been mounted.
In these circumstances, the Tribunal concludes that it cannot be said that the strata company has acted unreasonable within the meaning of s 85 of the ST Act.
Section 94 order granting licence
The Tribunal is empowered to order that a proprietor may use specified common property, in such a manner, for such purposes, and upon such terms and conditions, if any, as it may specify. However, s 94(2) of the ST Act precludes the Tribunal from making an order unless satisfied -
a)that the lot of which the applicant is proprietor is incapable of reasonable use and enjoyment unless the order is made; and
b)the strata company has refused to grant a licence to use common property in such a manner as would enable the proprietor or occupier to reasonably use and enjoy the lot.
Mr McGlasson's evidence is insufficient to establish that another airconditioner could not be installed in the cage which would service Mr Russell's lot in a manner comparable with the existing airconditioner. But, even if that was the case, the lot has been occupied for many years using an airconditioner which was clearly inferior to the new airconditioner. Given that period of use, it can hardly be demonstrated that the lot is incapable of reasonable use and enjoyment unless an order is made by the Tribunal under s 94 of the ST Act.
In any event, having regard to the conclusion that the strata company has not acted unreasonably in refusing to allow the airconditioner to remain, the Tribunal is not disposed to exercise any discretion in favour of making any order as contemplated by Mr Russell under s 94 of the ST Act .
Other Factors relevant to the exercise of discretion
There is some validity in points made by Mr Russell's counsel as to the good characteristics of the airconditioner and there is no doubt that at some time, probably in the not too distant future, many of the original airconditioners will need to be replaced. However, the suggestion, or indication in the closing submissions for Mr Russell that he is willing to have a cage made to be placed over the airconditioner, would be of little assistance at the present time because that would only make the difference in its size more obvious.
It is also true, as submitted, that Mr Russell will suffer hardship and disadvantage if required to remove the airconditioner. However, on the Tribunal's findings, this is a consequence which he has brought on himself. He must have known at the time when he first installed the airconditioner that he was installing it in a location which, even on his own version of events, was not in accordance with the consent given by Ms Jackson. On the Tribunal's findings, the consent given was for an airconditioner to be installed within the existing cage.
It is submitted for Mr Russell that if his evidence on the terms of the original consent is not accepted, which is the case, that there was confusion over the terms. The possibility does exist that Mr Russell was confused about the requirement to locate the air-conditioner within the cage rather than, on his version of events, in the same position as the old air-conditioner. But it is his obligation to obtain the consent of the strata company and it was his choice to seek and act on oral consent. There was no confusion on the part of Ms Jackson. In any event, on the Tribunal's findings Mr Russell agreed on 11 November 2005 to remove the airconditioner and there was no confusion on his part from that time of what was required by the strata company, if indeed he ever was confused. It is at least as equally possible that he was never confused but thought he would not be taken to task. That possibility is supported by Mr Russell installing the air-conditioner in its initial position knowing that he had no consent to place it as he did.
The exchange of correspondence which resulted in both parties thinking that the matter was settled is unfortunate, but in the circumstances the Tribunal regards that as neutral factor. Ultimately, either a settlement was reached or, as the Tribunal has held, there was no settlement.
Unlike the Hamilton decision, there is no significant number of lot owners in the immediate vicinity of Mr Russell's Lot 23 who support him. Mr Russell's attempt to engender enough support to call an extraordinary general meeting to deal with the matter was unsuccessful.
The submissions made for Mr Russell to the effect that the strata company has suffered no hardship or disadvantage by the installation of the airconditioner is not accepted. As illustrated by the Hamilton decision, the disadvantage lies in the impact which the circumstances of the case would have on the governance of the strata company. Mr Chatfield's statement reflected that there had been difficulty with unauthorised installations in the past. While Mr Russell went through the motions of obtaining a form of consent from Ms Jackson, he paid little heed to it. He is the architect of his own misfortune.
Having regard to all of the circumstances of the case the Tribunal concludes that it should exercise its discretion in favour of the grant of the relief sought by the strata company, subject to the considerations discussed under the following heading.
Conclusion and order
For the above reasons, it follows that the strata company is entitled to an order that the existing airconditioner be removed by Mr Russell and the Tribunal will make an order without any stay of the proceedings to permit Mr Russell to make an application under either s 85 or s 94 of the ST Act. The Tribunal does not, however, regard it as appropriate to incorporate in the order sought an obligation that Mr Russell replace the airconditioner, if that is what is intended by the application. It is appropriate that Mr Russell install an airconditioner containment cage so that the general outward appearance is the same as the other lots facing the grassed area. However, it is a matter for Mr Russell as to whether or not he may wish to install an airconditioner, subject of course to his obligation to obtain consent for any installation from the strata company. It is also not considered appropriate to make an order that the work be completed within 14 days as sought in the application. That is too short a period to allow for the job to be properly organised and for competent tradespersons to be engaged, particularly at this time of the year. Further, the time period should be sufficient to enable Mr Russell to obtain advice on this decision, should he wish to do so, so that he is able to lodge an appeal to the Supreme Court and apply to that court for a stay of the Tribunal's order, if so advised. Further, the obligation to be made good should be capable of objective assessment. It is not appropriate to make an order as sought that damage be made good to the satisfaction of the strata company's council of owners.
There is one final matter on which the Tribunal should comment, and that is the submission made by Mr Russell's solicitors in relation to costs. The submission correctly refers to the limited circumstances in which the Tribunal may order costs and acknowledges that those circumstances do not apply so that no costs order can be made. The submission then proceeds to refer to the strata company's Sch 2 by-law 15 relating to the recovery of the costs of legal proceedings. The by-law permits the recovery of legal costs incurred by the raising of a levy against a proprietor who has been unsuccessful in legal proceedings against the strata company. It is submitted for Mr Russell that the by-law is invalid as inconsistent with the provisions of the SAT Act and the ST Act. The strata company has responded to those submissions by correctly observing that the issue was not raised in the proceedings. It is not appropriate that the Tribunal express any view on the validity of the by-law. If the strata company endeavours to enforce the bylaw it will be open to Mr Russell to apply under s 93 of the ST Act and seek an order invalidating the by-law.
The Tribunal will accordingly issue orders as follows:
1.On or before 13 February 2009 the respondent, at his cost and risk in all respects, must remove from the exterior surface of the building in which Lot 23 on strata plan 17133 is situated, the airconditioner and all associated wires, cables, ducting, brackets and other material installed by him or on his behalf and immediately thereafter:
(a)replace the airconditioner containment cage which was previously fixed to the building, or install a new cage similar in appearance and dimensions to the original cage; and
(b)make good any damage caused to the wall of the building by the installation and removal of those items and any previous items that he has, or has arranged to have, attached to the exterior of the common property wall of the building concerned.
I certify that this and the preceding [80] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR C RAYMOND, SENIOR MEMBER
8
2