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[2008] WADC 112
General information, not legal advice.
District Court of WA
2008-08-06
Original judgment source is linked above.
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
CITATION : BENDALL-HARRIS -v- AITKEN [2008] WADC 112
HEARD : 22 APRIL 2008, 22 MAY 2008, 19 JUNE 2008 & 6 AUGUST 2008
Strata Titles Act 1985 - Section 51A - Resolution for conversion to a survey - Strata scheme - Application for declaration that resolution unanimously passed
1 The plaintiff, by an originating summons, dated 15 January 2008 sought the following orders:
3. The defendant do pay the plaintiff's costs of these proceedings.
2 This matter was heard in chambers on 22 April 2008, 22 May 2008, 19 June 2008 and 6 August 2008. An on-site inspection of the location occurred in the presence of the parties on the afternoon of 22 April 2008.
3 The following affidavits have been considered by me.
4 In addition four exhibits were tendered by the plaintiff and three by the defendant. I also received written submissions from the plaintiff (undated April 2008) and written submissions from the defendant filed on 18 April 2008.
A brief overview of the difficulties that have arisen
5 The plaintiff and defendant are both Lot proprietors in strata plan 7071 which is a two-lot single storey strata scheme, the Scheme having first been registered in 1979. The plaintiff is and has been the proprietor of Lot 2 for approximately 21 years; the defendant is and has been the proprietor of Lot 1 for approximately 11 years. They are both owner/occupiers living next door to each other.
6 Full height fences are in place around each of the strata lot buildings providing each lot proprietor with a private enclosed area of part of the common property. It appears that each party is content with this arrangement, indeed the plaintiff deposes to the fact that this has been the situation even before she purchased Lot 2 in 1987. As a result of this arrangement each party has in effect treated those enclosed as their own exclusive property.
7 The carport and driveway remain unfenced and it is difficulties arising from the parking in the driveway which is primarily, but not solely, the major issue confronting the parties.
8 As the affidavits of Collette Aitken, Nemarca Aitken and Elizabeth Anne Bendall-Harris establish there have been ongoing disputes between the parties which have resulted in an application for a violence restraining order against the plaintiff's husband and applications to the State Administrative Tribunal.
9 The ongoing disputes relate to the use of common property including difficulties over car and trailer parking, the storage of items and erection of posts thereon, the blocking of access to, the removal of trees, plants and other items from and allegations by each against the other that they do not understand the principals of common property.
10 The strata plan was originally registered in 1979 under the Strata Titles Act 1966. It is a two lot single tier strata scheme. Pursuant to that Act, strata lot boundaries could only be created within a building and there were no provision for the inclusion of land outside a building into a strata lot or for the creation of survey-strata schemes. The land outside a building became common property.
11 Subsequent amendments, in 1985, to the 1966 Act enabled a strata lot to be converted to a survey-strata scheme. The effect of such conversion was that a Survey-strata scheme allowed lots to be created including land both outside and inside buildings thus allowing for the abolition of common property. The Act provides in Div 3 a scheme for the conversion of strata schemes to survey-strata schemes. This only applies to single tier strata schemes registered before 1 January 1998. A single tier strata scheme is defined in the Act as a strata scheme in which no Lot or part of a Lot is above or below another Lot. The mechanism by which a single tier strata scheme can be converted to a survey-strata scheme is provided by s 31C of the Act.
"A strata company for a strata scheme may by unanimous resolution in the prescribed form resolve that the scheme be converted to a survey-strata scheme."
13 If a unanimous resolution in respect of a two Lot scheme is not obtained a proprietor may apply to the District Court for an order declaring that a resolution specified in the order is deemed to have been duly passed by the strata company as a unanimous resolution (51A(1a)(b),(2)) and on such application the District Court may make an order if it is satisfied that a proprietor has acted unreasonably in refusing to agree to the resolution or that it is in the best interests of the proprietors that the order be made (51A(3)).
14 Clearly the court's jurisdiction is confined to a consideration of the resolution which failed to obtain unanimous agreement, it is that resolution which was considered by the extraordinary general meeting, it is a failure to obtain a unanimous vote on that resolution which enlivens the courts jurisdiction and is that resolution that the court may deem duly passed.
15 The plaintiff called an extraordinary general meeting to consider a proposal to convert the single tier strata scheme to a survey-strata scheme. The meeting was held on 8 January 2008 and the motion considered was:
"That the owners of strata plan 7071 by unanimous resolution agree to the conversion of strata plan 7071 into a survey strata scheme in accordance with the attached sketch plan of the proposed survey-strata plan pursuant to s 31C of the Strata Titles Act and agree to take all steps reasonably necessary and to sign all further documents necessary to facilitate the conversion of strata plan 7071 into a survey strata scheme in accordance with the attached sketch plan of the proposed survey-strata plan" (Annexure EBH15 to the plaintiff's affidavit sworn 15 January 2008 (p 56)("The resolution of 8 Jan 2008")."
16 At the meeting the plaintiff voted for and the defendant against the resolution, subsequently the plaintiff brought this application.
"A strata company for a strata scheme may by unanimous resolution in the prescribed form resolve that the scheme be converted to a survey-strata scheme."
18 The prescribed form for the resolution is found in The Strata Title General Regulations 1996 Pt 2C under the heading "Conversion to a survey-strata scheme" which provides:
"REGULATION 14N
(1) The prescribed form of a resolution for the purposes of s 31C (1) is:
(a) That the unit entitlement for a survey-strata scheme is determined on site value, and
(b) That they are aware that this is different from the capital value, which is the basis on which the unit entitlement is determined for a strata scheme.
That it consents to the schedule of unit entitlement for the scheme as set out in the schedule tabled for the purposes of this resolution.
19 The defendant, who on three occasions appeared unrepresented obtained legal advice for the third appearance, and raised at that appearance the issue that there had been non-compliance with s 31C(1) of the Act in that the resolution considered was not in the form prescribed by reg 14N and in particular it did not include an acknowledgement by the owners that:
(a) The unit entitlement for a survey-strata scheme was determined on site value; and
(b) They are aware that this is different from the capital value which is the basis on which the unit entitlement is determined for a strata scheme; and
(c) They consented to the schedule of unit entitlement for the scheme as set out in the scheduled table for the purposes of this resolution.
20 The resolution of the 8 January 2008 is annexed to the affidavit of the plaintiff sworn 15 January 2008 (EBH 15 p 56) and clearly does not comply with any of those three requirements.
21 In my opinion these are matters of real substance. A resolution must be in the form prescribed by the Act. There is clearly a difference in the manner in which unit entitlements are determined under a survey-strata scheme, (on-site value) and a strata scheme (capital value) and the owners are required to acknowledge this and acknowledge their awareness of their unit entitlement set out in the accompanying schedule.
22 There has been a failure to comply with s 31C(1) and reg 14N. The resolution considered was not in the terms prescribed by the Act. I would therefore have dismissed the plaintiff's originating summons on this ground alone.
23 The plaintiff originally attempted to rectify this defect, as disclosed in her affidavit sworn 2 July 2008, by sending to the defendant's solicitor a copy of the certificate of unit entitlement certified by a licensed valuer on 27 June 2008, some six months after the resolution was considered and after proceedings have commenced. This does not remedy the defect. This defect would have been sufficient to dismiss the plaintiff's application. Further the unamended original summons requested relief that the Court could not grant.
The plaintiff's originating summons and amended originating summons
24 The orders sought by the originating summons was that the "strata plan 7071" be converted to a survey-strata scheme pursuant to s 31C of the Act substantially in accordance with the sketch plan of the proposed survey-strata plan annexed to the originating summons and marked "A".
25 The court's jurisdiction is to grant, or not grant, an order declaring that the resolution considered at the extraordinary general meeting of 8 January 2008 is deemed to have been duly passed by the strata title company as a unanimous resolution. This was not the order that was originally sought by the plaintiff. Without an amendment to the original summons the court would have lacked jurisdiction to make the order sought by the plaintiff.
26 This was not the end of the matter because on 4 July 2008 the plaintiff had given notice to the defendant's then lawyers of an extraordinary general meeting to be held on 23 July 2008. At that extraordinary general meeting a resolution which did conform to the requirements of s 31(C)(1) of the Act and reg 14N of the Act was considered. In short the plaintiff had remedied the defect with their original resolution so that the resolution considered at the meeting of 23 July 2008 now complied with Act and regulations. At the meeting the plaintiff voted in favour of the resolution. The defendant attended the meeting. She abstained from voting on the resolution.
27 When the matter come before the court on 6 August the plaintiff applied to amend the originating summons so that it read that "the resolution attached here to and marked 'A' be deemed to be duly passed by the Strata Company as a unanimous resolution". The resolution referred to is the resolution considered at the meeting of 23 July 2008. If I was to allow the amendment the relief sought is relief that is envisaged by s 51A of the Act.
28 The defendant objected to the amendment. In the circumstances I was prepared to allow the amendment to be made. It remedies, albeit at the last minute, the defect in the originating summons and when considered with the resolution considered at the meeting of 23 July 2008 would result in the court making a decision based on the real issue between the parties that is whether the strata plan should be converted to a survey-strata scheme in accordance with the survey-strata plan annexed to the amended originating summons and marked (A). The survey-strata plan considered by the meetings of 8 January 2008 and 23 July 2008 are, insofar as it relates to the proposed boundaries of the properties, identical.
29 I consider that it is in the best interest of both parties for the court to rule on this issue and notwithstanding the objection by the defendant I allowed the amendment.
30 I turn therefore to consider the amended originating summons.
31 The defendant alleges the sole cause of the problems is the plaintiff's breach of the rules contained in the Act. The plaintiff alleges the breaches are occasioned by the defendant. No doubt the plaintiff thinks the defendant is being unreasonable and the defendant thinks the plaintiff is being unreasonable. It is not necessary for me to decide the merits of each party's allegations. There have been mediation conferences held by the State Administrative Tribunal in an effort to resolve the issues however regrettably disharmony continues. I simply note that the matter does appear to be incapable of resolution without the intervention of an independent body.
32 The defendant is concerned that a conversion to a survey strata plan in the terms of the resolution would result in unbearable and unworkable difficulties for her in parking vehicles on her property. She points to the configuration of her property, particularly the northern side of the driveway which has at various points along it a brick wall, verge, letterbox and garden bed. Problems she says would occur if two cars were parked in her driveway and the foremost vehicle was required to be moved. She pointed out that the rear vehicle would need to be reversed onto busy Alexander Drive, where no street parking is permitted, driven around the corner, return and re-enter the driveway whilst the foremost vehicle exited the driveway. There is no verge upon which the car could be parked safely. She maintains that a conversion is not necessary and if the plaintiff complied with the various by-laws there would be no issues relating to parking.
33 The defendant continually stressed that the problems relating to the parking are primarily caused by the plaintiff and if she obeyed the rules and by-laws contained in the Act, there would be no problems.
34 It is important to understand the plaintiff's ability to bring this application is not dependant on the existence of difficulties between the parties over parking or any other issue. An application can be made irrespective of the state of the parties' relationship provided the terms of the act are complied with.
35 The plaintiff, on the other hand, claims that it is the defendant who has breached the by-laws on many occasions. This included placing screens on and removing plants from common property, blocking access to gas metres and that the defendant's customers frequenting her home in connection with her tutoring business often caused parking problems.
36 The plaintiff points out that the garden bed referred to by the defendant as "hers" is common property and that if a conversion was approved the defendant would have ample room for parking even though this may necessitate a choice being made as to whether she wishes to retain or remove the garden bed partially or wholly to provide easy access for her parking requirements.
37 The Act only allows me to make an order under this section if I am satisfied that a proprietor has acted unreasonably in refusing to agree to the resolution or that it is in the best interests of the proprietors that the order be made. I turn now to considering those issues.
38 Neither the plaintiff nor defendant bears any burden of proof. It is for the court to determine, after considering all the evidence, whether it is satisfied on the balance of probabilities that either of the two matters referred to in s 51A(3) are established. I turn now to consider those issues.
Has Ms Aitken acted unreasonably in refusing to agree to the resolution?
39 The proposal contained in the resolution is that the southern carport becomes part of the property of the plaintiff and the northern carport the property of the defendant, dividing the driveway in the manner shown on the sketch. There seems to be really no issue between the parties over the division of the carport. The issue in contention is the division of the driveway.
40 According to the defendant there is a street frontage of 8.04 metres which runs parallel with Alexander Drive before the wall surrounding her property commences (defendant's Exhibit I).
41 The plaintiff's proposal as contained in the resolution is that the area of land, commencing from the southern boundary of the Lot and continuing in a direction parallel with Alexander Drive for a length of 4.66 metres at an approximate right angle to the mid-way point between the two arches of the carport become the property of the plaintiff. This resulted in the remaining 2.98 metres of street frontage becoming the property of the defendant (Colam affidavit par 12). The plaintiff says this provides the defendant with an area for parking in excess of the acceptable minimum driveway width provided by the residential design code. Mr Colam's affidavit states that the width of the common property driveway is approximately 7.4 metres from the southern boundary at its widest section. The plaintiff's proposal incorporates a driveway width of 4.66 metres for the plaintiff and 2.98 metres for the defendant. The proposed 2.98 metre width driveway for the defendant accommodates the residential design codes which state that the minimum acceptable driveway width is 2.4 metres plus 0.3 metres for any side of the driveway confined by a wall. Mr Colam also points out that the Planning Commission policy is that the minimum driveway width for a rear lot is 4 metres and the width of the proposed driveway space to be allocated to the plaintiff's is 4.66 metres from the southern boundary (Mr Colam affidavit par 11-15).
42 The defendant points out that when one considers that she has an existing garden bed occupying 2.47 metres of street frontage, this means there is only 5.57 metres of street frontage available for distribution. The plaintiff's proposal of retaining for herself 4.66 metres is grossly unfair because it divides the driveway in a manner which is less than equitable and impacts on her ability to utilise her property because of the parking difficulties that would ensure.
43 The defendant says if this conversion proceeded it would affect her ability and that of her guests to park three abreast on what was formerly common property. The defendant said the conversation results in approximately only 42 per cent of the street frontage becoming her property whereas the plaintiff obtains around about 57 per cent of the street frontage.
44 The garden bed area which the defendant refers to as hers is in fact on common property. There is no doubt the defendant enjoys the vista provided by the garden bed and there is no doubt that the existence of the grass, shrubbery and garden area creates a pleasant environment for all, not just the defendant to enjoy.
45 If a conversion is approved it will be the defendant's decision as to whether she retains the garden bed or removes it partially or in whole thus providing easier access for parking/manoeuvrability of vehicles. There is no doubt that the defendant finds this proposition unacceptable, and it is always preferable from a community point of view that, as far as is reasonably practical garden beds and shrubbery be preserved in preference to bituminised driveways, however this is the choice that may confront her.
46 Although this state does not have a specialized land and environment court the wider community interest in the preservation of greenery is a matter that is relevant in a general way in considering the question of the defendant's reasonableness in voting against the resolution and whether the proposed conversion is in the best interest of the proprietors. As I have dismissed the plaintiff's application on other grounds it is not necessary for me to determine the vexed question of precisely what effect this issue would have on the overall determination of this application.
47 There is no evidence before the court as to whether the by-laws referred to in Sch 1 and 2 of the Act have been amended, repealed or added to by the Strata Company. It is clear from a consideration of those rules/by-laws and in particular by-law 1, 2(a), (b), (c) of Sch 1 and by-law 1 of Sch 2 that in the absence of any written approval from the Strata Company neither proprietor shall park or stand any vehicle upon common property (and the driveway is common property) and each party has the right and obligation to use the common property (driveway) in such a manner so as not to unreasonably interfere with its use and enjoyment by the other proprietor. Each party must take all reasonable steps to ensure that visitors do not behave in a manner which is likely to interfere with the peaceful enjoyment of other proprietors.
48 In a case like this where there are unresolved issues between the parties there is the need for intervention by an independent body such as State Administrative Tribunal or the courts so that harmonious relationships between the occupiers/proprietors may be restored and a degree of certainty over matters such as parking thereby established.
49 In my opinion there are aspects where it can be said that the defendant is being unreasonable, in particular in referring to the garden as her garden when it is common property, in her refusal to consider that she may have to reduce the area of the garden bed to increase ease of access for parking, in contending that the plaintiff can park her vehicle partly on the adjoining neighbours property and in believing that the dispute between the parties can be resolved other than by a ruling from an independent body which results in the abolition of common property and the resulting clear delineation of the driveway into areas of exclusive use for the respective parties.
50 The question however is not the reasonableness of the defendant's conduct generally rather whether or not the plaintiff has acted unreasonably in refusing to agree to the resolution.
51 The plaintiff in her affidavit of 2 July 2008 draws attention to proceedings in the State Administrative Tribunal where the defendant states on a number of occasions that she supports a conversion to a survey strata scheme saying at p 11 of the transcript dated 24 May 2008:
"I think this should have been done a long time ago ... It should have been done when I first moved in about 7 years ago.... I do think that we should do it, we absolutely should ... It should have been done a long time ago."
52 Then at p 3 of the transcript of 28 June 2007 she stated:
53 Indeed in the defendant's written submissions dated 18 April 2008 she states that she does not oppose an order being made that strata plan 7071 be converted to a survey-strata scheme pursuant to s 31C of the Act but she does oppose it being converted in the manner suggested by the plaintiff.
54 I do not think that it can be said she has acted unreasonably in refusing to agree to the resolution, particularly when, for example, she has not been advised precisely or by way of an estimate of the costs that she would incur in agreeing to the resolution. The surveyor, Mr Colam stating simply that "owners will need to undertake some remedial works to there driveway ... to move some kerbing and other minor works ... these works are minor ... and do not represent a significant cost" (Mr Colam's affidavit par 16).
55 I do think that it is incumbent upon the applicant to provide details as to the approximate costs that would be incurred by the defendant in the event of an order for conversion being made. Such costs are clearly to be taken into account by the Court in considering the reasonableness of the approach taken by a party in considering the resolution for conversion. Further, one must also consider that of the 8.05 metres (approximately) of street frontage the defendant is only to receive 3.39 metres including the garden bed (42 per cent versus 57 per cent) on her calculation or 2.98 metres out of 7.4 metres of maximum driveway width (40 per cent versus 60 per cent) using the figures referred to in Mr Colam's affidavit (par 13 of S Colam's affidavit).
56 In those circumstances, although there are aspects of unreasonable behaviour by the defendant in regard to other matters, it cannot be said that her failure to agree to the unanimous resolution is unreasonable.
57 When the defendant purchased her property she purchased proprietary rights. She received one vote out of two available to be exercised at meetings including extraordinary general meeting. I do not think it can be said that she is acting unreasonably when she refuses to agree to a proposal that results in the plaintiff receiving a greater share of that portion of street frontage that is not confined by a wall. This does seem to me to derogate from her proprietary interests. This was one of four factors referred to by his Honour Judge Wisbey in McHattie v Tuscan Investments Pty Ltd (1997) 18 SR (WA) 231. His Honour was considering a different provision in the Act however it seems to me that some of the general principles expressed therein apply. In particular it would seem to me that the court must consider whether deeming the resolution unanimously passed would result in:
(i) Any detriment flowing to any proprietor, and whether it would impinge upon the proprietor rights to the extent that it could be said to derogate from those proprietary rights;
(ii) Costs to a proprietor being incurred and the extent of those costs;
(iii) The formalisation of any longstanding informal arrangements; and
(iv) Certainty in the relationship between the proprietors being created and thereby reducing disputes and contributing to harmonious relationship between the parties.
58 Each case must be dealt with on its own facts, however, these principals are relevant both to the question of whether a proprietor has acted unreasonably in refusing to agree to the resolution and whether it is in the best interest of the proprietors that the order be made.
59 There are enormous benefits to both proprietors in a conversion to a survey strata scheme. It results in the informal arrangement whereby that part of the common property which is currently fenced off and treated as the exclusive property of the respective proprietor, being formalised. A further advantage of conversion is the creation of certainty in that the abolition of common property results in each proprietor knowing precisely what is their property thereby reducing disputes relating to parking, and storage of items on common property and blocking off proprietors' access to common property.
60 There is clearly a benefit to both parties in the creation of a degree of certainty, particularly where the parties live next door to each other. However the question of whether or not the defendant's opposition to a conversion to a survey-strata scheme is unreasonable is not necessary for me to decide. If I was required to so decide on the evidence before me I would say that her opposition to such conversion is unreasonable.
61 The question is whether her opposition to the particular resolution put to the extraordinary general meeting on 23 July 2008 involving the conversion to a survey-strata scheme in a particular manner is unreasonable. I am not of the opinion that the defendant is being unreasonable in opposing the conversion considering the inequitable distribution of available street frontage that she will suffer and the failure of the plaintiff to provide to her an approximate estimate of costs that would be incurred by her.
Is the unanimous resolution in the best interests of the proprietors?
62 In determining whether the unanimous resolution is in the best interests of the proprietors, the Court is involved in a balancing discretion and must consider the interests of both proprietors.
63 For the reasons stated at [59] a conversion to a survey-strata scheme is in the best interests of the proprietors. However the conversion on the terms contained in the resolution under consideration is not in the best interests of the proprietors. I do not think it can be said that even taking into account the many advantages of conversion in creating certainty, the formalisation of existing arrangements, the encouragement of peaceful and harmonious relationships between the parties, that conversion in accordance with this resolution with its resulting inequitable distribution of street frontage is in the best interest of the proprietors. I accept that it is a question of degree and I recognise that for a conversion to be in the best interest of proprietors it does not necessarily mean that there must be a 50/50 division of the property being converted however it does seem to me that this proposal is inequitable and it cannot be said to be in the best interest of the proprietors. As I have previously remarked the width of the proposed driveway space to be allocated to the plaintiff is 4.66 metres from the southern boundary. Under the Planning Commission policy the minimum driveway required by the plaintiff is 4 metres. Bearing in mind the importance to both parties of maximising their driveway width, although the resolution would clearly be in the best interests of the plaintiff, I am not satisfied that this resolution is in the best interests of both proprietors. The plaintiff's proposal leaves the defendant with a driveway 0.28 metres wider than the requirements of the residential design codes and leaves the plaintiff with a driveway of 0.66 metres wider than the requirements of the residential design codes. As I have said, bearing in mind the critical nature of each party maximising the width of their driveway I do not think it could be said to be in the best interests of both proprietors to approve this resolution.
64 It is not for the court to consider the counterproposals referred to by the parties. The court is not to play the part of a licensed surveyor/town planner. The court is only to consider the resolutions which have been considered by the extraordinary general meeting. The proper procedure is that if either party wish other proposals to be considered they should submitted such resolutions to an extraordinary general meeting, if a unanimous resolution is not obtained a further application can be made to the court.
65 I do not think it can be said that the defendant has acted unreasonably in refusing to agree to the resolution or that it is in the best interests of the proprietors that the order approving the resolution be made and would therefore have dismissed the plaintiff's application on this basis as well.
66 Although I have dismissed the plaintiff's application, I do make these additional comments not as a criticism of the manner in which either party presented their case, rather in light of the absence of any reported decisions on this area of the law and therefore the inability of the parties to have ready recourse to past authority.
67 I do think that it is incumbent upon the party who makes an application such as this to provide the court with a more detailed plan than that provided. For example, in this particular case it is clear that the area primarily in contention is the area from the carport to the driveway. A detailed plan of measurements of the surrounding area including details showing the existence of the left-hand turning lane on Alexander Heights, the location of power poles, letterboxes, meter boxes, existing garden beds and the like would have assisted. It was only when at the invitation of the parties I attended the site for a "view" and was shown the letterbox, power pole, survey corner post on the eastern boundary, driveways, carport, entries to both units, survey pegs on the southern boundary, layout of the road that I was able to get a proper feel for the location.
68 Although I accept that the plaintiff provided a plan and indeed it is annexed to the originating summons, it does not provide sufficient details. Similar comments apply to the sketch plan provided by the defendant. In my opinion a more detailed plan would have been appropriate in the circumstances.