ZHAO and THE OWNERS OF 5 WIMBLEDON STREET BECKENHAM STRATA SCHEME 40695 - [2025] WASAT 87

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL
ACT: STRATA TITLES ACT 1985 (WA)
CITATION:   ZHAO and THE OWNERS OF 5 WIMBLEDON STREET BECKENHAM STRATA SCHEME 40695 [2025] WASAT 87
MEMBER:   MS R PETRUCCI, MEMBER
HEARD:   7 AND 8 APRIL 2025
(FINAL WRITTEN SUBMISSIONS FILED 29 MAY 2025)

DELIVERED          :   26 AUGUST 2025
FILE NO/S:   CC 1171 of 2023
BETWEEN:   DONG HUA ZHAO
First Applicant
SHAO JUAN FAN
Second Applicant
AND
THE OWNERS OF 5 WIMBLEDON STREET BECKENHAM STRATA SCHEME 40695
Respondent

Catchwords:

Strata Titles Act 1985 (WA) - Two-lot scheme - Commercial premises - Application by owners seeking resolution of scheme dispute - Strata company - Strata manager - Council - Whether strata manager validly appointed - Whether legal representative validly appointed - Whether strata company authorised to have administration fund - Contributions - Whether owners required to pay contributions - Exercise of discretion by Tribunal to make declarations and orders - Date order is to have effect

Legislation:

State Administrative Tribunal Act 2004 (WA), s 32
Strata Titles Act 1985 (WA), s 3, s 91, s 97, s 100, s 100(1), s 100(1)(a), s 100(3), s 118, s 120(2), s 120(2)(a), s 120(4), s 122(1)(c), s 122(2), s 123(7), s 123(7)(b)(ii), s 127, s 130(2), s 133, s 135(1), s 140, s 140(1), s 140(1)(b), s 140(3), s 143(1), s 144, s 151, s 197(1), s 197(2), s 197(4), s 198(1), s 199(3), s 200, s 200(1), s 200(4), Pt 9, Div 1, Sch 1

Result:

Application is unsuccessful
Declarations and orders made

Category: B

Representation:

Counsel:

First Applicant	:	In Person
Second Applicant	:	In Person
Respondent	:	Mr P Monaco

Solicitors:

First Applicant	:	N/A
Second Applicant	:	N/A
Respondent	:	GV Lawyers

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

Carr and The Owners of 252 Cosy Corner Road Kronkup Survey-Strata Scheme 55030 [2024] WASAT 132
Clay and The Owners of Carinya Court Rockingham Strata Plan 25819 [2024] WASAT 121
Hopkins and Clayton [2007] WASAT 255

REASONS FOR DECISION OF THE TRIBUNAL:

This dispute concerns Strata Plan 40695 (strata plan) which is comprised of two lots which are both occupied by tenants and are used for commercial purposes. The strata plan was registered on 7 December 2001. Mr Zhao and Ms Fan are the owners of Lot 2 on the strata plan.
On 6 September 2023, Mr Zhao and Ms Fan commenced proceedings in the Tribunal under s 197(4) of the Strata Titles Act 1985 (WA) (ST Act) seeking the resolution of a scheme dispute, which they say should never have been required.[1] They seek orders under the ST Act against The Owners of 5 Wimbledon Street Beckenham Strata Scheme 40695 (strata company).
[1] The applicants' closing written submissions filed on 9 May 2025 at page 1.
At a directions hearing on 30 April 2024, the Tribunal ordered, amongst other orders, that:
The five orders sought in the application are discontinued and the matter is to […] proceed to hearing on the four issues outlined in the applicants' statement of issues, facts and contentions[.]

Issues

The four issues as raised by Mr Zhao and Ms Fan are:[2]
1.Whether the strata managers for the [strata company] – Strata Administration Services Pty Ltd … trading as Strata Administration Services ([s]trata [m]anager) are strata managers within Part 9 of the [ST Act] and in particular whether a strata management contract is in force between the [s]trata [c]ompany and the [s]trata [m]anager.
2.Whether administration levies have been properly levied in accordance with the [ST] Act.
3.Whether there is an issue with the accounts of the [s]trata [c]ompany.
4.Whether the current lawyers of the [s]trata [c]ompany have standing to act on behalf of the [s]trata [c]ompany and is there a conflict of interest.
[2] Exhibit 1 - Hearing Book (HB) at page 345.

Declarations and orders sought

In their closing submissions, Mr Zhao and Ms Fan urge the Tribunal to determine the dispute in their favour and make the declarations and orders as set out in their statement of facts, issues and contentions (SIFC) as follows:[3]
(a)A declaration that the strata manager is not the strata manager of the strata company and/or an order removing the strata manager as the strata manager of the strata company.
(b)An order requiring all monies paid by the strata company to the strata manager to be repaid to the strata company.
(c)A declaration that the strata company cannot 'impose an administration fund in respect of the strata scheme.' Alternatively, if the strata company does have the power to require an administrative fund, a declaration that the resolutions contained in the AGMs are invalid as they do not meet the voting requirements under the ST Act.
(d)An order that all previous administrative fund levies paid by Mr Zhao and Ms Fan to the strata company be repaid to them.
(e)A declaration that the strata manager reimburse the strata company in the amount of the discrepancy as set out in Tiara Taxation and Accounting Services report dated 12 April 2024.
(f)A declaration that GV Lawyers must stop acting for the strata company, or an order requiring GV Lawyers to stop acting for the strata company until and unless such time as all the owners of the strata company decide otherwise.
(g)An order that the strata manager reimburse the strata company for all legal expenses which the strata manager has incurred on behalf of the strata company.
[3] HB at pages 345 to 351.
The strata company rejects all of Mr Zhao's and Ms Fan's claims. The strata company submits that the following declarations should be made by the Tribunal to resolve the dispute:[4]
(a)A declaration that the strata manager has been validly appointed on the grounds that the strata management contract was signed by the owner of Lot 1.
(b)A declaration that GV Lawyers was validly appointed on the grounds that the contract of engagement was signed by the owner of Lot 1.
(c)A declaration that the establishment of an administration fund is reasonable on the grounds that the strata complex comprises commercial businesses and has commercial relationships with the adjoining property with whom it shares common property.
[4] The strata company's closing written submissions filed on 29 May 2025 at pages 4 to 5.
In addition, the strata company submits that:[5]
(a)No order should be made requiring the strata manager to repay monies to the strata company on the ground that strata management services have been provided and that there is no claim for a refund being made by the strata company.
(b)No order should be made requiring the strata manager to reimburse all expenses on the grounds that services have been provided and there is no evidence that the expenses were unreasonable.
(c)No order should be made requiring all administration fund levies be refunded to Mr Zhao and Ms Fan on the grounds that services have been provided and that there is no evidence that the funds were unreasonably incurred.
(d)No declaration should be made requiring the strata manager to reimburse discrepancies identified by the accountant for Mr Zhao and Ms Fan as they did not call the accountant to give evidence and in any event the strata manager made adjustments that resolve any errors previously identified.
[5] Ibid.

Other relevant proceeding

In their application under s 197(4) of the ST Act, Mr Zhao and Ms Fan named the strata manager as a respondent. However, at the first directions hearing on 29 September 2023, the Tribunal removed the strata manager as a respondent in this proceeding. The reason for removing the strata manager, as explained to the parties is because the strata manager is not a 'scheme participant' as that term is defined in s 197(2) of the ST Act and the parties must be a scheme participant in an application made to the Tribunal under s 197(4) of the ST Act.
Subsequently, on 14 November 2024, Mr Zhao and Ms Fan commenced a new proceeding in the Tribunal under s 198(1) of the ST Act. In that matter (CC 816 of 2024), the strata manager, Strata Administration Services Pty Ltd, is a respondent. The Tribunal published its decision in that matter on or about the same time that the decision is this matter was published: Zhao and Packer [2025] WASAT 88.

Jurisdiction of Tribunal

Although not challenged by the parties, I am satisfied that the Tribunal has jurisdiction to determine the dispute. This is on the basis that:
•Mr Zhao and Ms Fan and the strata company are each a 'scheme participant' as that term is defined in s 197(2) of the ST Act;
•the 'scheme dispute' as that term is defined in s 197(1) of the ST Act comprises the four issues (see above at [4]); and
•Mr Zhao and Ms Fan, as owners, made the application to the Tribunal under s 197(4) of the ST Act.
The proceeding comes within the Tribunal's original jurisdiction (s 209 of ST Act). The role of the Tribunal is not inquisitorial. That is, while the Tribunal may determine how to proceed with a hearing as provided for in s 32 of the State Administrative Tribunal Act 2004 (WA) (SAT Act), it is not the role of the Tribunal to take the lead in the investigation of the facts. Rather, the role of the Tribunal is to make a decision on the basis of the evidence presented to it and the usual practice is that the parties have the management of their respective case. Therefore, Mr Zhao and Ms Fan, as the applicants, bear the burden of proving their case, that is, persuading the Tribunal that they are entitled to the relief (orders) they seek, being the civil standard of proof, being on the balance of probabilities.
In the following reasons, I explain why Mr Zhao and Ms Fan's application is unsuccessful. The declarations and orders made by the Tribunal are set out below after [105].

Evidence

All documents filed with the Tribunal were taken into evidence (noting that submissions are not evidence) which is the usual practice of the Tribunal in these types of matters. In making my decision for the Tribunal I have had regard to the following documents which at the final hearing on 7 and 8 April 2025 (final hearing), the Tribunal marked as exhibits:
Exhibit 1Hearing Book prepared by the Tribunal on 24 March 2025 (1,140 pages); and
Exhibit 2Email dated 27 July 2020 from Mr Warren Kiddle, Strata Administration Services to Mr Zhao (1 page).
I had the benefit of affirmed oral evidence of the following witnesses:
(a)Mr Zhao who filed a witness statement dated 19 June 2024. Mr Zhao confirmed the contents of his witness statement at the final hearing. Through the assistance of an interpreter in the Mandarin language, Mr Zhao gave evidence about his concerns with the strata company including that he did not sign any contract to engage Strata Administration Services (SAS) nor GV Lawyers;
(b)Ms Fan who filed a witness statement dated 19 June 2024. Ms Fan confirmed the contents of her witness statement at the final hearing. Through the assistance of an interpreter in the Mandarin language, Ms Fan gave evidence about her concerns with the strata company including that she did not sign any contract to engage SAS nor GV Lawyers; and
(c)Mr Kiddle who filed a witness statement dated 5 August 2024. Mr Kiddle confirmed the contents of his witness statement at the final hearing subject to one correction, that the reference to 'L Dawson' should read 'L Packer.' Mr Kiddle gave evidence as to his role as the strata manager, attendance at, and discussions held at various AGMs and with Mr Zhao and Ms Fan.

Relevant facts

The factual framework of the dispute is agreed or is uncontroversial. I make the following findings of fact.

Strata scheme

The strata plan was registered on 7 December 2001 and is known as '5 Wimbledon Street Beckenham'.
The strata plan comprises two lots and common property as reflected on the Form 1.
Lot 1 has a unit entitlement of 54 units.
Lot 2 has a unit entitlement of 46 units.
Both Lot 1 and Lot 2 are leased out by the owners exclusively for commercial purposes.

Strata company

The strata company is the strata company for the strata scheme created by the registration of the strata plan on 7 December 2001.

Owners

Lot 1 is owned by Ms L Dawson (also known as Ms L Packer).
Lot 2 is owned by Mr Zhao and Ms Fan as joint tenants. They have owned Lot 2 since 7 December 2001.

Common property cost sharing agreement

The strata plan abuts Strata Plan 40694 which is known as '7 Wimbledon Street Beckenham'.
There is sharing of common property of the strata plan and Strata Plan 40694 and historically the cost of electricity usage on the common properties of the two strata plans was shared on a 50/50 basis (common property cost sharing agreement).
Having set out the relevant facts, I now turn to consider each of the four issues (see above at [4]) in turn.

Issue 1 - whether SAS validly appointed?

Mr Zhao and Ms Fan contend that there has never been a strata management contract in place with SASas required by s 144 of the ST Act and therefore there is no validly appointed strata manager. Their position may be summarised as follows:
(a)as the owners of Lot 2, they never signed any strata management contract with SAS which is not disputed by the strata company nor by Mr Kiddle, the sole director of SAS;
(b)the strata company does not have a common seal and nothing is documented in the AGM minutes (or elsewhere) who may execute (sign) documents on behalf of the strata company and therefore in a two lot scheme it seems logical and following contract law that both lot owners are required to execute (sign) documents for the strata company;
(c)Mr Kiddle in his witness statement stated that only Ms Packer signed the strata management contract because of 'necessity' to manage the strata company yet in cross examination, Mr Kiddle answered 'no' when asked if only one person can sign and make decisions on behalf of the strata company;
(d)Mr Kiddle in his email of 27 July 2020 requested that they sign the strata management contract yet his testimony is that only one signature is required; and
(e)Mr Kiddle has deliberately withheld the allegedly current strata management contract due to end in 2027 and failed to inform them of it. Therefore, it can be inferred that it was withheld by Mr Kiddle as he knew they would not sign it.
The strata company acknowledges that only the owner of Lot 1 signed the strata management contracts with SAS in circumstances of a two-lot scheme and say that only one member of council[6] is required to sign the contract.
[6] 'Council' means the governing body of a strata company (s 3 of the ST Act).
In this case, Ms Packer as the owner of Lot 1, who has a higher unit entitlement of 54 units (compared to Lot 2 with a unit entitlement of 46 units), signed the contracts.
Mr Kiddle gave evidence that he sent the strata management contracts to Mr Zhao and Ms Fan electronically to sign but they did not return them and gave no reason for not signing them.
The document headed 'Strata Community Management Contract' has SAS and the strata company as the parties to the contract[7]. It is undated but is signed by Mr Kiddle as the director of SAS and by Ms Packer (as a member of the council). It provides the contract commenced on 1 May 2020 and is for a period of 24 months with an expiry date of 30 April 2022 (2020 strata management contract).
[7] Exhibit 1 at page 199.
According to Mr Kiddle, a subsequent strata management contract was signed by Ms Packer (as a member of the council) and he as the director of SAS in 2022 with an expiry date of 30 April 2027 (2022 strata management contract).
In an email dated 27 July 2020, addressed to Mr Zhao and Ms Fan, Mr Kiddle states:[8]
As discussed at the recent AGM, the new Strata Titles Act that has come into effect on 1 May 2020 now requires us to have a signed contract.
I have attached the contract that [Ms Packer] has signed.
Can you please sign on the 1st & 3rd pages, scan and return to me.
[8] ts 12, 8 April 2025 and Exhibit 2.
Section 144 of the ST Act (as it applies from 1 May 2020 when significant amendments were made to the ST Act) requires there to be a strata management contract in place where the strata company wants to have a strata manager. This supports why Mr Kiddle emailed the owners on 27 July 2020 as set out in the immediately preceding paragraph.
While it is clear that Mr Zhao and Ms Fan are firmly of the view that without their signatures on the 2020 and the 2022 strata management contracts, that there is no contract, their understanding of the ST Act is misguided and incorrect for the following reasons.
First, s 143(1) of the ST Act provides that a strata company may, subject to the ST Act, authorise a person (a strata manager) to perform specified 'scheme functions'. The term 'scheme functions' is defined in s 3 of the ST Act to include a function of the strata company, a function of the council or a function of an officer of the strata company. Functions of the strata company are set out in detail in Div 1 Pt 9 (s 91 to 118) of the ST Act including, for example, that the strata company has the function to control and manage the common property for the benefit of all owners. Importantly, the functions of the strata company are to be performed by the council, subject to the ST Act and to any restriction imposed or direction given by ordinary resolution (s 135(1) of the ST Act).
If there are not more than three lots in the scheme, as is the case here, then the council consists of all of the owners of the lots (Sch 1 governance by-law 4(1)).[9] This means, in this case, both the owners of Lot 1 and Lot 2 are members of the council.
[9] A copy of the by-laws for this strata scheme was not filed with the Tribunal. Consequently, in these reasons I have referred to the by-laws as set out in Sch 1 of the ST Act.
While the owner of each lot in a strata titles scheme is entitled to one vote on a proposed resolution of the strata company, where a lot has more than one owner, the co-owners may only cast one vote through jointly appointing a single proxy (who maybe one of the co-owners).
Section 127 of the ST Act sets out the following types of resolutions:
•unanimous resolution;
•resolution without dissent;
•special resolution (in a two-lot scheme the resolution will only be a special resolution if it is an unanimous resolution); and
•ordinary resolution.
Resolutions passed at a general meeting may be ordinary resolutions unless the ST Act requires otherwise (s 133 of the ST Act).
At meetings of the council, all matters must be determined by a simple majority vote (Sch 1 governance by-law 8(1).
For a two-lot scheme, as this is, at a general meeting, a quorum is constituted if there are present persons entitled to cast the vote attached to each of the lots (s 130(2) of the St Act).
A simple majority is required for ordinary resolutions (s 123(7) of the ST Act). Under s 122(1)(c) of the ST Act, for an ordinary resolution, the votes must be counted by the number of votes cast unless any person entitled to cast a vote demands that they be counted by the number of unit entitlements of the lots for which votes are cast, in which case, they must be counted in that manner. Section 123(7) of the ST Act provides that an ordinary resolution is passed when counted as required under s 122(1)(c) of the ST Act:
…
(i)by number — by more than 50% of the number of lots for which votes are cast; or
(ii)by unit entitlements — by more than 50% of the sum of the unit entitlements of the lots in the scheme for which votes are cast.
Note for this subsection:
For an ordinary resolution, the question is determined against the resolution on an equal number of votes whether counted by number or by unit entitlements.

Mr Zhao and Ms Fan as the owners of Lot 2, may only cast one vote on proposed resolutions subject to the following exclusion. A lot owner will not be entitled to cast a vote, for example on an ordinary resolution, where the owner has an outstanding amount (for example, strata levies) owed to the strata company. In such a case, the lot owner is usually referred to as 'unfinancial' and is not entitled to vote.
However, an 'unfinancial' lot owner is still eligible to cast a vote on unanimous resolutions or resolutions without dissent, a resolution postponing the expiry day for a leasehold scheme and a termination resolution for a scheme (s 120(2) of the ST Act).
For completeness, I note that resolutions can only be proposed by an owner who is entitled to vote on the resolution (s 120(4) of the ST Act).
As the resolution to appoint the strata manager is an ordinary resolution of the strata company, Mr Zhao and Ms Fan while unfinancial are not eligible to cast a vote. From the minutes of the AGM filed with the Tribunal, I note that Mr Zhao and Ms Fan were recorded as financial for the 2017 AGM,[10] 2018 AGM,[11] and the 2019 AGM.[12]
[10] Exhibit 1 at page 622.
[11] Exhibit 1 at page 626.
[12] Exhibit 1 at page 630.
At the 2020 AGM, at which Ms Fan attended on 24 June 2020, item 6.4 was voted on 2:0. It provides:[13]
6.4Execution of Documents - Motion under Notice
That the [s]trata [c]ouncil is authorised to enter and execute contracts, agreements, undertakings or other legally binding arrangements from time to time, which are necessary to achieve the Strata Company's [g]eneral [d]uty.
[13] Exhibit 1 at page 635.
Mr Zhao and Ms Fan did not attend the 2021 AGM nor the 2022 AGM in person or by proxy.
Mr Zhao and Ms Fan attended the 2023 AGM, however, it is not recorded whether they (Lot 2) are 'unfinancial'. However, Mr Zhao and Ms Fan conceded that they have not paid any strata levies to the strata company since about July 2020, which subject to whether they are required to pay levies (see below at [59] to [74]), they are 'unfinancial' members of the strata company and therefore not entitled to vote on ordinary resolutions. This explains why the minutes of the 2023 AGM only reflect the vote for Lot 1.
A similar resolution to that in [48] was passed at the 2021 AGM,[14] the 2022 AGM,[15] and at the 2023 AGM.[16]
[14] Exhibit 1 at page 640.
[15] Exhibit 1 at page 647.
[16] Exhibit 1 at page 655.
It is clear that Ms Fan voted in favour of the resolution for the council to execute contracts at the 2020 AGM (see above at [48]) and that on 27 July 2020 Mr Kiddle, by email, wrote to Mr Zhao and Ms Fan asking them to sign the 2020 strata management contract. This is when Mr Zhao and Ms Fan as the owners of Lot 2 were financial. They did not sign the 2020 strata management contract but Ms Packer as the owner of Lot 1 did.
Section 122(1)(c) of the ST Act provides that for an ordinary resolution, the votes must be counted by the number of votes cast unless any person entitled to cast a vote demands that they be counted by the number of unit entitlements. The 2020 strata management contract was not an agenda item for the 2020 AGM which was held on 24 June 2020. Mr Kiddle in giving evidence confirmed that such contracts are not discussed at the AGM unless an owner specifically requests it and that no such request was made for the 2020 AGM. Further, Mr Kiddle stated that his strata management team contacts the council prior to expiry of the contract to sign a new contract for the next period.
Although there are no minutes of a council meeting, it appears from Mr Kiddle's testimony that he emailed the 2020 strata management contract to Mr Zhao and Ms Fan. Mr Kiddle in his witness statement[17] states that the 2020 strata management contract was necessary for the ongoing management of the strata scheme. In the circumstances of this case, where there had been a strata manager in place, and with the significant changes to the ST Act which came into effect on 1 May 2020, including the requirement for a contract to be in place where the strata company engages a strata manager, it was appropriate, where the only other owner in the strata scheme, Ms Packer, was in agreeance for the strata manager to continue, it can inferred that when Mr Zhao and Ms Fan refused to sign the 2020 strata management agreement that a vote by the number of unit entitlements was undertaken. As Ms Packer, the owner of Lot 1, has more than 50% of the sum of the unit entitlements of the lots in the strata scheme, she signed the contract thereby satisfying the requirements of s 123(7)(b)(ii) of the ST Act.
[17] Exhibit 1 at page 977.
Finally, Mr Zhao and Ms Fan question why the 2020 strata management contract having a signing clause for both Mr Zhao and Ms Fan to sign when Mr Kiddle is of the view that only one owner is required to sign the contract. In my view, it was appropriate to have the signing clause as Mr Zhao and Ms Fan, as the owners of Lot 2, were financial until about July 2020 and therefore were entitled to vote for the 2020 strata management contract and sign it. They chose not to.
By 2022 when the 2022 strata management contract was being considered, Mr Zhao and Ms Fan as the owners Lot 2 were unfinancial and therefore they were not eligible to cast a vote on an ordinary resolution. Ms Packer as the owner of Lot 1, was the only owner eligible to vote. It was not necessary to cast a vote as Ms Packer, as the sole owner entitled to vote, signed the 2022 strata management contract. Further, although it is not necessary to consider whether a vote by the number of unit entitlements was undertaken, it is clear that Ms Packer has more than 50% of the sum of the unit entitlements of the lots in the strata scheme and therefore meets the requirements of s 123(7)(b)(ii) of the ST Act.
Finally, while Mr Zhao and Ms Fan say there is inconsistency in Mr Kiddle's testimony, for example, when he stated that he was not aware of the 2022 strata management contract, but in his witness statement stated that the strata management team contacted the council before the expiry of the contract to enter into a new strata management contract, I accept that an employee of SAS rather than Mr Kiddle, himself, may not have issued the proposed 2022 strata management contract to the council for signing.
For all of the above reasons, Mr Zhao's and Ms Fan's claims in respect of the first issue, that SAS was not validly appointed, fails.

Issue 2 - whether Mr Zhao and Ms Fan are required to pay contributions (administrative levies)?

According to Mr Zhao and Ms Fan the second issue arises because the strata company filed a claim against them in the Magistrates Court (PER/GCLM/3847/2023) where the strata company seeks recovery of alleged outstanding contributions[18] (administrative levies) pursuant to s 100 of the ST Act.
[18] Contributions is defined in s 3 of the ST Act as the levies imposed on owners of lots by the strata company to raise amounts for payment into its administrative fund or reserve fund under s 100 of the ST Act.
Mr Zhao and Ms Fan deny they owe any contributions (administrative levies) to the strata company on the following two grounds.
First, Mr Zhao and Ms Fan say that s 140(1) of ST Act provides that a two-lot scheme cannot have an administrative fund unless required by a by-law which there is none.
Second, even if the ST Act allows for an administrative fund, Mr Zhao and Ms Fan contend that the contributions (administrative levies) have not be raised in accordance with s 100(3) and s 133 of the ST Act. Mr Zhao and Ms Fan were particularly critical of the AGMs where they assert that votes were not cast and if they disagreed with a resolution their comments were set aside and not considered. They say that they raised the issue of levies with Mr Kiddle at the 2020 AGM to which he replied:[19]
We will correct the issues next year and now that all documents are ready, you should raise your queries earlier …
Your store is a bit smaller than [Ms Packer's ] …
If it's for voting, [Ms Packer] and I have two votes, [Mr Zhao] and [Ms Fan] are one vote, you can't change anything.
[19] Exhibit 1 at page 375.
In addition, Mr Zhao and Ms Fan assert, in summary:[20]
•a quorum was not achieved at either the 2021, 2022 or 2024 AGMs as they did not attend and did not appoint a proxy;
•there is nothing in the minutes which suggests the voting was undertaken according to unit entitlements (s 122(2) of the ST Act);
•prior to 2020 they had always paid their levies to the strata company. At the 2020 AGM and at the 2023 AGM which they attended in person, votes were not cast, or they were denied a vote in relation to the levies. In any event, if there was a vote, they would have voted against the levies. The minutes of the AGMs fail to reflect the issues they raised about the levies and other matters; and
•they requested information how to appoint a proxy but no response was provided by SAS.
[20] Mr Zhao's and Ms Fan's closing written submissions filed 9 May 2025 pages 1 to 19.
The strata company (correctly) concedes that pursuant to s 140(1)(b) of the ST Act that the strata company in this case cannot establish an administrative fund unless required to do so by scheme bylaws. This is because the strata scheme is a two-lot scheme. Further, although a copy of the scheme by-laws is not before the Tribunal, the strata company concedes that there is no by-law entitling the strata company to establish an administration fund.
The starting point is s 140 of the ST Act which sets out special rules that apply to two lot schemes including s 140(3) which provides that, on application by a member of the strata company, the Tribunal may require the strata company to perform a designated function, such as to operate an administrative fund under s 100(1)(a) of the ST Act.
While an application has not been made to the Tribunal under s 140(3) of the ST Act, but rather Mr Zhao's and Ms Fan's application is an application under s 197(4) of the ST Act to resolve a scheme dispute or proceeding, in my view, it is entirely appropriate for the strata company to have set up the administrative fund for this two-lot strata scheme and for its continued operation. I have taken the following into consideration in arriving at this conclusion.
First, an administrative fund is set up to have funds to pay for expenses that the strata company requires for the control and management of the common property, for the payment of any premiums of insurance and for the discharge of any other obligation of the strata company. It is common ground that the strata plan that abuts this strata plan also has common property and that historically there has been an arrangement in place to share the cost of electricity usage for the common property on a 50/50 basis as set out in the common property cost sharing agreement. It is therefore necessary for the strata company to raise contributions (levies) in order to pay for the costs in respect of the common property.
Second, the strata company is required to maintain insurance coverage for the common property (s 97 ST Act) and it is therefore required to levy contributions to the owners in order to pay the insurance premium. The minutes of the 2020 AGM, which Ms Fan attended, reflects that by ordinary resolution that SAS was authorised to renew the insurance policy on behalf of the strata company. Ms Fan voted in favour of the resolution. Mr Zhao and Ms Fan have not challenged the validity of that resolution.
Third, the minutes of the 2020 AGM, which Ms Fan attended, reflect that by ordinary resolution that the administrative fund expenditure budget of $13,420 was adopted and that levy contributions totalling $12,030 be levied periodically. Ms Fan voted in favour of the resolution. In addition, Mr Kiddle gave evidence that budgets for expenses are presented to the owners prior to the AGMs. Mr Zhao and Ms Fan have not challenged that evidence.
Fourth, Mr Zhao and Ms Fan concede they have not paid any levies to the strata company since about July 2020. From this, it can be inferred that prior to this date that they agreed to the establishment of the administrative fund. This is supported by the minutes of the AGMs they attended which are before the Tribunal. Contrary to Mr Zhao's and Ms Fan's assertion that the 2023 AGM minutes fail to reflect how they voted, as they were 'unfinancial' (that is, having outstanding levies) they were not eligible to vote on resolutions requiring an ordinary resolution (s 120(2)(a) ST Act).
Fifth, Mr Zhao and Ms Fan gave testimony that they have charged and continue to charge their commercial tenants strata levies. It is inferred from this that Mr Zhao and Ms Fan accept that strata levies are required to be paid by lot owners in order for costs to be paid including for insurance as well as other costs associated with the common property and the strata company.
Sixth, SAS has provided services to the strata complex including for Mr Zhao and Ms Fan and their commercial tenants in circumstances where Mr Zhao and Ms Fan have not challenged the quantum as being excessive, but rather on the basis they did not sign the strata management contracts, which as stated above at [27] to [58] I found that SAS was validly appointed under the 2020 strata management contract and the 2022 strata management contracts.
It is not necessary to consider Mr Zhao's and Ms Fan's submission, that if the strata company does have the power to have an administrative fund, that the Tribunal should declare the resolutions contained in the minutes of the AGMs as invalid as they do not meet the voting requirements under the ST Act. This is because, as already explained, but repeated here, Mr Zhao and Ms Fan, as the owners of Lot 2, were ineligible to cast a vote on ordinary resolutions when they are 'unfinancial'. Consequently, Mr Zhao's and Ms Fan's claim that all previous administrative fund levies be repaid to them is without merit.
For all of the above reasons, Mr Zhao's and Ms Fan's claims in respect of the second issue, that they are not required to pay administrative levies, fails.

Issue 3 - whether Mr Zhao and Ms Fan are liable to pay for strata manager fees, electricity, insurance brokerage, stamp duty and GST?

Mr Zhao and Ms Fang contend that SAS failed to adequately maintain proper accounting records. Further, Mr Zhao and Ms Fan assert that SAS paid for certain expenses from the strata company's bank account without authority.
In addition, Mr Zhao and Ms Fan assert, in summary:[21]
•even if there is a valid strata management contract, SAS breached so many of its obligations under the 2020 strata management contract and the 2022 strata management contract that it should not be entitled to any fees;
•the strata company's claim through submissions made by Mr Monaco of GV Lawyers that work has been completed by SAS and therefore should be paid is ridiculous as it is suggestive that anyone can claim to have undertaken work on behalf of another person without a contract and seek payment; and
•invoices issued to both strata plan 40694 and 40695 were improperly allocated which the strata company concedes. However, SAS has failed to reimburse the monies to the strata company.
[21] Ibid.
The strata company does not accept any of Mr Zhao's and Ms Fan's concerns and submits, in summary:[22]
•Mr Zhao and Ms Fan do not object to the payment of the electricity expenses and they accept that they should contribute to the electricity costs associated with strata plan 40694 but they challenge the basis of the apportionment and say it should not be a 50%/50% basis, but rather it should be a 41.15%/58.85% on their assessment of the relative size of the areas of the two strata schemes;
•the common property cost sharing agreement can only be varied by both strata companies and not by one lot owner (for example Mr Zhao and Ms Fan) in isolation;
•Mr Zhao and Ms Fan provide no evidence concerning the insurance brokerage, stamp duty or GST expenses;
•Mr Zhao and Ms Fan concede they have not paid strata levies since about July 2020 but have, and are continuing to collect strata levies from their commercial tenant; and
•Mr Kiddle's evidence is that some financial adjustments were made in relation to the expenses between the two strata plans which were identified in Mr Zhao's and Ms Fan's accountant's report.
[22] The strata company's closing written submissions filed on 29 May 2025 at pages 1 to 5.
The issue of the shared expenses was raised more than 20 years ago at the 2002 AGM as an item of special business as follows:[23]
Item 9.1 Common Areas & Easements. W Kiddle gave an overview of the two properties and their respective responsibilities regarding maintenance of the shared areas. Concerns were raised over the contribution towards maintenance of the driveway to the rear of the building and the car park areas. W Kiddle offered to investigate and prepare a system that would result in a fair and equitable solution.
[23] The strata company's amended statement of issues, facts and contentions filed on 10 May 2024 at paragraphs 8 and 9.
According to the strata company, Mr Kiddle investigated the issue of sharing expenses between strata plans 40694 and 40695 with the result that since the 2002 AGM, that is more than 20 years ago, which is about the time when Mr Zhao and Ms Fan became the owners of Lot 2, the expenses of the common property areas have been shared on a 50%/50% split.
The strata company submits that the common property cost sharing agreement, with a 50%/50% split is not scientific, but rather it is a fair and reasonable outcome that covers reticulation, gardening, external lights and pylon signs on the common property areas of strata plan 40694 and 40695.
The common property cost sharing agreement between the two strata companies,[24] while not documented in any great detail, provides for the maintenance of common property of both strata schemes on a 50%/50% basis and then for each lot owner to pay their respective share of the 50% by reference to their unit entitlement. The consequence is that for Mr Zhao and Ms Fan they are required to pay 46% of the 50% of the costs in relation to the common property areas of both strata schemes. The common property cost sharing agreement has been in place for more than 20 years.
[24] Exhibit 1 at page 26.
In my view, it is not possible or reasonable for one owner, in this case, Mr Zhao and Ms Fan, to seek to unilaterally change the common property cost sharing agreement solely based on their assessment of the relative size of the areas of the two strata schemes. This is in circumstances where no evidence was adduced by Mr Zhao and Ms Fan as to why they had not sought review of the common property cost sharing agreement in any of the past 20 years. Therefore, following Hopkins and Clayton [2007] WASAT 255 where it was stated that the management of the strata company is best left to the strata company and that the Tribunal should not too readily impose its own views, it is not necessary for the Tribunal to intervene in this case where, apart from Mr Zhao's and Ms Fan's complaint, the common property cost sharing agreement which has not been challenged in 20 years is working well. However, if there is a change in ownership of one or more lots, or there is a change in circumstances, such as a change of tenants or a change in the usage of the common property, the strata companies may want to revisit, and if necessary, revise the common property cost sharing agreement.
Finally, I accept the strata company's[25] and Mr Kiddle's oral evidence that some credit adjustments were made to the accounts in relation to expenses charged to the strata company. Mr Zhao and Ms Fan did not call the accountant from Tiara Taxation and Accounting Service who prepared the report dated 12 April 2024[26] to give evidence. As the accountant was not available to answer questions about the report, I have not considered the alleged discrepancies in expenses any further.
[25] Adjustments to accounts as set out in Exhibit 1 at page 969.
[26] Exhibit 1 at pages 352 to 362.

For the above reasons, Mr Zhao and Ms Fan's claims in respect of the third issue, that they are not required to pay strata manager fees and other costs, fails.

Issue 4 - whether GV Lawyers validly appointed?

Mr Zhao and Ms Fang assert that the strata company did not engage GV Lawyers and therefore any payment made must be reimbursed to the strata company. This is because the cost agreement was only signed by Ms Packer. Mr Zhao and Ms Fan did not sign the cost agreement.
In addition, Mr Zhao and Ms Fang assert, in summary:[27]
•Mr Kiddle gave evidence that Ms Packer authorised the engagement of GV Lawyers in circumstances where they say Ms Packer has no authority to do so under the ST Act;
•the amount paid to GV Lawyers exceeds the cost agreement estimate but does not cover the scope of the work which is only for the matter in the Magistrates Court and in any event contradicts Mr Kiddle's evidence that the cost agreement is for an application in the Tribunal;
•it is absurd that the strata company should be liable for legal fees when the cost agreement is not signed by the strata company and whose instructions are provided solely by SAS claiming to be the strata manager;
•there is a conflict of interest as GV Lawyers previously acted for SAS in the preparation of the 2020 strata management contract and who tried to act as the legal representative for the strata company (by notice of representation dated 11 September 2023) when this proceeding was commenced in the Tribunal; and
•one lot owner alone cannot bind the strata company to legal action or engage legal services when that owner has the express knowledge that the other owner does not agree.
[27] Mr Zhao's and Ms Fan's closing written submissions filed 9 May 2025 at pages 16 to 18.
For similar reasons to the appointment of the strata manager, the engagement of legal representation requires an ordinary resolution of the strata company. As previously stated, and repeated here, apart from limited exceptions as set out in s 120(2) of the ST Act, Mr Zhao and Ms Fan are only eligible to vote on ordinary resolutions when they are not 'unfinancial'. As Mr Zhao and Ms Fan concede they have not paid strata levies since about July 2020 they are 'unfinancial' and therefore cannot cast a vote on any ordinary resolution (apart from the limited exceptions set out in s 120(2) of the ST Act). Consequently, I am satisfied that GV Lawyers were validly appointed where only Ms Packer signed the cost agreement.[28] Consequently, the order sought by Mr Zhao and Ms Fan requiring the reimbursement to the strata company of all legal expenses paid is without merit.
[28] Exhibit 1 at page 387.
For all of the above reasons, Mr Zhao and Ms Fan's claims, in respect of the fourth issue, that GV Lawyers was not validly appointed, fails.
Having made findings in regard to each of the four issues, I now turn to consider whether to exercise the Tribunal's discretion to make declarations and orders under the ST Act to resolve the scheme dispute or the proceeding. In doing so, I will consider the interests of Mr Zhao and Ms Fan as the owners of Lot 2 as well as the interests of the strata company which has the responsibility to control and manage the common property for the benefit of all the owners (as provided for in s 91 of the ST Act).

Principles in exercising the Tribunal's discretion to make declarations and orders

The power of the Tribunal to make orders to resolve a scheme dispute or the proceeding under s 200(1) of the ST Act is a statutory discretionary power. Similarly, the power of the Tribunal to make a declaration under s 199(3) of the ST Act is a statutory discretionary power.
In Clay and The Owners of Carinya Court Rockingham Strata Plan 25819 [2024] WASAT 121 at [60], I summarised the principles and factors to consider in determining whether or not to exercise the Tribunal's powers under s 199(3) and s 200(1) of the ST Act. I adopt the principles and factors set out in [60] to [67] of that decision and have applied them in this case in my exercise of the Tribunal's discretionary powers.
Importantly, as stated in previous decisions of the Tribunal, such as Carr and The Owners of 252 Cosy Corner Road Kronkup SurveyStrata Scheme 55030 [2024] WASAT 132, the discretion conferred by s 200 of the ST Act to make an order is not limited by any mandatory considerations. I adopt the statements made in [138] to [140] of that decision.

Exercise of discretion - whether SAS validly appointed?

Earlier, I made the finding that SAS was validly appointed under the 2020 strata management contract and the 2022 strata management contract which was only signed by the owner of Lot 1.
Consequently, it is reasonable that a declaration be made that the strata manager, SAS, was validly appointed. This will break the deadlock between the parties that has been in dispute since Mr Zhao and Ms Fan stopped paying contributions (strata levies) from about July 2020. The declaration will also create certainty between the parties and thereby reduce further disputes and litigation and for the parties to now move forward.
In their closing submissions,[29] Mr Zhao and Ms Fan put forward the position that if the Tribunal finds that there is a strata management contract in place between the strata company and SAS, then they ask the Tribunal to terminate the strata management contract because, in their view, SAS has breached the ST Act on numerous occasions. In their closing submissions, Mr Zhao and Ms Fan assert that Mr Kiddle failed at the final hearing to answer questions or claimed to not have knowledge of the issue to support their position that the Tribunal should order that strata management contract be terminated.
[29] Mr Zhao's and Ms Fan's closing written submissions filed 9 May 2025 at pages 10 to 11.
The strata company may seek to terminate the strata management contract while it is still in effect if there are proper grounds for termination (s 151 of ST Act). Proper grounds include situations where the strata manager has breached the contract or one of their statutory duties imposed by the ST Act. Importantly, there are steps the strata company is required to take to terminate the strata management contract. No steps have been taken apart from the application made by Mr Zhao and Ms Fan made under s 198(1) of the ST Act. I have separately heard that matter and reached the conclusion that the strata company has not unreasonably refused to make an application to the Tribunal seeking the removal of the strata manager. That decision was published on or about the same time the decision in this matter was published: Zhao and Packer [2025] WASAT 88.

Exercise of discretion - whether Mr Zhao and Ms Fan are required to pay contributions (administrative levies)?

Having made findings earlier (see above at [59] to [74]) including that the strata company could not create an administrative fund, as properly conceded by the strata company, I went on to find that it is reasonable in the circumstances of this case for the strata company to have set up an administrative fund and for the strata company to continue to operate it. Consequently, there is utility or benefit in making a declaration and an order under the ST Act that the strata company is authorised to perform the designated function of operating an administration fund pursuant to pursuant to s 140(3) of the ST Act and s 100(1) of the ST Act. Further, it is reasonable to make an order under s 200(4) of the ST Act which provides that order is taken to have come into effect on the date the administration fund was set up (rather than the date of the order).
The result of the above declaration and orders is that Mr Zhao and Ms Fan are required to pay contributions (administrative levies), which they have not done so since about July 2020.
Finally, the above declaration and orders will give certainty for the parties and should minimise any further disputes and litigation.

Exercise of discretion - whether Mr Zhao and Ms Fan are liable to pay for strata manager fees, electricity, insurance brokerage, stamp duty and GST?

The main concern under this issue was the common property cost sharing agreement. Earlier I made the finding that Mr Zhao and Ms Fan cannot seek to unilaterally change the common property cost sharing agreement based on their assessment of the relative size of the areas of the two strata schemes, which has been in place for at least 20 years and without complaint until now (see above at [75] to [84]).
Consequently, it is reasonable to exercise the Tribunal's discretionary power to break the deadlock between the parties in order for them to move on by making a declaration and an order confirming the validity of the common property cost sharing agreement from the date it was agreed (rather than from the date of the order).

Exercise of discretion - whether GV Lawyers validly appointed?

For reasons set out earlier (see above at [85] to [89]), I made the finding that GV Lawyers was validly appointed.
Consequently, it is reasonable to exercise the Tribunal's discretionary power to break the deadlock between the parties in order for them to move on by making a declaration and an order confirming the validity of the costs agreement from the date it was signed.

Conclusion

No doubt Mr Zhao and Ms Fan think the strata company is being unreasonable and that the strata company thinks Mr Zhao and Ms Fan are being unreasonable in circumstances where Mr Zhao and Ms Fan say they commenced these proceedings in the Tribunal because the strata company filed a claim again them in the Magistrates Court seeking the recovery of administrative levies.[30] It is unfortunate that the parties were not able to resolve their differences at mediation, held early in these proceedings.
[30] Mr Zhao's and Ms Fan's closing written submissions filed on 9 May 2024 at page 11.
Reflecting back on the findings made in relation to the four issues (see above at [4]), it is reasonable in all of the circumstances of this case, to exercise the Tribunal's discretionary powers under s 199 and s 200 of the ST Act to make the following declarations and orders for the reasons explained above and in summary:
(a)to formalise arrangements including with respect to the administrative fund; and
(b)to create certainty for the parties and to minimise any further disputes and litigation as there is a real and substantial disharmony on the part of Mr Zhao and Ms Fan which has persisted since about July 2020 when they stopped paying contributions (strata levies) to the strata company.

Orders

The Tribunal orders:
1.Pursuant to s 199(3) of the Strata Titles Act 1985 (WA) the Tribunal declares:
(a)the strata manager, Strata Administration Services, was validly appointed under the strata management contract entered into between the respondent and Strata Administration Services in or about 2020 and again in or about 2022;
(b)the respondent is authorised to perform the designated function of operating an administration fund pursuant to pursuant to s 100(1) and 140(3) of the Strata Titles Act 1985 (WA); and
(c)GV Lawyers, was validly appointed under the costs agreement in or about 2023.

2.Pursuant to s 200(2) of the Strata Titles Act 1985 (WA) the Tribunal orders:
(a)the strata manager, Strata Administration Services, was validly appointed under the strata management contracts entered into between the respondent and Strata Administration Services firstly in or about 2020, and secondly in or about 2022;
(b)the respondent is authorised to perform the designated function of operating an administration fund pursuant to pursuant to s 100(1) and s 140(3) of the Strata Titles Act 1985 (WA); and
(c)GV Lawyers was validly appointed under the costs agreement in or about 2023.

3.Pursuant to s 200(4) of the Strata Titles Act 1985 (WA) the Tribunal orders:
(a)order 2(a) above is to be taken to have come into effect on the date the respondent entered into each of the strata management contracts in or about 2020 and in or about 2022;
(b)order 2(b) above is to be taken to have come into effect on the date the respondent created the administration fund; and
(c)order 2(c) above is to be taken to have come into effect on the date the respondent entered into the cost agreement in or about 2023.

4.The application is otherwise dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS R PETRUCCI, MEMBER
26 AUGUST 2025