The Owners of Rosneath Farm - Strata Plan 35452 and Ors and Clark
[2007] WASAT 287
•31 OCTOBER 2007
THE OWNERS OF ROSNEATH FARM - STRATA PLAN 35452 & ORS and CLARK [2007] WASAT 287
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2007] WASAT 287 | |
| STRATA TITLES ACT 1985 (WA) | |||
| Case No: | STR:111/2004 | 10 JULY 2007 | |
| Coram: | MR C RAYMOND (SENIOR MEMBER) | 30/10/07 | |
| 22 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | THE OWNERS OF ROSNEATH FARM - STRATA PLAN 35452 WARWICK HAROLD MITFORD ROWELL GILLIAN ROWELL WESLEY IAN CHARLES NASH LEE FRANCES NASH AMRIT LOUISE WORK KENDRICK GARY KENDRICK JANE WATTS GLENN NORMAN WATTS GRAHAM BENSTEAD ELAI MAZZOLENI RICHARD ROWELL CATHERINE JOY McGEACHIE MARJORIE WEINERT JAN IRVINE RICHARD CLARK |
Catchwords: | Strata Titles Act 1985 (WA) Proper construction of management statement Whether by-law excluded proposed future development lot from liability for levies Whether issue determined in related proceedings such that issue estoppel operates Whether regard can be had to extrinsic evidence of meetings prior to registration of management statement |
Legislation: | State Administrative Tribunal Act 2005 (WA), s 77, s 105 Strata Titles Act 1985 (WA), s 36, s 42B, s 81(7) |
Case References: | Administration of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 Clark and The Owners of Rosneath Farm - Strata Plan 35452 & Ors [2007] WASAT 85 Grant and The Owners of Rosneath Farm - Strata Plan 35452 [2006] WASAT 162 Kuligowski and Metrobus 220 CLR 363 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Rowell v Clark & Anor [2006] WASC 159 The Medical Board of Western Australia and Mustac [2006] WASAT 178 The Owners of Rosneath Farm Strata Plan 35452 and Clark [2005] WASAT 14 |
Orders | 1. The application is dismissed.,2. No order is made as to costs. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : STRATA TITLES ACT 1985 (WA) CITATION : THE OWNERS OF ROSNEATH FARM - STRATA PLAN 35452 & ORS and CLARK [2007] WASAT 287 MEMBER : MR C RAYMOND (SENIOR MEMBER) HEARD : 10 JULY 2007 DELIVERED : 31 OCTOBER 2007 FILE NO/S : STR 111 of 2004 BETWEEN : THE OWNERS OF ROSNEATH FARM - STRATA PLAN 35452
- First Applicant
WARWICK HAROLD MITFORD ROWELL
GILLIAN ROWELL
WESLEY IAN CHARLES NASH
LEE FRANCES NASH
AMRIT LOUISE WORK KENDRICK
GARY KENDRICK
JANE WATTS
GLENN NORMAN WATTS
GRAHAM BENSTEAD
ELAI MAZZOLENI
RICHARD ROWELL
CATHERINE JOY McGEACHIE
MARJORIE WEINERT
JAN IRVINE
2nd to 15th Applicants
- AND
RICHARD CLARK
Respondent
Catchwords:
Strata Titles Act 1985 (WA) - Proper construction of management statement - Whether by-law excluded proposed future development lot from liability for levies - Whether issue determined in related proceedings such that issue estoppel operates - Whether regard can be had to extrinsic evidence of meetings prior to registration of management statement
Legislation:
State Administrative Tribunal Act 2005 (WA), s 77, s 105
Strata Titles Act 1985 (WA), s 36, s 42B, s 81(7)
Result:
Application dismissed
Category: B
Representation:
Counsel:
First Applicant : N/A
2nd to 15th Applicants : Mr G McIntyre SC
Respondent : Mr D Beere
Solicitors:
First Applicant : N/A
2nd to 15th Applicants : Christopher Garvey
Respondent : Beere & Meyer
(Page 3)
Case(s) referred to in decision(s):
Administration of Papua and New Guinea v Daera Guba (1973) 130 CLR 353
Clark and The Owners of Rosneath Farm - Strata Plan 35452 & Ors [2007] WASAT 85
Grant and The Owners of Rosneath Farm - Strata Plan 35452 [2006] WASAT 162
Kuligowski and Metrobus 220 CLR 363
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Rowell v Clark & Anor [2006] WASC 159
The Medical Board of Western Australia and Mustac [2006] WASAT 178
The Owners of Rosneath Farm Strata Plan 35452 and Clark [2005] WASAT 14
(Page 4)
Summary of Tribunal's decision
1 In these proceedings, the applicants sought an order, in the nature of a declaratory order, that the respondent, as the registered proprietor of a particular lot, pay and continue to pay levies due in respect of the lot. This required that the Tribunal determine whether the by-laws of the strata company exempted the respondent from liability to pay levies.
2 The Tribunal upheld the contentions of the respondent to the effect that the same issue had been determined in earlier proceedings between the same parties and accordingly, that the applicants were estopped from re-litigating the issue.
3 In the event that it might subsequently be held on appeal that the Tribunal's conclusion was wrong, the Tribunal proceeded to determine the remaining issues raised in the proceedings.
4 It was necessary to determine whether regard could be had to additional evidence provided by the respondent. The Tribunal concluded that it was an abuse of process to attempt to rely on the further evidence, as that evidence should have been provided in the earlier proceedings which gave rise to the issue estoppel and the applicants were estopped from doing so. However, in any event, if regard was had to that evidence, the Tribunal concluded that it had no impact on the proper construction of the relevant by-law. The Tribunal concluded that on a proper construction of the by-law, the respondent was exempt from the payment of any levy.
5 The Tribunal also rejected the applicants' submissions that the respondent had acquiesced in an agreement to pay the levy and also concluded that any dispute as to whether the applicant had repudiated a private agreement termed an Agreement to Facilitate Staged Development was a matter which would have to be litigated in some other forum as it did not relate to the rights and obligations of the strata company in relation to the exercise of its functions under the Strata Titles Act 1985 (WA).
6 The application was therefore dismissed.
The order sought and issues for determination
7 The order sought in the application is:
(Page 5)
- "That Richard Clark, the registered proprietor of Lot 25, pay and continue to pay on or before the due date the levies due on the said lot from and including 11 October 2003, and that he bear any costs incurred."
8 A number of submissions were received from interested parties at an early stage in the proceedings and prior to a number of those parties subsequently being joined in the proceedings. Of those submissions, eight were in support of the application and four, including one on behalf of the respondent by his solicitor, were against the application. Those submissions are summarised in an earlier decision of Member Carey in The Owners of Rosneath Farm Strata Plan 35452 and Clark [2005] WASAT 14, to which further reference is made below (the Carey decision). I do not intend to repeat that summary because it is sufficient to indicate that the submissions raised the issues for determination which are set out below. As reflected in the Carey decision, there were additional submissions from the respondent's solicitor, which he did not summarise, because he did not consider it necessary to do so. The submissions do raise a number of issues in relation to the effect of an agreement entered into between Richard Clark (respondent) and Rowell Consulting Services Pty Ltd, which I take to have been abandoned, because in later hearings, counsel for the respondent has placed no reliance on that agreement. That may have been in consequence of findings made in other related proceedings in Clark and The Owners of Rosneath Farm - Strata Plan 35452 & Ors [2007] WASAT 85 (hereinafter referred to, for convenience, as the April 2007 decision), which will receive further consideration below. There is, however, one issue raised in the respondent's submissions which should be determined, and that is whether any valid resolution had been passed by the first applicant imposing a levy on the respondent's Lot 25.
9 After the publication of the Carey decision, some correspondence was received from interested parties who were obviously unaware that a final decision had been made and who were informed that the only recourse was to appeal the decision. The decision was subsequently set aside by an order made by Justice Templeman on 4 August 2006 in Rowell v Clark & Anor [2006] WASC 159. As that decision reflects, the application was originally lodged before the Strata Titles Referee, and after receipt of submissions from interested parties, was transferred to this Tribunal for determination. The decision was set aside and remitted to the Tribunal for re-determination because the appellant (second applicant in these proceedings) had not been afforded an opportunity to respond to some of the submissions
(Page 6)
- which had been filed. These are the remitted proceedings.
10 Consequently, after the matter was remitted to the Tribunal, further statements were filed on behalf of some of the applicants, namely Warwick Rowell, Graham Benstead, Andrew and Judith Weinert, Lee Nash and Amrit Kendrick. Those statements were filed on 29 May 2007, subsequent to the April 2007 decision, to which reference has already been made. Based on those statements and further submissions filed by the parties' legal representatives, I have taken those latter submissions to reflect all issues which have been raised in the documentation filed, which remain alive for determination. Some issues were raised by the parties in submissions and correspondence filed prior to the parties being legally represented, and I take any such issues, which were not pursued by the legal representatives, to have been abandoned.
11 Accordingly, I consider that the following issues fall to be determined.
1. Whether by-law 19 contained within the management statement exempts the respondent from liability or the payment of levies raised under s 36(1) of the Strata Titles Act 1985 (WA) (ST Act), and whether, in the proper construction of the management statement, regard can be had to:
(a) a document identified as the agreement to facilitate stage development (AFSD);
(b) documents identified as the Copeland plan and Copeland valuation;
(c) the statements, referred to above, filed on 29 May 2007.
2. Whether an issue estoppel operates to prevent the determination of issue 1, having regard to the findings made in the April 2007 decision.
3. Whether a resolution had been passed raising any levies against the respondent in respect of Lot 25.
4. If a valid resolution had not been passed, had a levy been validly raised by acquiescence.
(Page 7)
- 5. Whether the applicant repudiated the AFSD.
12 It is noted that the original issue raised by the respondent as to whether or not the first applicant had authorised the commencement of the proceedings, was not pursued at the final hearing and is therefore taken to have been abandoned. It is noted that the Tribunal refused to strike out proceedings on this ground and referred to evidence supporting the grant of authority, or ratification, of the making of the application, which evidence has not been contradicted.
Additional background
13 The parties are engaged in a long-running dispute concerning the manner in which a permaculture development in the south-west of the State, known as "Rosneath Farm", is to be managed and developed. Numerous proceedings have commenced in this Tribunal, the District Court and the Supreme Court.
14 Rosneath Farm Strata Plan 35452 was registered on 11 February 1999. At the time of registration, the parcel comprised eight strata lots and eight common property lots. One of the strata lots was later to be resubdivided, and that lot, or the part of it remaining from time to time, has been referred to as the "Superlot" and in some documentation, as "the Future Development Lot". The plan of re-subdivision of the Superlot into Strata Lots 17, 18 and 19 was registered on 2 September 1999. The remainder of the Superlot, then known as Lot 19, was re-subdivided into Lots 20 - 25, and a plan of resubdivision registered on 12 June 2000. The part of the original Superlot remaining is now known as Lot 25. It was common cause that the intent was always to subdivide the original Superlot so that there were 70 strata lots and eight common property lots in total comprising the parcel.
15 The management statement was lodged at the time of the original registration of the strata plan, being "Statement G966274".
16 The significant dispute in this matter relates to whether or not the first respondent is excused by virtue of by-law 19 from paying levies. If not excused from payment, the respondent is not financial and will be barred from exercising his votes in general meetings of the strata company, except in relation to unanimous resolutions or resolutions without dissent, until that default is remedied. The respondent will lose the control of the strata company, which he currently has, if excluded from voting.
(Page 8)
17 In the Carey decision, it was held that by-law 19 did excuse the respondent from any obligation to pay levies. However, as stated, that decision was set aside and the matter remitted for further determination.
18 Shortly prior to the publication of the Supreme Court decision setting aside the Carey decision, the respondent commenced further urgent proceedings before the Tribunal in which interim relief was sought to preserve the respondent's voting rights at a forthcoming annual general meeting. This dispute arose because a resolution had been passed raising a special levy against all lots. The council of the first applicant had, on legal advice, taken the view that the effect of Member Carey's order applied only to a general administration levy raised under s 36(1) of the ST Act and not to a reserve fund levy raised under s 36(2) of the ST Act. The interim application was heard on 21 July 2006, when the Carey decision remained in effect, and interim relief was granted to the respondent, substantially as sought, on that day. Those proceedings were under file CC 1048 of 2006. After these proceedings were referred back for redetermination by the Supreme Court, the parties elected to press ahead with matter CC 1048 of 2006, and hold these proceedings under STR 111/2004 in abeyance. This was done because it was perceived that the new application raised substantially the same issues and was not hampered by allegations that the proceedings had not been properly authorised, as was the case in STR 111/2004.
19 The Tribunal, constituted by myself, handed down a decision in matter CC 1048 of 2006 on 12 April 2007: see the April 2007 decision. As will be seen from issue 2 above, it is contended, by the respondent, that the effect of the April 2007 decision is such that an issue estoppel operates to prevent the applicant in STR 111/2004 from persisting with its claim in those proceedings for an order that the respondent pay and continue to pay on or before the due date the levies due on Lot 25 from and including 11 October 2003. It was consequently necessary for matter STR 111/2004 to be set down for final hearing. That hearing took place on 10 July 2007, and the period for delivery of reasons for the decision was extended by the President of the Tribunal to 31 October 2007.
20 I shall turn to address the above issues. It is convenient to deal firstly with the estoppel point.
The estoppel
21 The doctrine of estoppel extends to the decision of any Tribunal which has jurisdiction to decide finally a question arising between parties, even if it is not called a court, and its jurisdiction is derived from statute or from
(Page 9)
- the submission of parties, and it only has temporary authority to decide a matter ad hoc: see Administration of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 at 453; Kuligowski and Metrobus 220 CLR 363 at 373 [22]. In order for an issue estoppel to operate:
(a) the same question must have been decided;
(b) the decision which is said to create the estoppel must be final; and
(c) the parties to the decision or their privies must be the same persons as the parties to the proceedings for which the estoppel is raised or their privies: see Kuligowski and Metrobus at [21].
22 The issues identified for determination in the April 2007 decision included as issue (2):
"Whether by-law 19 exempts the applicant [respondent in these proceedings] from:
(a) all levies, or
(b) whether Motion 26, passed at the annual general meeting of the strata company on 14 January 2006, is a levy raised pursuant to s 36(2) of the ST Act; and
(c) if the answer to (a) is yes, whether by-law 19 exempts the applicant in relation to such a levy."
23 The Tribunal concluded in the April 2007 decision at [87]:
"… Nevertheless, the effect of the findings made in these proceedings is to make plain that by-law 19 operates to effectively prevent any levy being raised against the Superlot …"
24 The issue determined was therefore the same in both proceedings.
(b) Was the decision final?
25 As stated in Kuligowski and Metrobus above, at 375 [25], a final decision is one which is not of an interlocutory character, but is considered effective unless and until rescinded, altered or amended.
(Page 10)
- The fact that an appeal lies from a decision does not make it any less final. It must be final and conclusive on the merits, and a cause of action must be extinguished by the decision which is said to create the estoppel.
26 In my view, the April 2007 decision satisfies these criteria. It clearly was not interlocutory in nature, and it finally disposed of the matters in issue in those proceedings. Although some of the decisions of the Tribunal will obviously be interlocutory in nature, the State Administrative Tribunal Act 2004 (WA) (SAT Act) clearly contemplates that final decisions will be given (see s 77), and s 105 of the SAT Act provides that a party may appeal a decision of the Tribunal only if the court to which the appeal lies gives leave to appeal and restricts the appeal to a question of law.
27 While, in the context of a strata title dispute in which relief in the nature of a declaratory order is sought, the concept of a "cause of action" does not appear particularly apt, all of the elements of the claim, namely, the true construction of the by-law and its application to the parties as members of the strata company, are extinguished.
28 I consider that the April 2007 decision was a final decision.
(c) The same parties
29 The parties are identical.
30 It follows, in my view, that the respondent's contention must be upheld, and that the respondent is estopped from re-litigating the issue.
31 In the event that the above conclusion might be held in any appeal proceedings to be wrong, I will proceed to reach a conclusion in relation to the remaining issues.
The effect of by-law 19
32 It is necessary to set out the relevant by-laws. The words scored out show those words, included in the original management statement, which were struck out as being invalid pursuant to the decision in Grant and The Owners of Rosneath Farm - Strata Plan 35452 [2006] WASAT 162.
"'Varying Levies under Section 42B:
See also Heading 8
19. Unless varied by resolution without dissent of the Strata Company with the written permission of the original Proprietor, calculation of the levies will be based on the unit entitlements for individual
- lots that have been established by a licenced valuer on 9 October 1997 as contained in the Disclosure Statement.
- 20. The total number of units and unit entitlements of the individual lots will remain unaltered unless so determined by a licenced valuer
Heading 7: Management of Common Property:
36. Common Property Works Committee
1. … (all invalidated by the above Tribunal order)
2. …
3. The Infrastructure Account is funded initially at the first purchase of each and every lot, when 20% of the sale prices less commissions and settlement costs will be placed into this account. Further, sources of funds may include special levies or allocation of surpluses as agreed at an Annual General Meeting of proprietors, and general or specific donations or bequests.
Heading 8. Varying Levies under Section 42B:
See Schedule 1 by-laws 19, and 20
37. Proposed lots and their associated unit entitlements willbe part of any 'Future Development' lot that exists from time to time.'"
33 A consideration of the effect of by-law 19 commenced at [52] of the April 2007 decision, and it is convenient to simply repeat [52] - [65] inclusive below. I will then address any additional issues raised in these proceedings.
"52 As set out above, by-law 19 provides for the calculation of levies 'based on the unit entitlements for individual lots that have been established by a licenced valuer on 9 October 1997 as contained in the Disclosure Statement'.
(Page 12)
- 53 The applicant [respondent herein] contended that there is no ambiguity in the bylaw and that it is capable of being construed in the manner for which the applicant contends without reference to any extrinsic evidence. In any event, the applicant submits that regard can be had to the documents incorporated by reference in by-law 19, namely a document establishing unit entitlements for individual lots by a licenced valuer on 9 October 1997 as contained in the disclosure statement. That is accepted by the represented respondents and although the disclosure statement has not been provided, it is common cause that the document appearing at pages 120 to 122 of the applicant's papers are the documents which establish the unit entitlements. These documents comprise firstly a plan of Rosneath Farm (the Copeland plan) showing each of the proposed 70 strata lots and the eight common property lots and secondly a document, which is undated, on the letterhead of Copeland Valuation Services, which sets out the unit entitlement of each of the proposed strata lots (Copeland Valuation).
54 When pressed by the Tribunal to identify any other documents to which the Tribunal could have regard, if it concluded that bylaw 19 was ambiguous, the applicant adopted a position which is not acceptable to the Tribunal, namely, that if the Tribunal considered there was ambiguity, the matter should be set down for further hearing to enable the parties to put further evidence before the Tribunal. The matter was set down for a hearing to enable the parties to address argument on the documents before the Tribunal, and the extent to which regard could be had to extrinsic evidence was an obvious issue. The form of the hearing was given careful consideration by counsel for the parties. Without identifying what documents the Tribunal could properly have regard to, counsel for the applicant simply asserted that regard should be had to all of the material filed in these proceedings and in the earlier matter in STR 111/2004 (Clark (1)) [the Carey decision].
55 Counsel for the represented respondents' submissions, which incorporated submissions filed in the above Supreme Court proceedings in which Clark (1) [the Carey decision] was set aside, as
- the Tribunal understands them, also rely primarily on by-law 19 being capable of interpretation without regard to extrinsic evidence, save for the Copeland Valuation (based on a concession made during argument). However, the written submissions filed on behalf of the represented respondents incorporated reference to a 'bundle of documents dating from 21/12/98 to 14/9/04 under the coversheet listing them' in STR 111/2004.
- 56 It is common cause that the lots identified in the Copeland Valuation and the Copeland plan bear different lot numbers to those which appear in the registered strata plan. Although the registered lots appear to coincide in location and shape with lots in the Copeland plan, many of the lots shown in the Copeland plan have not been registered and are reflected in the registered strata plan as being part of Lot 25.
57 By-law 37, which was found by the Tribunal to be invalid in Grant's case, provides that '[p]roposed lots and the associated unit entitlements will be part of any 'Future Development' lot that exists from time to time'. That assists in the understanding of by-law 19. But by-law 19 is expressed by its heading 'Varying Levies under Section 42B' to be a by-law made under s 42B, which is a by-law permitting the provision of a method of assessing contributions to be levied on proprietors other than in proportion to the unit entitlement of their respective lots. There would be no need to have a s 42 by-law if bylaw 19 means what the represented respondents contend it means, in that all it does is establish, on their argument, the unit entitlement of each lot, which in the case of lots still to be created are aggregated within the Future Development Lot. Thus the individual lots identified from the Copeland plan and the unit entitlements set out in relation to such lots apply to the Future Development Lot until the lots comprised in it, as it exists from time to time, are created. It is accepted that that is a possible construction of the by-law.
58 On the other hand, the applicant contends that the reference to 'individual lots' means the individual lots shown in the Copeland plan, but until they are subdivided from the Future Development Lot,
- they do not exist and the future development lot is not an individual lot. Bylaw 36, as set out above, provides some support for this possible construction because it provides a reason why the Future Development Lot might not have been intended to be liable for contributions to be levied on the same basis as other lot proprietors. It provides that 20% of the sale price of the first purchase of each and every lot, less commissions and settlement costs, be paid into an Infrastructure Account. By-law 36 provides for a committee to ensure that infrastructure development is progressed according to an identified management plan and by-law 36(6) specifically refers to estimates of the costs for the building of community facilities to be funded from the account. The applicant was of course the original proprietor of all of the land now comprised in the strata plan.
- 59 In these circumstances, I consider that by-law 19 is ambiguous and that it is appropriate to have regard to the surrounding circumstances at the time of registration of the strata plan, resulting in the incorporating of the strata company by operation of law, and when the management statement incorporating the by-laws was also registered. As invited by the parties, I have had regard to all of the material filed on record in matter STR 111/2004 and, in particular, the documents identified by reference in the substituted Statement of Issues, Facts and Contentions filed on behalf of the represented respondents. Having considered that information, I regard much of it as being of little assistance to the Tribunal because it is a reflection of no more than the subjective views of one or other of the parties in these proceedings, or other protagonists in the development.
60 While the Tribunal is not bound by the rules of evidence, in matters relating to the construction of contracts and the like, those rules relating to the admissibility of evidence must be applied to ensure consistency in interpretation of documents, which must have the same meaning whether considered by a court bound [by] the rules of evidence, or by a body which is not so bound. Many of the submissions filed in STR 111/2004 contain evidence of how the parties subsequently,
(Page 15)
- by conduct, applied the bylaws. I have not taken such evidence into account having regard to the strictures placed upon the use of such evidence: see the principles discussed in Sportsvision Australia Pty Ltd v Tallglen Pty Ltd and Anor [1998] NSWC 221.
- 61 It was common cause that all purchasers, except as I understand it, the 14th and 15th named respondents, signed a document described as 'Agreement by Purchaser to Facilitate Staged Development at Rosneath Farm' at the same time as, and as a condition of purchase of their respective lots. The statements included within STR 111/2004 made frequent reference to these documents. I was informed of the above during a recent hearing of an interim application in these proceedings when an explanation was provided as to the basis upon which it is alleged in proceedings in the District Court, and now on appeal to the Supreme Court, Mr Clark (the applicant) is alleged to have repudiated his obligations under that agreement.
62 Some relevant background to the development of Rosneath Farm is set out in the first three paragraphs of Appendix 1 to a submission made by Elizabeth Patricia Black and Thomas Peter Black to the Strata Titles Referee, dated 12 November 2004. Those paragraphs state as follows:
'1. In 1997 Richard Clark (Clark) appointed Rowell Consulting Services (RCS) to design and sell an ecofriendly development using permaculture principles at his land Rosneath Farm.
2. Basic infrastructure was financed by RCS (and others to a minor extent) through loans and the provision of services.
3. The strata company was formed in 1998 and the first lots were transferred toward the end of that year. RCS received three, Clark one and two more went to others who had
- provided loan finance or services. Over the next two years, eight lots were sold to members of the public of which two were achieved by the provision of interest free vendor finance by Clark. The nature of this finance (Rosneath's version of Local Employment Transfer System) has meant that Clark is still owed most of it.'
- 63 In fact, the strata plan was first lodged on 1 December 1998 and it was registered on 11 February 1999.
64 The 'Agreement for Staged Development' (the Agreement) [AFSD] which appears at page 37 of the applicant's documents is an incomplete and unsigned copy but it shows that it was contemplated that the agreement would be signed during November 1998. It can therefore be inferred that the agreement had been prepared in advance of registration of the strata plan and with the intention that it would be signed by each purchaser. At page 36 is a document headed 'Notice re: Unit Entitlement Schedule from Valuer'. That notice contains an explanation of why the lots depicted in the Copeland plan differ from the numbering of the lots shown on the strata plan and explain how a purchaser can identify the correct unit entitlements applying to the lot number purchased. Both of these documents formed part of the material which was before the Tribunal in Clark (1) [the Carey decision]. In the circumstances, I consider that both of these documents comprise part of the surrounding circumstances to which it is legitimate for the Tribunal to have regard.
65 It is apparent from cl 8 of the Agreement that the Copeland plan was attached to the Agreement. The operative part of the Agreement is broken into two distinct parts. The first part contains eight clauses to which the purchaser agrees and the second part contains four clauses to which the original proprietor (Mr Clark) agreed. It is not necessary to set out the Notice and Agreement in full. The general effect is to explain how the lot numbering came to be changed and the manner in
- which strata title lots would be created by subdivision of the Future Development Lot when purchasers pay deposits on particular lots. Under the Agreement, the purchasers agreed to a number of matters for so long as potential strata title lots were part of a Future Development Lot, including that they would surrender their voting rights in relation to future re-subdivisions of the Future Development Lot to the original propriety. Significantly, the original proprietor agreed by cl 4 that he would pay essential expenditures for meeting strata company commitments (such as insurance and maintenance material costs) in the early stages when not many lots had been sold and there were only a few proprietors paying strata company levies."
34 I remain of the views expressed in the above extract from the April 2007 decision.
35 It will be noted from [59] of the April 2007 decision that I had regard to all of the materials filed in STR 111/2004, that is, as at that date. I concluded that the only appropriate documents to have regard to were the AFSD, the Copeland plan and the Copeland valuation. In relation to the documents that were then on file STR 111/2004, I remain of the same view.
36 The statements, referred to above, which were filed on 29 May 2007, were not in file STR 111/2004, when that file was examined for the purposes of the April 2007 decision. It remains, therefore, to be considered whether there is any additional information to which it would be proper to have regard, contained in those statements.
37 The respondent asserts that based on the principles discussed in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589, the applicants should not be entitled to bring forward further evidence. As summarised by Justice Barker in The Medical Board of Western Australia and Mustac [2006] WASAT 178 at [82], the Anshun principle "is really an illustration of the power of a court, and its statutory or inherent jurisdiction, to prevent its processes from being abused. As far as possible, litigation should be final. If a party to earlier litigation should have raised a particular issue amongst others at the time of the earlier litigation, the party may, in the interests of justice - to avoid an abuse of process of the court - be prevented from raising it later."
(Page 18)
38 As appears from the April 2007 decision at [55], it was the case for the respondents (the applicants in those proceedings) that it was not necessary to have regard to any extrinsic evidence save for the Copeland valuation, and the written submissions made reference to other limited documents in STR 111/2004.
39 The whole basis upon which the Carey decision had been set aside by the Supreme Court was that it was argued and held that there had been a breach of the rules of procedural fairness, because the appellant had not been given an opportunity to respond to some of the submissions filed in STR 111/2004. The decision of Templeman J made plain that his Honour considered that by-law 19 was ambiguous and that therefore it was permissible to have regard to extrinsic evidence. The parties and their counsel had all the input they desired at directions hearings in determining the appropriate way in which to have CC 1048 of 2006 determined. Consideration had to be given to whether it was appropriate to deal with the matter on the documents or whether it would be necessary to lead evidence. It should certainly have been considered by the parties as to whether any regard could be had to extrinsic evidence, and if so what evidence, in the event that the Tribunal came to the same conclusion as Templeman J. Even if the matter had not been properly considered beforehand, once the matter was raised during the hearing and specific consideration was given to the issue, if it was thought that further evidence needed to be provided, in whatever form, that was the time to raise it. Instead, the applicants (the respondents in those proceedings) advanced their position that there was no need to have regard to any extrinsic evidence, but if the clause was ambiguous, the extrinsic evidence was to be limited to that identified above.
40 In these circumstances, I consider that it is an abuse of process for the applicants, having had an unfavourable outcome in the April 2007 decision, to bolster their case by providing additional evidence, which if it is relevant, should have been provided and relied upon in the April 2007 decision. I find that the respondent is estopped from relying on the additional evidence.
41 However, if I am incorrect in this conclusion, it is my view that it is not proper to have regard to the evidence on other grounds. It is not necessary to go to each of the statements to illustrate the reasons for this view, because the information provided is common to more than one of the statements. The information refers to a meeting which occurred, attended by a number of the applicants and the respondent during or about October 1997. The version advanced by a number of the applicants is as set out at page 6 of Annexure WHMR1 to the statement of the second
(Page 19)
- applicant, Warwick Rowell. As there stated, there was a discussion about the way in which to deal with the costs and expenses of the strata company. It is suggested that a levy of $7 per unit would apply to all lots having an aggregated 10 000 unit entitlement. The version conveys that Mr Benstead raised his concern about meeting expenses when there were only a few lots sold and therefore paying levies. There was a discussion about capitalisation of development costs. It was further agreed that if there were any other expenses that needed to be met that were not covered by the levies raised, Mr Clark would pay them.
42 The difficulty with this version is that it is inconsistent with the AFSD. As stated above, while the Tribunal is not bound by the rules of evidence, there are certain standard rules such as the parol evidence rule which must be followed to ensure consistency in the interpretation of documents which may be brought either before a court or tribunal. Evidence should therefore not be permitted which contradicts or varies the written agreement.
43 In my view, the above version contradicts cl 4 of the AFSD, and the operation of by-law 19, if contrary to the April 2007 decision, by-law 19 does not exclude the respondent from the obligation to pay levies. If bylaw 19 operated in that way, there was no need for the respondent to agree to pay any essential expenditures, because given the unit entitlement attaching to Lot 25, and Lot 1 which is also owned by the respondent, the respondent would in any event have had to bear the bulk of any expenditures. Clause 4 of the AFSD does not provide for a "top up" to meet any costs not covered by the levy; it provides for the payment of essential expenditures. In effect, it becomes impossible to reconcile cl 4 of the AFSD with by-law 19, on that construction of it. Further, cl 4 of the AFSD does not make any provision for capitalisation, but leaves it to the respondent to make arrangements with the state manager, whatever that may mean. Clause 4 does not operate to relieve the respondent of any expenses; it adds to them, whereas the whole thrust of the applicants' case has been that cl 4 relieves the respondent of his obligations to pay levies which are otherwise payable under by-law 19. It simply does not say this. On the other hand, as rationalised in the April 2007 decision, if by-law 19 does not apply to the respondent, then cl 4 of the AFSD has an effective operation.
44 The applicants further contended that by-law 19 was not intended to alter the levies, but was to provide a mechanism whereby it would not be necessary to have a valuer revalue the lots whenever the Superlot was
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- subdivided. If that was the intention, it is not expressed. Passing of the by-law was permitted under s 42B of the ST Act, which enables a by-law to be made providing for a method of assessing contributions to be levied on proprietors other than in proportion to the unit entitlement of their respective lots. On the applicants' contention as to the purpose of the bylaw, there was never any intention to provide for levies to be assessed other than in proportion to the unit entitlement. I am unable to accept the applicants' contention.
45 It follows that on any basis, I find that by-law 19 exempts the respondent from payment of any levies.
(d) Was a resolution passed authorising the levy?
46 It became common cause, during submissions, that the applicants did not contend that a resolution had ever been passed which raised the levy in question. The issue then became whether or not by acquiescence there was an acceptance by all proprietors of an obligation to pay a levy of $7 per unit entitlement.
Acquiescence
47 The applicants' argument on this issue is novel. It is accepted that the respondent has never paid any levy in relation to Lot 25, although Mr Clark paid that levy in respect of Lot 1 and all other owners have done likewise.
48 The argument is that a levy to meet ordinary expenses could be passed by a simple majority and therefore if a majority of owners acquiesce, then that is binding on the respondent. I am unable to accept that proposition.
49 The affairs of a strata company have to be conducted in accordance with the ST Act and the by-laws applying to the strata company. Section 36 of the ST Act prescribes the manner by which a fund is to be established for administrative expenses and amounts levied from lot proprietors to provide the funds necessary for the payment of premiums of insurance and the discharge of any other obligation of the strata company. Unless there is acquiescence by all proprietors, or all proprietors agree in some informal way to issues relating to the management of the strata company, the business of the strata company must be conducted through properly constituted meetings. Any resolution passed which is not in accordance with prescribed processes for calling of meetings may be invalidated. The standard by-laws apply to the strata company except to the extent modified or appealed by the management
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- statement. The standard Sch 1 by-laws 1 - 16 therefore apply. By-law 12 prescribes how proceedings at general meetings are to be conducted, and that enables any proprietor to call for a poll. The result of a poll, as has occurred on many occasions in the recent history of the management of Rosneath Farm, would be that the respondent would block any levy to which he was opposed, whether or not it applied to Lot 25. It follows that even if it might subsequently be held that the Tribunal's interpretation as to the effect of by-law 19 is wrong, there has, in any event, been no valid raising of a levy against the respondent to date.
Repudiation
50 The application as originally advanced asserts that Mr Clark repudiated his obligation under cl 4 of the AFSD and that it was only the AFSD (not bylaw 19) which operated to relieve Mr Clark from an obligation to pay levies. Accordingly, having breached the agreement, it was contended that the respondent is liable to pay levies.
51 The applicants' counsel did not press the repudiation issue. It was addressed in the submissions by the respondent's counsel and was left unanswered. There is, in fact, no answer to the submissions made on behalf of the respondent, which adopted the reasons originally expressed by Member Carey, to the effect that any issue relating to the repudiation of the AFSD "may give rise to claims for relief by any party to the AFSD, but has no impact on the rights and obligations of the strata company in relation to the exercise of its functions under the [ST] Act". That, with respect, is clearly correct.
Orders
52 For the above reasons, the applicants are not entitled to the principal order sought. The applicants also sought an order that the respondent "bear any costs incurred".
53 On the basis that the reference to costs is intended to convey that the respondent be ordered to pay costs, such an order could not have been granted, even if the applicants had been successful, by virtue of the prohibition on costs set out in s 81(7) of the ST Act, except in the limited circumstances stated which are not relevant. In any event, the applicants have been unsuccessful. By reason of the above provision, neither party is able to recover costs.
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54 The Tribunal accordingly will issue orders as follows:
1. The application is dismissed.
2. No order is made as to costs.
I certify that this and the preceding [56] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR C RAYMOND, SENIOR MEMBER
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