The Owners of Millpoint Strata Plan 11391 and and Ors

[2007] WASAT 9

THE OWNERS OF MILLPOINT STRATA PLAN 11391 and & ORS [2007] WASAT 9

Jurisdiction:	STATE ADMINISTRATIVE TRIBUNAL	Citation No:	[2007] WASAT 9
Act:	STRATA TITLES ACT 1985 (WA)
Case No:	CC:447/2006	Heard:	DETERMINED ON THE DOCUMENTS
Coram:	MR C RAYMOND (SENIOR MEMBER)	Delivered:	15/01/07
No of pages:	18	Judgment Part:	1 of 1
Result:	Application successful
Category:	B
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Parties:	THE OWNERS OF MILLPOINT STRATA PLAN 11391 KENNETH I HOUSTON VICKI R HOUSTON
Catchwords:	Strata titles Unauthorised alterations to common property Application for reinstatement to original design
Legislation:	State Administrative Tribunal Act 2004 (WA), s 85 Strata Titles Act 1966 (WA) Strata Titles Act 1985 (WA), s 3AB, s 3(1), s 3(2), s 7, s 7A, s 7(2), s 35(1), s 35(1)(c), s 42(8), s 42(10), s 42(11)(a), s 79(2), s 81(7), s 81(10), s 83, s 85 Strata Titles Amendment Act 1966 (WA) Strata Titles Regulations 1985 (WA), reg 30, reg 31, reg 32, reg 33, reg 35
Case References:	Armstrong-Burgin and The Owners of Colleran Court - Strata Plan 7199 [2005] WASAT 188 Gadenna & Anor and Cazzolli [2004] WASTR 13 MA and NG Smits v JA Secker ST 2003 – 000096 Moser and the Owners of Wembley Glades – Strata Plan 11303 [2005] WASAT 289 Rucci & Anor v The Owners of 95 Mandurah Terrace – Strata Plan 2061 [2002] WADC 33 Sisto and The Owners of Glenway Gardens Apartments [2005] WASAT 282 Nil
Orders	1. On or before 15 April 2007, the respondents must, at their cost, ensure that the items of common property, comprising the balcony outside the lot and the external walls of their lot, are reinstated to the original designs for the building, provided that the reinstatement of the enclosure of the north-western section only of the balcony may be excluded from the operation of this order, or the degree of reinstatement varied, in accordance with any written authority from the strata council of the applicant, received by the respondents on or before 15 February 2007, approving the style and design of a partial enclosure as permitted under Sch 1 by-law 20.,2. Pursuant to s 81(10) of the Strata Titles Act 1985 (WA), order 1 shall continue to have force and effect beyond the expiration of a period of two years that next succeeds the making of this order.,3. The application for costs is dismissed.

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : STRATA TITLES ACT 1985 (WA) CITATION : THE OWNERS OF MILLPOINT STRATA PLAN 11391 and & ORS [2007] WASAT 9 MEMBER : MR C RAYMOND (SENIOR MEMBER) HEARD : DETERMINED ON THE DOCUMENTS DELIVERED : 16 JANUARY 2007 FILE NO/S : CC 447 of 2006 BETWEEN : THE OWNERS OF MILLPOINT STRATA PLAN 11391

Applicant

AND


KENNETH I HOUSTON
VICKI R HOUSTON
Respondents

Catchwords:

Strata titles - Unauthorised alterations to common property - Application for reinstatement to original design

Legislation:

State Administrative Tribunal Act 2004 (WA), s 85

Strata Titles Act 1966 (WA)

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Strata Titles Act 1985 (WA), s 3AB, s 3(1), s 3(2), s 7, s 7A, s 7(2), s 35(1), s 35(1)(c), s 42(8), s 42(10), s 42(11)(a), s 79(2), s 81(7), s 81(10), s 83, s 85
Strata Titles Amendment Act 1966 (WA)
Strata Titles Regulations 1985 (WA), reg 30, reg 31, reg 32, reg 33, reg 35

Result:

Application successful

Category: B

Representation:

Counsel:

Applicant : Mr R Lutz Acting as Agent
Respondents : Mr R McCallum

Solicitors:

Applicant : N/A
Respondents : McCallum Donovan Sweeney

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

Armstrong-Burgin and The Owners of Colleran Court - Strata Plan 7199 [2005] WASAT 188
Gadenna & Anor and Cazzolli [2004] WASTR 13
MA and NG Smits v JA Secker ST 2003 – 000096
Moser and the Owners of Wembley Glades – Strata Plan 11303 [2005] WASAT 289
Rucci & Anor v The Owners of 95 Mandurah Terrace – Strata Plan 2061 [2002] WADC 33
Sisto and The Owners of Glenway Gardens Apartments [2005] WASAT 282


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REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

1 The applicant has applied for orders for the removal of unauthorised alterations effected by the respondents to common property. The nature of the alterations was such that part of the external balcony, being common property to which the respondents were entitled to exclusive use and enjoyment, was physically incorporated into, and formed part of, the respondents' dining room/lounge room. For all intents and purposes, except legally, the alteration appeared to form part of the respondents' lot. The alterations also incorporated the enclosure of the north-western portion of the balcony using fixed pane glass. The by-laws permitted the enclosure of this portion of the balcony, subject to the style and design being approved by the strata council.

2 An extraordinary general meeting of the strata company was called to consider resolutions proposed by the respondents designed to permit the alterations to remain. The motions were defeated by nine votes for to eight against in respect of a resolution without dissent, and in respect of the other alternative forms of resolutions by eight votes for to six against (one owner being unfinancial and therefore being entitled to vote only in respect of the resolution without dissent).

3 The Tribunal considered that the alterations were externally in keeping with the building and that, in the light of the decision of the City of South Perth that a previous planning approval applied and that it did not require the alterations to be removed, the alterations would not result in any risk of loss of insurance cover if the Tribunal were to permit the alterations to remain. The parties had agreed that if, on all the facts, the Tribunal considered that it appeared that it was an appropriate course, the application would be adjourned, to enable the respondents to make application to the Tribunal under s 85 of the State Administrative Tribunal Act 2004 (WA). This was agreed because there was an issue as to whether the approvals given by the City of South Perth had been provided on a wrong basis, and could be impugned in some way. If necessary, that was therefore an issue which could be dealt with under the s 85 application.

4 The Tribunal concluded that the applicant was entitled to an order for the removal of the alterations and reinstatement of the property to its original design. This was because the nature of the alterations was such that concerns about proper governance of the applicant strata company, and the avoidance of varied forms of enclosure of balconies precluded any

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approval of the alterations by the Tribunal. It remained open to the respondents to seek approval of the style and design of the north-western portion of the balcony pursuant to Sch I by-law 20 of the strata company. The Tribunal issued orders for reinstatement subject to any such approval, and providing for an extended period for the removal of the alterations. The Tribunal refused an application for costs, as it was not permitted to make such an order under s 81(7) of the Strata Titles Act 1985 (WA).

The application

5 On 21 March 2006, the applicant commenced proceedings in the Tribunal seeking the following orders under s 83 of the Strata Titles Act 1985 (WA) (ST Act). All references to sections of legislation hereafter are to the ST Act, unless expressly stated otherwise.

1. The proprietors of Lot 9 on Strata Plan 11391 must within 60 days from the date of this order, at their cost, ensure that the items of common property, comprising the balcony outside the lot and the external walls of their lot, are reinstated to the original designs for the building.

2 Order 1 shall not cease to have any force or effect upon the expiration of the period of two years that next succeeds the making of this order.

3 The applicant shall be entitled to recover all costs incurred in this matter from 12 October 2005 until the respondents have complied with order 1 or paid the applicant's costs, whichever comes last.

6 The grounds set out in support of the applications assert that while the respondents were making renovations and alterations to their newly acquired unit - being Lot 9 on the said strata plan - in 2005, they removed two exterior walls, enclosed part of the common property balcony and raised the level of the enclosed balcony to that of the living/dining rooms, thereby extending those rooms.

7 The respondents have not denied the grounds relied upon and, in essence, rely on circumstances more fully canvassed below to submit that no other owners within the strata scheme will suffer any detriment if the Tribunal declines to make the order sought.

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Background and relevant facts

8 Strata Plan 11391 was registered on 31 March 1983, and consists of a brick and tile eight storey building comprising 16 strata lots, together with common property and exclusive use common property areas relating to car bays and balconies. A notification of change of by-laws No G804938, registered on 28 May 1998, added a number of by-laws, including By-law 20, which gives permission to the owners of Units (Lots) 3, 5, 7, 9, 11, 13 and 15 to enclose the north-westernmost section of their balcony, to a style and design to be approved by the strata council.

9 A letter provided by the applicant from Alexander Planning Consultants, dated 8 June 2005, describes the property as follows:

"The No. 16 Millpoint is a very attractive, 1980's block of apartments situated on the riverfront in South Perth.

The position of the apartments provides the ultimate in lifestyle environment, but most of all the location offers unrivalled views of the city and Kings Park across the river.

The large balconies with the 180 degree views provide opportunity for an attractive, sheltered, al fresco style setting, which is desirable and very popular."

10 The respondents are the owners of Lot 9 (Unit 9), which is on the fourth floor of the building. The lot is approximately triangular in shape, with the base of the triangle facing north towards the city. The base is not a straight line but includes a north-facing peak. The balcony consists of a narrow corridor to the west of the peak, with a wider area on the eastern side.

11 The alterations carried out by the respondents comprise the following works:

(a) The north-western side of the balcony has been enclosed, purportedly in accordance with by-law 20, but this is disputed by the applicant because there is no sliding glass panel provided consistent with other enclosures carried out, and the applicant has not approved the enclosure in the form in which it was effected.

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(b) The height of the floor of the narrow section of the balcony, up to a line with the approximate north-east boundary of the lot, has been raised.

(c) The glass panels, setting the approximate north-west boundary of the lot, bordering on the wide area of the balcony, have been removed and replaced with glass panels, including a sliding door, which extend to join the now enclosed narrow section of the balcony.

(d) The floor covering in the lounge/dining room has been extended to the raised section of what was previously the narrow part of the balcony so that, to all intents and purposes, the lounge/dining room extends to what was previously the north-western portion of the balcony.

12 There is no dispute that the alterations have been carried out in a tasteful and aesthetically pleasing way, and that there is no effect on the structural integrity of the building. However, the applicant does contend that, viewed externally - and in particular at night - the alteration is not in keeping, because window coverings on all other units are set back from the outer glass face of the building, while they are not, in respect of Lot 9.

13 Pursuant to the definitions of "floorplan", and "lot" set out in s 3(1), read with s 3(2), and as s 3AB thereof does not apply, the vertical boundaries of the lot extend to the inner surface of each wall. The definition of "wall" includes a door, window or other structure dividing a lot from common property. The vertical boundary of the lot is the inner surface of a wall only where the wall corresponds substantially with a line on the floorplan which marks the vertical boundary. As the floorplan has not altered, neither have the boundaries of the lot. The alterations made are therefore entirely to the common property.

14 At the initial directions hearing, the Tribunal stressed the need for the respondents to obtain legal advice, because as presented, there appeared to be no answer to the application.

15 I carried out a view of the property on 30 June 2006. Immediately following the view, I encouraged the parties to exhaust all possible steps which might result in a resolution of the matter. To that end, agreement was reached between the parties to the effect that an extraordinary general meeting (EGM) would be held, that the respondents would put forward all possible resolutions which might resolve the matter satisfactorily, that those proposed resolutions would be considered at the EGM, and that

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the notice of the meeting would include a position statement from the respondents, together with a response thereto from the strata council. This course was followed and resulted in an EGM being held on 28 September 2006.

16 At the EGM, four motions were put to the meeting. The first motion was for the passing of a Sch I by-law permitting the alteration, providing that the registered proprietors of Lot 9 bear the sole responsibility for repair and maintenance of the improvements carried out, and imposing liability for any damage of property or injury of a person caused or contributed to by the improvements to such registered proprietors, and expressly providing that no other alterations be made to the Lot 9 common property without written consent of the strata company. The second motion was to much the same effect but on the basis that the by-law would constitute a Sch II by-law. Motions 3 and 4 provided, respectively, that the alterations be approved by a majority of lot proprietors, and that the strata company consents to the alterations, and to the alterations remaining and not being removed or returned to their original condition. The first motion was defeated by a vote of nine for and six against. The second, third and fourth motions were defeated each by a vote of eight for and six against (one owner being unfinancial and therefore being entitled to vote only in respect of the resolution to be passed without dissent).

17 At a final directions hearing following the EGM, the parties agreed that it was appropriate to determine the matter on the documents. The applicant raised one qualification. The applicant acknowledged that the respondent had received correspondence from the City of South Perth indicating that it would take no action in respect of the alterations because they had been effected without a building licence being obtained, on the basis that the previous planning approval relating to the partial enclosure of balconies on the north­west side of the building remained operative, because some balconies had been enclosed within a two year period. The applicant was investigating with the Council of the City of South Perth as to whether it had acted on an incorrect premise, and in particular, whether the plot ratio was adversely affected by the alteration.

18 In the circumstances, it was agreed that the Tribunal would proceed on the documents, which included the letter from the City of South Perth, but if it considered that there was a case for it to intervene in support of the respondents, the Tribunal would decline to make a final order, and would adjourn the application to enable the respondents to bring an

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application under s 85 of the ST Act, with a view to showing that the proposals put forward in respect to the common property, and dealt with at the above EGM, were unreasonably refused. The applicant would have an opportunity to put forward any material it wished to rely upon to impugn the decision made by the City of South Perth that it did not require the alterations to be removed in any such further proceedings. The applicant desired to proceed in this way because it maintained that nothing had been established by the respondents in the material before the Tribunal which would warrant the Tribunal not making the orders sought.

The parties' contentions

19 The applicant contends that the respondents proceeded with the alterations knowing that prior approval of the strata company was required, and deliberately proceeded, relying thereafter on sympathy and the cost of restoring the works to achieve their ends. No approval had been sought from the applicant, and that, in any event, it was not appropriate to approve such alterations, either beforehand, or retrospectively. This was because the respondents were defeating the property rights of other owners who owned the common property as tenants in common, there was a risk that the insurance underwriters might be able to avoid cover in respect of any claim related to the altered works, the alterations were not in keeping with the rest of the building, particularly at night as referred to above, and in any event, because the correct procedures had not been followed, and if the alterations were now permitted, it would set an unfortunate precedent which could result in other owners in the future following a similar course.

20 The respondents contended, in summary form, that planning approval had been obtained, by-law 20 allowed the enclosure of the balcony without further approval, that the enclosure is "in keeping" with the building, that there is no detriment to any other proprietor, that safety was a factor in relation to the alterations, and that the lot proprietor has the power to carry out such work for exclusive work areas. Further, that there is no benefit to anyone in the removal and reinstatement, that there would be a considerable cost and inconvenience to the respondents in doing so, that the works were structurally sound, there were no insurance issues and that a number of lot proprietors consented to the work, and more than one half of them do not want to have the altered works removed and the property reinstated.

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21 The respondents' solicitors made further submissions based on a number of cases decided either by the former Strata Titles Referee (Referee) or this Tribunal, all of which have been considered and are referred to further below.

22 The applicant filed additional documents by way of a reply to the respondents' additional response. The reply raises and seeks to contradict comments made by the respondents at a directions hearing, on 25 May 2006, that they were unaware strata company approval was necessary for the alterations. The respondents have disputed the assertions made by the applicant by way of a further submission. I do not consider that this particular dispute can be resolved on the documents. If it is not possible to come to a view that the applicant is entitled to the orders sought, without determining this factual dispute, then that is a factor relevant to a decision not to grant relief at this stage, to enable the respondents to bring an application under s 85 of the ST Act. Both proceedings could then be set down together for an oral hearing so that there is an opportunity to cross-examine witnesses on this issue.

Considerations

23 Account has been taken of all documents filed on record, including submissions received from persons who were notified of the applications pursuant to s 79(2), being P Moffatt, owner of Lot 5, WF and MF Maber, owners of Unit 4, and L Hutchinson (who is understood to have responded on behalf of the Hutchinson Family Trust) owner of Lot 13, all in favour of the respondents being able to maintain the alterations made. However, ultimately their support is reflected in the voting which occurred at the EGM. It is also noted that the respondents filed with their additional response standard form consents signed by the proprietors of Lots 2, 4, 5, 6, 9, 10 (although qualified), 11, 12 and 13, which reflect a consent to the work carried out and to that work remaining. Again, that support is reflected in the voting which occurred at the EGM.

24 The ST Act and the Strata Titles General Regulations 1996 (WA) (Regulations) contain specific provisions stipulating the means by which a lot owner must seek approval for structural erections, alterations and extensions of a structure on a lot in a strata scheme or in a survey strata scheme: s 7 and s 7A and reg 30 to reg 35 of the Regulations. There are no equivalent provisions in relation to any proposal for alterations to common property. The consent to alteration to a lot of this nature requires the consent of the strata company by resolution passed without dissent.

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25 Section 35(1) reflects the duty of the strata company to control and manage common property for the benefit of all proprietors, and to keep the common property in good and serviceable repair, properly maintained, and where necessary, renew and replace the common property. Section 42(8) empowers a strata company to make a by-law conferring exclusive use and enjoyment of, or special privileges in respect of, the common property or any part of it in favour of the proprietor of a lot. Any such by-law operates, by virtue of subsection 42(10), for the benefit of the proprietor, occupier and any other resident of the lot for the time being.

26 The by-laws of the strata company grant all owners exclusive use of the balconies adjoining their respective lots (Sch I by-law 16 as added by notification of change of by-laws No G326356, registered on 13 November 1996). That by-law was further amended by notification No G752781, registered on 31 March 1998, in terms of which specific privileges were granted to the proprietor of Lot 16 to fit roller shutters and an enclosed patio structure on Level 8 - the rooftop - in accordance with the identified plan. As already mentioned, a number of additional Sch I by-laws were added by notification No G804938, registered on 28 May 1998, including by-law 20, which granted the right to particular owners, including the owners of the respondents' Lot 9, to enclose the north-western section only of their balconies.

27 The respondents have referred to an earlier decision of the Referee in MA and NG Smits v JA Secker ST 2003 – 000096, and point out that the Referee, at par 62, considered that the doors that were constructed by the lot proprietor on common property were either replacing original walls of the building or, as was claimed by the proprietor, constituted additions to part of the common property over which the proprietor of that lot had been granted exclusive rights and special privileges. The submission is not fully developed, but if it is intended to suggest that the case stands as authority for a later submission that the owners of Lot 9 were entitled to effect alterations to the common property over which they had been granted a right of exclusive use and enjoyment, that proposition is not accepted. The Smits case was based primarily on a finding that the strata company had approved the alterations in question (par 72).

28 While it may be open to a strata company to grant exclusive use and enjoyment in terms which might permit an owner to carry out alterations to the common property in very wide terms, the by-laws applicable to the applicant company are not so expressed. The express inclusion of by-laws which permit particular alterations to common property, subject

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to exclusive use and enjoyment, support a construction of the by-laws as requiring approval for any alterations, other than those expressly permitted, consistent with the principle of construction that the express inclusion of one matter impliedly excludes others.

29 In any event, even if assistance could not be gained from additional by-laws, as in this case, I do not consider that a general grant of exclusive use, without more, constitutes an authority for an owner entitled to the benefit thereof, to alter the common property as he or she sees fit. Section 42(11)(a) provides that unless excused by the by-law (an exclusive use by-law), the proprietor of the lot for the time being is responsible for the performance of the duty of the strata company under s 35(1)(c) in respect of the exclusive use common property. Section 35(1)(c) reflects a duty to keep in good repair, maintain and, where necessary, to renew and replace. It does not authorise the carrying out of alterations to the common property. Further, in the absence of words within the grant which clearly provide for a power to carry out alterations, the existence of such powers would be inconsistent with the controls and processes which must be followed when an owner wishes to effect a structural alteration to his own lot in relation to which an owner has greater rights than rights to exclusive use of common property.

30 The respondents also rely on Moser and The Owners of Wembley Glades – Strata Plan 11303 [2005] WASAT 289. It is pointed out there that the by-law in question granted exclusive use, but expressly excluded any right to alter, modify, erect or carry out any improvements on the common property for which exclusive use has been granted, without first receiving the written approval of the strata company. With respect, that express restriction, which in my view was inserted out of abundant caution, does not mean that the omission of those words of restriction convey with the grant of exclusive use, the right to alter or modify. In my view, exclusive use, without more, conveys no more than a right to avail oneself of what is there, to the exclusion of the other owners as tenants in common.

31 Reliance is then placed by the respondents on Gadenna & Anor and Cazzolli [2004] WASTR 13 in which exclusive use rights were granted over common property, other than the common property driveway which provided access to the garages forming part of the four lots. In effect, the exclusive use related to the outer half of walls and ceilings of each lot which were common property by virtue of the operation of the Strata Titles Act 1966 (WA), under which the scheme was first registered. The ST Act, which repealed the 1966 Act in 1985, expanded the common

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property by making the internal surface of the floor, ceiling and walls the boundary of a lot. The Strata Titles Amendment Act 1966 (WA) then extended the lot to the external surfaces of the building, except that where any of the lots have a common or party wall, the boundary of that lot continued to be the centre point of the wall. Accordingly, the adoption of a by-law by the strata company in 1987 granting exclusive use rights over common property, excluding the driveway, operated only in respect of the party walls which existed between the lots. A lot owner had made alterations to a lot by adding a roller door, which is not relevant to the matters under consideration in this application, but also had a wrought iron fence and gate installed. The precise location of the fence and gate is not explained in the reasons for decision, and it is therefore not clear that the matter is dealing with alterations to common property the subject of an exclusive use grant.

32 In any event, assuming that the installation of the fence and gate related to exclusive use common property, that was not a consideration which motivated the Referee not to order removal of the works. The Referee rationalised that the works had been carried out for the purposes of improving the security of the parcel, that all owners benefited thereby, and that the strata company would have been entitled to carry out the work, under its obligations to manage and control the common property, if a simple majority of owners were in favour. In that case, four out of five owners opposed the application brought by one other owner to have the works concerned removed.

33 The respondents, after referring to the Gadenna decision, submitted that common property can be altered by a simple majority, where the alterations are to address security and safety problems, and that the respondents' enclosure and removal of glass partitions was to prevent their children from having unimpeded access to the balcony. Accordingly, it is submitted for the respondents that the enhanced security and safety is a relevant consideration. If this is correct, and as a majority of owners do not require the reinstatement of the alterations, this would be a significant factor in favour of the respondents.

34 The applicant's reply responds to this point by stating that there were previously three doors to the balcony, and that there are now two doors which give access. It is further stated that any safety concerns could have been addressed by installing locks to the sliding windows, which are required by the applicant as part of the standard and authorised enclosure of the north-western portion of the balcony, and by installing locks to the sliding doors.

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35 In my view, the alterations cannot reasonably be characterised as alterations carried out to address safety or security issues. Any such issues could be addressed in the manner suggested by the applicant. The purpose of the alterations is obvious, and that is to enhance the functionality of the lounge/living room by increasing their size, and to create a sense of space and flow between the lounge area and balcony by removing the pokey north-western portion of the balcony and incorporating it within the living/lounge area.

36 Once this conclusion is reached, then consistent with the principles discussed in cases such as Gadenna above, Rucci & Anor v The Owners of 95 Mandurah Terrace – Strata Plan 2061 [2002] WADC 33 and Sisto and The Owners of Glenway Gardens Apartments [2005] WASAT 282, alterations to the common property cannot be approved by a simple majority through the budgetary process, at least on the grounds of the works being required to address safety and security problems. Further, in my view, it cannot be contended that such alterations could be approved by simple majority, on the basis that the alterations accord with the reasonable expectation of members of the strata company as a whole, in accordance with the principles canvassed in Sisto, in circumstances in which six out of fifteen owners require the offending works to be removed. Indeed, the respondents have not endeavoured to justify their position on this basis.

37 The respondents also seek to rely on the decision in Armstrong-Burgin and The Owners of Colleran Court - Strata Plan 7199 [2005] WASAT 188, but, in my view, that was something of a unique case, and the circumstances are very easily distinguished from those in the present matter.

38 In Armstrong-Burgin, the parcel comprised five lots. The strata company was, to all intents and purposes, dormant. Although the garden areas were all common property, each lot owner had fenced off the areas adjacent to his or her lot.

39 There had been for some years a practice whereby an owner proposing work would seek and obtain the oral consent of each of the other lot owners. The applicant believed that he had obtained that consent before commencing works but was then faced with an objection from one of the other four lot owners. All other lot owners supported the proposed works, which involved the construction of a deck. In those circumstances, the Tribunal considered that insurance concerns were not real, because the obligation to insure in relation to common property already existed, and

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any concerns applied, in any event, to the existing de facto exclusive use by each lot owner of the fenced areas of all lots. The decking was to be wholly contained within this area of common property adjacent to the applicant's lot. The Tribunal examined each concern raised by the objecting owner and found there to be no merit in any of them. In those circumstances, the Tribunal considered that it was appropriate to grant relief under s 85 of the ST Act on the basis that it was unreasonable for the strata company not to approve the proposal. That is a very different situation to that in which the parties find themselves in this matter. Here, the effect of the alterations carried out by the respondents is that what was common property has become a de facto part of the respondents' lot.

40 I turn to consider whether there are any other circumstances which could form a basis for the respondents to mount a case for relief under s 85.

41 In that process, any matter is relevant if it bears upon the reasonableness or otherwise of the refusal of the strata company to pass the resolutions proposed by the applicants at the EGM.

42 The following are factors which favour the respondents:

1. For practical purposes, and until there is an opportunity for both parties to provide all relevant evidence, the City of Perth has advised the respondents that it considers that the previous planning approval provided to cover the partial enclosure of the north-west balconies continues to apply, and it will not take action for the removal of the works.

2. Based on my view of the property, the enclosure of the balcony, when viewed externally, is sufficiently in keeping with the remainder of the building. I note that the applicant's case is that the difference is most noticeable at night, because the applicant's window dressings are immediately within the north-western glass side of the balcony, whereas in the other lots, the window dressings are set back by the width of the balcony at that point. On its own, I do not consider that this difference is sufficiently material to warrant removal of the alterations, but it remains a factor to be taken into account on an overall basis.

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3. Except in a management context, to which further reference will be made, the alterations do not affect any other lot owner in a practical way, and in that sense also, there is no benefit to other owners in the removal of the works and reinstatement to its original condition.

4. Although not quantified, I accept that there may be a significant cost, and certainly inconvenience, to the respondents in returning the works to its original state.

5. The alterations have not affected the structure of the building in any way.

6. Unless there is some way of challenging the validity of the "approval" given by the Council of the City of Perth, there does not appear to be any real insurance issue, particularly if the appropriate relief were to be given by this Tribunal to the respondents under s 85. Given the basis upon which this matter has proceeded for determination on the documents, it is appropriate to assume that no insurance issue will arise, because the only evidence is that the insurers would avoid liability if damage or loss flows from any illegal or unauthorised works.

43 The following factors support the grant of the application:

1. The alterations cannot be justified on the basis of safety and security. The strata company could not have approved the works by way of a simple majority, nor were the respondents entitled to carry out the alterations because they are entitled to the exclusive use and enjoyment of the balcony.

2. This case differs markedly from the more common situation in which an owner carries out unauthorised improvements to common property, because alterations of that type do not alter the lot itself. In this case, common property has effectively been incorporated into the lot, for all practical intents and purposes, although legally, the boundaries of the lot remain as shown on the registered floor plan.

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3. A significant number of owners, that is, six out of 15, favour the removal of the unauthorised alterations.

4. The circumstances of this case, involving the effective incorporation of common property within the lot, are at the extreme end of the scale of circumstances within which it might be argued that the strata company has acted unreasonably in not consenting to a proposal which allows the alterations to be legitimised in one form or another, and therefore, the question of precedent cannot be ignored. This is particularly so when the effect of the alterations is to considerably enhance the amenity of the respondents' lot, must positively affect the value of the lot, and some other owners are likely to wish to emulate the alterations.

5. The building is in a prestige location and the strata company operates under a proper level of governance, in which owners show interest.

44 It is necessary to weigh all of the above factors. It cannot be said that other lot owners will suffer no detriment. All lot owners have an interest in the proper governance of the strata scheme. The building is in a prestige location, and the activities of the council of owners and members of the strata company, as reflected in the various minutes of meetings which have been presented to the Tribunal, reflect a sophisticated level of management and a healthy interest by owners in such governance. There are owners who support the respondents, and their motives for doing so may differ. At least one, the owner of Lot 5, indicated in his response, in the capacity of a notified person, that he would be interested in doing the same alterations. Any process by which the Tribunal therefore approves the alterations remaining, would set a precedent for the building, and could create considerable difficulties in the management of the strata scheme.

45 The letter from Alexander Planning Consultants, referred to above under the heading "Background", was addressed to Mr White who, it appears from minutes of meetings of the strata council, was probably then a member of the council. The letter reflects advice, apparently for the benefit of the strata company, concerning the caution to be exercised in allowing enclosure of balconies so as to ensure that design priorities were recognised to enhance the building and avoid a "hit and miss" approach. The letter is dated 8 June 2005, prior to the enclosure of the

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Lot 9 balcony, and is obviously not directed to addressing the circumstances of those works. But whatever the purpose of the letter, and regardless of whether the inferences as to its purpose and the capacity in which Mr White received it are correct, the design concerns expressed are valid, and reflect the present desire of the strata council for proper approval processes to be followed. Those owners requiring removal of the alterations are entitled to be concerned that their rights, limited as they may be, could be taken from them against their will, without proper processes being followed.

46 The partial enclosure of the north-west portion using fixed pane glass is not, in itself, as significant an issue as the effective incorporation of that area into the lot. The respondents contend that the applicant has not sought the reinstatement of this part of the works. I do not accept that to be so. The correspondence from the applicant dated 26 October 2005 and dated 20 December 2005 (Attachments 4 and 13 to the application) called for reinstatement of the common property to its former condition, except for the partial enclosure permitted under by-law 20. The consistent complaint raised by the applicant is that the partial enclosure was not in accordance with by-law 20 because fixed panes of glass had been used, whereas the style and design of all previous enclosures approved had required sliding windows to facilitate cleaning. The orders sought in the application removed any doubt as to what was intended by calling for reinstatement to the original design of the building. Having regard to the concern to ensure that any enclosure of the balconies is not conducted in a "hit and miss" fashion, the prestige nature of the development and the level of management under which the scheme is operated, which is presumably endorsed by owners through the election process of the office bearers and council members, I do not consider it would be appropriate to allow the enclosure to remain. Taking all factors into account, I do not consider that it can be said that the strata company acted unreasonably in rejecting the proposals put forward at the EGM.

47 In the premises, the applicant is entitled to the removal of the alterations and reinstatement to the original design. I will, however, provide sufficient time for the respondents to seek approval for a varied design for the enclosure, and formulate an appropriate order, so that an enclosure consistent with by-law 20 can be maintained, thereby avoiding any works being removed unnecessarily. I also take note that the state of the building industry is such that it may not be possible to carry out the necessary work for some time, and I will therefore issue an order which provides for an extended time within which the removal must be completed.

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48 The application includes an order for payment of costs, but pursuant to subsection 81(7) of the ST Act, the Tribunal is not permitted to make any order for payment of costs, except in limited circumstances which are not applicable to this matter. The Tribunal therefore dismisses the application for an order for costs.

Order

49 For the above reasons, the Tribunal orders as follows:

1. On or before 15 April 2007, the respondents must, at their cost, ensure that the items of common property, comprising the balcony outside the lot and the external walls of their lot, are reinstated to the original designs for the building, provided that the reinstatement of the enclosure of the north-western section only of the balcony may be excluded from the operation of this order, or the degree of reinstatement varied, in accordance with any written authority from the strata council of the applicant, received by the respondents on or before 15 February 2007, approving the style and design of a partial enclosure as permitted under Sch 1 by-law 20.

2. Pursuant to s 81(10) of the Strata Titles Act 1985 (WA), order 1 shall continue to have force and effect beyond the expiration of a period of two years that next succeeds the making of this order.

3. The application for costs is dismissed.

I certify that this and the preceding [49] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

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MR C RAYMOND, SENIOR MEMBER